Wise to go slow on Las Vegas arena plan

Last week, the federal Bureau of Land Management delayed by 40 days, till Feb. 6, closing the sale of 480 acres of federal land in the city of Henderson to developer Chris Milam.

The move comes after the city attorney wrote in a Nov. 29 letter to the federal agency that Mr. Milam initially proposed a sports arena project for the site, but has since switched gears and begun promoting the land for residential development.

The delay was agreed to by all parties, according to Kirsten Cannon, a BLM spokeswoman.

In his letter to the BLM, Henderson City Attorney Josh Reid asked the agency to refrain from issuing a land patent that would give control of the site to Milam’s Silver State LLC. Reid argued in his letter that the deal “appears to be tainted by fraudulent representations by Christopher Milam.”

Mr. Milam and a representative could not be reach for comment last Thursday. But in a Nov. 30 letter to the mayor, Milam denied the claim that there was a fraudulent representation.

Mr. Milam initially targeted the BLM land near the M Resort – which the BLM figures is worth at least $10.6 million – for a $650 million sports arena project, and successfully persuaded city officials to nominate the land for sale by the BLM.

In his Nov. 29 letter to BLM, attorney Reid said the city had recommended Mr. Milam’s Silver State LLC as the land purchase bidder based on “representations and assurances” that Mr. Milam would develop the site for a sports arena and that the project was “economically viable.”

Mr. Milam had dubbed his sports project the Las Vegas National Sports Center.

The city is wise to be cautious.

More federally controlled land in the valley should be released for private development, at which point anyone who can buy at a market price is welcome to invest their own funds in developing anything that fits with general land-use regulations. Private investors can take the risks, and hopefully reap the rewards.

But Mr. Milam wants public financing. He’s counting on the creation of a taxing district, comprising the entire site, which would allow him to repay debt with revenues generated there. He also wants the city to sell revenue bonds.

Under those circumstances, Henderson officials have been appropriately guarded in dealing with this proposal. Mayor Andy Hafen has made it clear he won’t support increasing taxes to fund Mr. Milam’s project, and that Henderson taxpayers will not be on the hook for any bills if the deal collapses. Thank goodness.

Mr. Milam’s previous attempts to build a state-of-the-art sports complex in Southern Nevada got headlines and hearings, but no more. The Clark County Commission rejected his idea for a mostly tax-funded north Strip arena, and the Legislature passed on his plan for a tax-supported south Strip megaplex with an arena and baseball and soccer stadiums.

Henderson officials should apply additional scrutiny to a deal with major short-term borrowing costs. (According to a memorandum of understanding filed with the city, Mr. Milam had planned to borrow $650 million from a Chinese firm at a 20 percent interest rate, incurring an obligation to secure long-term refinancing within 3 1/2 years.)

Even if taxpayers are protected from liability, it would be a blow to have such a massive construction project halted, leaving another steel skeleton in view of Interstate 15.

By all means, private investors are welcome to take risks to grow the economy.

But tax dollars are limited, and needed elsewhere.

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