Las Vegas sports arenas, both current and planned, are in the news as three new arena proposals surface, and Jerry Jones may want the National Finals Rodeo as he gets aggressive in booking boxing and other events in the new Cowboys Stadium See links to Stories, Update, and Video from NBC DFW, below.
Update – Monday April 5, 2006 - Las Vegas Arena Proposals to be Reviewed by Clark County Commissioners
The last year of the NFR’s contract is 2014. Will the threat of losing the NFR, and its great economic impact in December, create enough business and political momentum for a new arena to be built? Any use of taxpayer funds will certainly be an issue. Clark County Commissioner Tom Collins; “If it involves any public funding, then I think the county should own it”. Public ownership of a stadium/arena facility can create a sweetheart deal for the operator, they don’t have to pay property taxes and they keep the revenue from the operation.
In may cities stadium and arena development received public funds and property tax exemptions. As Field of Schemes reports: In Cleveland Stadium Tax Breaks Cost the City $18.6 Million A Year
Property tax exemptions represent a hidden public cost of sports stadium construction: About $8 million a year for the Browns, $3.8 million a year for the Cavs, and $4.8 million a year for the Indians. All three teams received new homes mostly built with public funds — and made sure that the public would own the buildings as well (though not the profit-making revenue streams they generate), since that absolves them of owing property tax.
55% of property taxes in Cleveland go to the local school district, so that’s roughly $9 million a year in education money that isn’t flowing in because of the tax abatement. Here’s the full breakdown on tax abatement in Cleveland.
Update – March 10, 2010 – A Chicago businessman, who proposed stadium development in 2004, returns with his proposal to fund a stadium without taxpayer money, by selling luxury box and seat rights at a level high enough to build a facility. The Las Vegas Sun: Financing Plan Would Exempt the Taxpayer
Lou Weisbach, CEO of Stadium Capital Financing Group, a subsidiary of Morgan Stanley, hasn’t given up on the town or his financing plan, which he says has since been implemented successfully elsewhere.
“I believe there’s a need for a new arena, a state-of-the-art arena which would draw the best concerts and best events” to Las Vegas, Weisbach said Tuesday. “Ultimately, it would lead to a professional sports team — Las Vegas would already have had a professional baseball team if it had a stadium.”
Weisbach’s financing plan works like this:
His company sells seating and luxury boxes in much the same way developers sell homes.
The buyers are able to finance their purchased seats over several decades, similar to a home mortgage. They, of course, retain the right to later sell their seats for a profit or transfer them to another owner.
“As the value of tickets goes up, that would create value in that seat,” Weisbach said.
Last year, the University of Kansas and University of California, Berkeley, used the “Equity Seat Right” system to pay for expansions and renovations of their football stadiums.
“It would be great to be able to help facilitate an arena in the place where this idea was born,” Weisbach said, referring to Las Vegas.
At Berkeley, 3,000 seats were put up for sale, with the most expensive going for $175,000 to $200,000, financed over 50 years. Other seats were sold for as little as $40,000 over a 40-year term. In September, Berkeley reported getting commitments from buyers for 2,000 seats.
Weisbach estimates an arena on the Strip would need to sell 1,000 seats, with the majority of the money coming from the sale of 150 or so luxury suites.
Commissioner Chris Giunchigliani expressed skepticism that an arena could truly be financed without public assistance, saying the “devil is in the details.”
Taxpayer assistance, she noted, isn’t always “a direct dollar” thing. Even if no upfront investment is required, taxpayers could end up paying for it on the back end through dwindling tax collections, tax exemptions or being on the hook for debt if the plan doesn’t work. (See the costs to taxpayers in Cleveland, above.)
The ongoing story in Las Vegas Sports Business has been the construction of a first-class arena in Las Vegas. Although Las Vegas should consider replacing Cashman Field, its outdated and comparatively old AAA baseball stadium, it is rarely mentioned. Las Vegas Mayor Goodman strongly believes an NBA or NHL franchise is more important to the city.
First, some history – In June 2007 The Las Vegas City Council approved plans for Pulse, a massive $9.5 billion mixed-used development on 85 acres at Charleston and Main, anchored by a 22,000-seat arena. The project (code named Pulse) was to be developed by REI, a Michigan-based real estate development firm.
In the Pulse of Las Vegas’s Crystal Ball the Monorail would go to Downtown, helping it’s visitor volume, and both locals and visitors could ride it to a beautiful multi-purpose arena/stadium, just like taking the train to a game at Petco Park, Yankee Stadium, Wrigley Field, and Oakland Alameda County Coliseum. But the REI Neon stadium project on 85 downtown acres isn’t going to happen (click for the update). Hopefully Mayor Goodman’s tour last summer of the new Reno Aces downtown baseball stadium helped. Losing the Dodgers AAA team affiliation was an embarrassment.
