Chinese company agrees to finance proposed Henderson arena
10 February 2012
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A Chinese company and its banks have tentatively agreed to finance a $650 million arena in Henderson, the arena developer announced Friday.
Whether the Silver State Arena will actually get off the ground, however, is an open question, despite Friday’s announcement by developer Chris Milam’s companies, Las Vegas National Sports Center and International Development Management.
It’s an open question because of the many hurdles Milam needs to overcome and questions about the arena project.
Milam’s companies said China Security & Surveillance Technology Inc. of Shenzhen, China, and its Chinese banking partners signed a “memorandum of understanding” providing for full financing of the 17,500-seat arena.
Friday’s announcement covered only the indoor arena portion of what has been billed as potentially becoming a $1.3 billion project that would include a separate open-air stadium. The proposed site is on Bureau of Land Management property south of the M Resort.
China Security & Surveillance, in a regulatory filing, said it had $1.4 billion in assets as of June 30.
Lee Haney, a consultant to Milam’s companies and their spokeswoman, said the next steps will be for the parties to convert the memorandum into a binding contract, to gain city of Henderson approval for a tax-increment subsidy deal and to obtain unused federal land from the Bureau of Land Management for the arena.
She said Milam hopes to break ground “in mid-2012” and open the arena by mid-2014. Milam is in talks with professional teams in hopes of landing a tenant for the arena, Haney said.
Milam — who’s previously proposed several stadium and arena proposals in the Las Vegas area that didn’t get off the ground — has plenty of work to do to make the Henderson arena project happen.
The arena is competing with several other proposed arenas around the valley, including arenas that would be built at UNLV and in downtown Las Vegas.
Milam also needs to convince policymakers that the Las Vegas area needs and can support another arena, given that it already has five indoor arenas and several are capable of hosting the types of sports (basketball and hockey) and entertainment events his arena would host.
The existing arenas are the Thomas & Mack Center, the MGM Grand Garden Arena, the Mandalay Bay Events Center, the Orleans Arena and the South Point Arena & Equestrian Center.
The problem with the Las Vegas arenas, critics say, is they’re too small or outdated to host an NBA team, and Las Vegas is even in danger of losing the National Finals Rodeo.
But with professional sports teams wary of locating in the U.S. casino capital and sports wagering prevalent in Las Vegas, some critics wonder if Las Vegas can ever land a major league professional team.
Another issue for Milam is that for years he’s been fighting lawsuits alleging wrongdoing on his part in a failed plan to develop condominiums west of the Hard Rock hotel-casino in Las Vegas.
One of those suits, which resulted in a $1.1 million judgment against Milam, is on appeal to the Nevada Supreme Court, and Haney on Friday said Milam is confident of having the judgment reversed.
In the lawsuit at issue, Clark County District Court Judge Mark Denton signed an order with particularly harsh language about Milam, finding he was involved in fraud and breach of fiduciary duty.
The order says he “misappropriated” $1.1 million contributed by investors to the condominium project and made false representations that the $1.1 million was his personal equity contribution to the project.
Milam, in the meantime, has yet to acquire the BLM land.
A BLM spokeswoman said Friday that the agency has been reviewing a city of Henderson proposal for a land sale for the arena.
If the BLM decides to proceed with the proposal, it would first need to decide how to structure the transaction and then open the proposal up for public comment. The public comment process alone could take 30-60 days, and there’s no set date for that process to begin, BLM spokeswoman Hillerie Patton said.
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