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March 05, 2010
Vegas hit with two competing tax-subsidized arena plans
I'm being interviewed by Las Vegas radio on Monday morning (tune in here at 6:50 am Mountain time), and now I think I know why: Two would-be developers have proposed building a sports arena near the Strip, and will be presenting plans to county commissioners in the next couple of weeks.
Both plans involve major public subsidies. One plan, pushed by the nonprofit Las Vegas Arena Foundation and Harrah's casino, would raise sales taxes by 0.7% in an "entertainment corridor" near the Strip, to help fund a $488 million arena. (No breakdown on how much money would come from the tax hike.) The other, from International Development Management, would reestablish a redevelopment agency to kick back property taxes to the developers — that's right, yet another TIF. The IDM arena would cost $751.7 million ($404 million for construction, $347 million for land).
As for who would play there, an IDM spokesperson said that the city "needs the arena to host bigger and better events." (Because, you know, there's nothing much to do in Vegas now.) This will no doubt fuel renewed speculation about an NBA franchise moving to Vegas, though the league hasn't been thrilled with the idea so long as betting on basketball is allowed there.
County commissioners, meanwhile, are both intrigued and wary of committing public funds — though not necessarily clear on how modern arena finances work. Commissioner Tom Collins — who, may I just say, has the best Vegas elected official name ever — told the Las Vegas Sun, "If it involves any public funding, then I think the county should own it." Noooooooooooooo!
"...though the league hasn't been thrilled with the idea so long as betting on basketball is allowed there."
Well, the NBA looks to be changing its attitude towards gambling. Ontario (as well as B.C. at the time with the Grizzlies) had to remove NBA games from its provincial sports lottery in order for Toronto to get the Raptors (as a compromise, the Raptors annually pay into a charitable foundation to off-set the loss of gambling revenue). However, just recently, the Raptors announced that the deal is off and the Province can once again add NBA games to its Sports Picks. Personally, I read this as a part of a pre-amble of the NBA entering Vegas.
The NHL is a likelier target, as they have been active in the city, with preseason games and the NHL Awards taking place there.
But with no shortage of financially struggling teams, both the NBA and NHL could be tripping all over themselves trying to install a team in Vegas.
VEGAS BABY! VEGAS!!!
Las Vegas has to be the dumbest expansion target ever. The economy is suffering a depression with no signs of recovering.
Roughly one third of employed adults work non-traditional shifts. Before you have thrown out a pitch, tipped off, or faced off, you have lost a third of the market because those people are at work.
Does anyone really think tourists are going to watch to a baseball, basketball, and/or hockey game while in Vegas?
It is Tuesday night in late January. The 14-42 Las Vegas Stuffers are taking on the 12-44 LA Clippers. Can you feel the excitement?
What do you think the crowd size will be? 2,000? 3,000? How many of those people in attendance paid face value for the ticket? 10? 20?
NOoooooo. My closest long term friend lives in Vegas. She says the high schools have cut the kids back from 8 period days (32 classes total from 9th-12th grades) to 6 period days (24 classes total from 9th-12th) because of such severe budget cutbacks to the schools. Her kids attend a high school with 3500 kids, because there isn't money to build another school (high schools here are around 1500 kids). They just don't have the money for anything in Las Vegas. Our friends are a big sports family-but that means watching their own kids play sports.
It's bad enough I'm fighting the 49ers in Santa Clara, I've got sibs in Minneapolis, Milwaukee, and Cincinnati dealing with stadium money issues in those cities, I don't want to even hear about a stadium/arena in Vegas from my best friend too.
I'm not sold that the betting angle is the only thing holding ML sports back from a Vegas expansion move.
First, no-one should forget the NBA all star game there a few years ago. Frankly, it was a disaster. With all the thuggery going on (yes, Pacman Jones showed up, as I recall), gambling revenues - the city's primary cash cow - actually dropped significantly. You know the old story about crime in Vegas, right? There isn't much on the strip - It's bad for business. If the Iowa corngrowers are too frightened to hold their convention, well, that's a failure.
Secondly, while there is a lot of money in LV, the average working person doesn't see much of it. Wages are fairly low, and the tourists who do spend money mostly do so in the Casinos and theatres (which are, increasingly, intermingled). Any other attraction on the strip will potentially draw interest (and $$$) away from the core economic engines of the city. Also bad for business.
Anyone know where the corporate support will come from? Me either. And that's half the battle for a modern NBA/NHL club.
Lastly, I agree w Bevo. The work schedules (and incomes) of the residents make them unlikely targets for season tickets, and rarely likely to attend on a walk up basis.
Sports leagues have put clubs in less suitable places before (think NHL in Phx, Atl or Nashville; NBA in Memphis/Vancouver, Charlotte or NO; NFL in Jacksonville), but it would be a disaster for either the NBA or NHL to go to Vegas - no matter how much they want to rub shoulders with Bruckheimer, call him "partner", and enjoy some cross promotion TV time...
@ Santa Clara Taxpayer
If the Las Vegas schools do not teach their kids math (or probability), well . . . let's just say it is good for business!
Personally this is just a sign of things to come. I know that AEG also had a Las Vegas arena planned by the strip as well. The Maloofs will probably relocate to Las Vegas and the NBA will allow it since they have close business ties to the city. They already have Summer League there and the corporate support will be there as well with casinos being able to give tickets to hotel guests as complements. Nets are going to Brooklyn, the Kings are about to relocate and soon, the Milwaukee Bucks & Minnesota Timberwolves will be next.
This was in my inbox this morning from my friend in Las Vegas. 'Creative financing' my Vegas friend says:
From what I've been reading, the Maloofs probably won't be in charge of the Kings (or The Palms) that much longer anyway. "Covenant Breach" is such an ominous-sounding thing. They are so deep under water on the Palms that they had to sell their beer distributorship to make a payment on their $380M revolver they have on the Palms. That's hideous.
That's why Harrah's is buying up Maloof debt; they're trying to corner the Maloofs. So, let's see, where is Harrah's HQ, and where are they trying to build a new arena?
One more log on the fire: Michael Jordan just paid $200M for the Hornets. That's the value of NBA franchises these days, which means the Maloofs are in even deeper debt than we thought (they owe Sacramento $69M, and they borrowed to buy the Kings).
If the Kings go to Vegas, it'll be with new owners. I'm pretty well convinced.
Big announcement tomorrow regarding Sacramento's arena committee. It'll be the one with far too many moving-parts to succeed. Translation: See ya, Sacramento Kings. Oh, it'll take a year to implode, but implode it will.
Surprise, surprise, the deal that KJ wanted was, somehow, the "winner!". Who in the World saw THIS one coming??