Don’t look now, but there’s a new Las Vegas arena deal in the works! No, not the MGM/AEG one that we talked about last week. And not the $1.3 billion one with the retractable roof proposed two weeks before that by a former NBA benchwarmer. Didn’t you hear me say “new”? And by “new” I mean “more than four years old, but unexpectedly raised from the dead“:
The city of Las Vegas plans to continue working with Cordish Companies to develop a $390 million downtown sports arena, with the city paying $239 million raised in part by a special tax on downtown businesses….
According to the proposed terms, the city would fulfill its end using $187 million from bonds backed by arena revenue, nearly $52 million from a special improvement district that would assess casinos along Fremont Street and other downtown businesses based on proximity to the project and $3 million from a tourism improvement district funded through sales tax.
The good part of this deal, according to Vegas city manager Betsy Fretwell (wasn’t she in the Mayor Blank administration?), is that the city would get repaid its $187 million in bonds out of arena operating revenues before Cordish got repaid its $151 million investment. (The city would also own the arena, but as we’ve covered here before, that would mostly just serve to ensure that Cordish wouldn’t have to pay property tax.) The problem is that the money would be repaid out of operating profits, and as one stadium expert — okay, me — pointed out to the Las Vegas Review-Journal, most arenas don’t turn much of an operating profit. Which is especially going to be a concern when any new Cordish arena would have to compete for events with the new MGM arena, and all the other existing Vegas arenas, and probably offer discounts to acts in order to do so. (We’re not even getting into the notion of it hosting a major pro sports team, of which Vegas currently has none and isn’t likely to get any soon, certainly not if it wants them to — gasp— pay rent.)
Right now this doesn’t look like much of a plan: It’s being voted on by the council next week, but only in order to extend talks with Cordish another four months rather than have the negotiating window expire. If that’s approved, then everyone will reconvene on June 1 to figure out how to pay for all this, hopefully with actual revenue projections this time.