In August 2007 Harrah’s and AEG announced plans to build a $500 million, 20,000 seat, privately financed arena a block from the Las Vegas Strip. It was to be constructed on 10 acres of land located behind Harrah’s Paris and Bally’s resorts at East Flamingo and Koval. Ground has not been broken for this facility.
Planned for completion in September 2010, planned tenants/events include a National Hockey League or a National Basketball Association franchise and special events, concerts, boxing matches, exhibitions and tournaments. In a joint venture, AEG will develop, build and manage the arena.
AEG developed and operates the highly occupied Staples Center, Target Center, NOKIA Theater LA, NOKIA Theatre Times Square, The Home Depot Center and London’s O2 Arena. AEG LIVE, a subsidiary in Las Vegas, Nevada, manages programming for Caesars Palace Colosseum and several other indoor venues on the Strip.
In September 2008 the City of Las Vegas began talks with real estate development company the Cordish Co. about building a 20,000-seat sports arena on one of two sites: 17 acres adjacent to the Stratosphere Hotel-Casino (owned by Goldman Sachs), and 12 acres across the street from City Hall in downtown Las Vegas (owned by the city). This facility would be within the city limits, the domain of Mayor Goodman, as compared to the Harrah’s/AEG arena in the county.
REI’s options on the land for their development have run out. Cordish has been involved in several sports-related developments, including the Kansas City Power & Light District near Sprint Center and Ballpark Village across the street from Busch Stadium, which is still under development.
March 4, 2010 – Las Vegas Sun: New Arena Plans Promise Jobs But Seek Public Money
Competing proposals for a local arena large and modern enough to house a professional basketball or hockey team are making their way into the hands of Clark County commissioners.
Two contenders want to build 20,000- to 22,000-seat arenas on or near the Strip, and county commissioners could be debating the proposals in two weeks. Part of the pitch that commissioners — and union officials — like is that the project would create thousands of construction jobs over an 18-month period.
• One proposal would be for a 20,000-seat arena funded in part through a sales tax collected in a designated entertainment corridor near the Strip. Sisolak figures the tax would be about seven-tenths of a cent. Voters would first have to approve the levy in an advisory question on the ballot in November, he says.
Las Vegas Arena Foundation is the nonprofit group proposing this plan, with former County Commissioner Bruce Woodbury at its helm. Others on the board, which Woodbury says has not been completely filled, include Thom Reilly, a former county manager; Pat Shalmy, also a former county manager and retired president of NV Energy; and Danny Thompson, executive secretary-treasurer of the Nevada AFL-CIO.
Woodbury says his group is separate from Harrah’s, but the plan includes 10 acres behind the Imperial Palace that Harrah’s would donate. Total cost for the 674,570-square-foot arena would be about $488 million. The land donated by Harrah’s is worth and estimated $182 million.
• The other proposal comes from Texas-based International Development Management to build what documents call the Silver State Arena. Its seating would vary from 20,000 to 22,000 based on the event. The arena would be between the Sahara and the incomplete Fontainebleau, on the site of the former Wet ’n Wild water park. County records show the 27 acres are owned by Sahara Las Vegas Corp., a subsidiary of Archon Corp. Paul Lowden is listed in state records as president of Sahara Las Vegas Corp. His wife, Sue Lowden, a Republican candidate for U.S. Senate, is listed as secretary and treasurer.
A year ago, International Development Management tried to buy the 27 acres for an estimated $618 million, but the deal never materialized.
In documents filed with the county, the arena proposal would cost $751.7 million ($404 million construction costs; $347 million for the land), and would employ 4,100 construction workers. An analysis by the group said it would create 7,300 permanent jobs and generate $371 million in tax revenue over 30 years. Groundbreaking could be this summer The arena would be completed in the third quarter of 2012, the company says.
Many find it hard to believe that Las Vegas, known as a “can do” city has not been able to build a world class sports arena or stadium. Taking nothing away from the very successful Thomas & Mack. Now Jerry Jones and his new, world class, Cowboys Stadium is a competitor in staging top boxing matches, and taking the NFR from Las Vegas. The PBR (Professional Bull Riders) have already held an event there, with great reviews and attendance.
