Strip sports arena would require taxpayer money, officials say

Tax dollars have to be a part of the financing package for a Las Vegas sports arena to be built, two panelists addressing a real estate association on tourism issues concurred today.

Marybel Batjer, Caesars Entertainment vice president of public policy and communications, said without some public financial support, an arena that could be used by a National Basketball Association team and for other major spectator events would never be built.

Panelist Marshall Minor, vice president of Las Vegas-based Valtus Capital Group, agreed and said stadiums and arenas across the country have relied on tax dollars for at least some of the financing.

Batjer, Minor and Las Vegas Convention and Visitors Authority President and CEO Rossi Ralenkotter addressed NAIOP, the Southern Nevada chapter of the Commercial Real Estate Development Association, on tourism topics at UNLV this morning.

Batjer gave details about Caesars’ plans to develop an arena with at least 20,000 seats on 9.8 acres east of the company’s Imperial Palace and north of the Westin Casuarina.

Caesars officials have estimated the arena has the potential of generating 61 million visitor days a year from tourists based on visitor counts and hotel stays in rooms within 2.5 miles of Flamingo Road and Las Vegas Boulevard and averaging two persons per room and 90 percent occupancy in addition to the local market.

A measure to create a special tax district in the resort corridor and impose a 0.9 percent sales-and-use tax to finance stadium construction was raised by an initiative petition backed by Caesars. Lawmakers rejected the petition, which means the measure will be on the November 2012 ballot.

But not everybody is on board with the Caesars plan.

Gaming industry rival MGM Resorts International opposes public financing for the arena and filed suit to block the Caesars plan. The company also lobbied the Legislature for a competing measure on the ballot rejecting the formation of the special tax district. Gov. Brian Sandoval signed that legislation this month.

The Nevada Supreme Court will hear arguments on an appeal to lower court rulings allowing the Caesars initiative to go forward and if opposing measures appear on the ballot, the one with the most votes would win.

Batjer said the competing measures would likely confuse voters, which she said is part of the strategy to block the Caesars plan.

If voters approve the arena initiative, construction would begin by early 2013, she said.

The arena is part of a larger Caesars master plan that includes Project Linq, a corridor of retail, dining and entertainment establishments between the Flamingo and O’Sheas on the Strip. The plan also includes a 600-foot-tall observation wheel and nine- and five-level parking garages that would accommodate more than 4,000 vehicles.

Batjer said the tax district plan would contribute about one-third of the financing needed to build the arena with the other two-thirds put up by private industry, including Caesars’ contribution of the property.

She said the arena would be within walking distance of 35,000 hotel rooms and that there would be good access to Koval Lane for vehicles and the Las Vegas Monorail.

Minor said there’s plenty of equity capital available to developers for the project.

“There is money,” he said. “It isn’t a scarcity of funds. It’s more about whether they make (return-on-investment) sense.”

Ralenkotter said the authority would continue to take a neutral stance on the arena.

“Our mission is to fill hotel rooms,” said Ralenkotter, whose board includes representatives of Caesars and MGM Resorts. “But we also think it’s not a matter of if an arena will be built, but when. And we’ll work with whoever brings an arena here.”