Whenever I see a headline or an article that mentions the word “arena,” my thoughts drift away and my eyes glaze over as if I’d been sampling ganja from one of our non-existent medical marijuana dispensaries. Who can keep up with all of the various competing arena plans and proposals?
But I saw a line in a newspaper story a few days ago that really grabbed my attention. The story in the Las Vegas Sun, written by my colleague Joe Schoenmann, began with the words “a downtown arena is a can’t-miss business opportunity.” The line was spouted by a consultant hired to study a proposed arena in the downtown area, so it needs to be taken with a great big shovel of salt. But it was particularly troubling because the consultant was talking about a proposed arena that would largely be built with a mixture of public and private financing, though we taxpayers would be footing the biggest chunk of the tab, in the neighborhood of $240 million of the $390 million cost.
For three years, the city of Las Vegas has been operating under an exclusive deal with the Cordish Group to study an arena downtown. Cordish hasn’t exactly done a lot to advance the plan during that time, which is why most of the local business community figured the proposal was essentially dead. But city leaders resurrected it by considering an extension of the exclusive negotiating period so that Cordish could finish the work and perhaps make a formal proposal. Included in the plans is the option of a hotel-casino adjacent to the arena, which would be a pretty sweet deal for any company to land. A brand new casino right next to a publicly financed arena in the heart of the downtown renaissance. Sign me up for a piece of that.
I don’t blame other downtown casino properties for being a bit miffed about the deal. Imagine having the tax dollars you pay on your business going into the pockets of a rival casino company so they can build a bigger and better competitive venue. Initially, the city planned to slap downtown businesses with a special tax to fill a $52 million hole in the financing of the arena plan. That provision has been removed, though it is clear the city will have to come up with the $50 million from somewhere, along with the $190 million to be raised by selling city-backed bonds.
Oh, but it’s a can’t miss proposal, the consultants swear. I am reminded of other can’t miss public-private partnerships and how they ended up. That lovely little train that couldn’t, otherwise known as the Las Vegas Monorail, comes immediately to mind. And does anyone remember the consultants’ lofty predictions about ticket sales at the $250 million Springs Preserve, and the hundreds of thousands of tourists who would visit the park every year?
The projections for the downtown arena are just a wee bit suspicious. The consultant’s report to the city projects the arena would host 139 events each year, and that’s without having a commitment from a professional sports franchise. Among the events it is counting on landing is the National Finals Rodeo, which seems like a stretch since the NFR’s flirtation with moving the event to another city. For a downtown arena to land 139 events, it would have to outbid the Thomas and Mack, plus the MGM’s two current arena venues, plus the Orleans and South Point facilities. The MGM properties hosted fewer than 70 events last year combined. Now they plan to build a third by 2016. If these projections need to be accurate for the project to make financial sense, then the arena is in big trouble even before one bit of dirt is broken.
From all indications, the Cordish Group is a fine company as one of the leading developers in the country. Cordish is doing so well, in fact, that its casino in Maryland has been raking in more than $50 million per month. That is some serious dough. One might ask, why doesn’t the cash-rich Cordish outfit fund its own arena in the downtown area, instead of relying on city taxpayers to come up with the money? And what, exactly, has Cordish been doing for the past three years anyway? The dithering about a possible arena has meant that nothing else could be done with the land, and the city already has $100 million in public funds tied up in the Symphony Park land. Until Cordish either fishes or cuts bait, the city’s hands are somewhat tied when it comes to other development at the site.
Cordish has created some excellent projects, no doubt, but not all of their public-private partnerships have been seamless. Promises that were made to develop parcels in downtown Kansas City proved hard to keep, and by some predictions, the public there will never get its money back. The worst part of this unexpected push to extend the negotiating period is that it was kept so quiet. City leaders did a real crummy job of letting other downtown businesses know what was going on, and there appears to have been no effort to lobby for support. It is no wonder the other business folks, many of whom have been plowing piles of their own money into reinvigorating downtown, are less than enthusiastic about handing over their own dollars to create new competition in their own backyard.
One note of disclosure, I have been a downtown property owner since 1991 so I do have a personal interest in any special tax levies that might be okayed by the city, but that isn’t why I am writing this column.
Other stuff: Congratulations to Las Vegas attorney Robert Eglet for being named the Trial Lawyer of the Year by the national Trial Lawyers Association. Tough to argue with his selection. Eglet won the largest personal injury verdicts in America in both 2010 ($505 million) and 2013 ($524 million), the only lawyer anywhere to do it twice. If you have been anywhere near 7th Street downtown, you may have seen the new $18 million building that now houses Eglet’s law firm. From the outside, it looks like one of those stately courthouses you might find in Austin or Eureka or one of Nevada’s historic towns… Condolences to the family of former Metro Intelligence chief Kent Clifford who died this week. I’m sure someone will write about the time Clifford flew to Chicago and banged on the door of a top Mafia kingpin to warn the mob kingpin to remove a hit that had reportedly been ordered on two Metro officers. Clifford flat out told the boss that nothing bad had better befall any Metro officers or else it would be war. Some folks poked fun at Clifford for his bravado, but his fellow cops loved him for it.
GEORGE KNAPP is a Peabody Award-winning investigative reporter for KLAS Channel 8.