March 4, 2010 - Las Vegas Sun: Rodeo Rustler? Tourism Officials Worry Dallas Cowboys Owner Could Steal Vegas Event
Clark County may need a new arena to head the Dallas Cowboys off at the pass.
Cowboys owner Jerry Jones has made it clear that he wants his $1.2 billion state-of-the-art stadium to supplant Las Vegas as the premier site for the biggest boxing matches. Now local tourism officials are concerned that Jones’ posse plans to corral the National Finals Rodeo, Las Vegas’ premier December event.
March 7, 2010 – How Jerry Jones became interested in boxing during a chance meeting with Ross Greenburg, president of HBO Sports – Dallas Morning News: Jerry Jones Says He’s a True Contender
“I am certainly a fan of boxing,” Jones said. “But that is not what this fight is about. This is a very logical way to introduce our stadium to the world and lift its aura.”
Jones is serious about aura and dollars. He needs big events for his big stadium. He is eager to challenge Las Vegas for fights. Jones believes his stadium’s seating capacity, its ambiance and its heavyweight video screen combined with North Texas’ growing population – which includes a large Hispanic demographic that embraces boxing – are his aces in the hole.
HBO’s Greenburg calls Cowboys Stadium “a potential Woodstock for sports,” equating big fights with major events like NCAA Final Fours and NBA All-Star Games. “Put on a quality event and people will come,” he said.
Promoter Bob Arum and Jones preach that the sheer number of seats at Cowboys Stadium offsets the tonier price of seats in Las Vegas. “It’s simple math,” Arum said. “And watching replays on the big screen during the fight is something that has to be mind-boggling. … Anybody misses anything, and believe me that happens even at ringside, and there it will be replayed bigger than life.”
For Pacquiao-Clottey and its heavily Hispanic undercard, Cowboys Stadium has been configured for 45,000 seats. More than 35,000 tickets have been sold. That’s a big number for boxing in Texas, where day-of-the-event ticket sales traditionally are huge.
Update – March 8, 2010 – The Kats Report: An Open Workout for Clottey in Dallas, and That Means One Thing: Jerry Jones is in the House
For 25 years, UNLV’s Thomas & Mack Center has been home to the NFR. Last year, its 10 nights of competition posted an attendance of 174,000, including an estimated 35,000 out-of-towners, delivering a much-needed economic boost of $50 million during an otherwise slow time of the year.
The Cowboys know the NFR brings in big bucks, of course. They also know “the Super Bowl of rodeos” would be a particularly plum event in a part of the country famous for 10-gallon hats and boots. In fact, the first three NFRs were in Dallas beginning in 1959.
So far Jones and chums are keeping their strategy for bringing the NFR back to Texas under their Stetsons. But Brett Daniels, director of corporate communications for the Cowboys, acknowledges that his team has “had a few initial conversations and invited people to see the venue.”
“We’re not actively pursuing it at this time,” he reassures, but, he adds, “We’re interested in finding out more about it.”
Translation: Las Vegas has the NFR locked up in a contract through 2014, but Cowboys Stadium is aiming to be its new home when that contract expires.
Las Vegas Convention and Visitors Authority President and CEO Rossi Ralenkotter has seen how aggressively the Cowboys’ posse pursued virtually all of the nation’s other big-ticket events. They managed to lasso this year’s NBA All-Star Game, the 2011 Super Bowl and the 2014 NCAA basketball Final Four. Jones offered $25 million in his bid to snatch the Manny Pacquiao-Floyd Mayweather Jr. championship boxing match away from Las Vegas, and when that bout fell through, Jones snagged Pacquiao for a fight against a lesser opponent for the same date that the Mayweather fight was expected to occur, March 13.
March 10, 2010 – The Kats Report: A First Look at Cowboys Stadium, Which is a Really Impressive Fight Club
What type of praise would be appropriate for Cowboys Stadium? You enter this gleaming, domed enormity after having been exposed to such unrelenting hype you almost want to hate it just to be different. Or, if you will, “dif’rnt.”
But Cowboys Stadium is as staggeringly impressive as advertised, even as it advertises itself with an LED screen that is as big as, well, Boulder City. This stadium is so brilliantly over-the-top, with its mirrored exterior, let-the-sunshine-in retractable roof and 110,000-seat capacity, that if CityCenter were to incorporate a sports venue, Cowboys Stadium would be that place.
At a cost of $1.2 billion, it would just about put the cost of CityCenter to an even $10 billion. So when Jerry Jones asks, “What do you think of the place?” complaining that the restrooms are a little difficult to locate seems pointless.
“Amazing,” is all you can say, shaking your head. “Love the screen.”
