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Perfect arrangement’ falls apart; Majestic out as partner on UNLV Now project

University says it’s going forward with plans for on-campus stadium

Image

Majestic Realty Co.

UNLV Now mega events center rendering.

Updated Wednesday, March 27, 2013 | 9:45 p.m.

UNLV Now Stadium Renderings

UNLV Now mega events center rendering. Launch slideshow »

UNLV Now Stadium

A model of the UNLV Now stadium project is shown here at the Nevada System of Higher Education's Board of Regents meeting on Friday, Jan. 11, 2013. UNLV and its private developer partners updated regents on the project, which now features a 100-yard-long video screen and six VIP suites seating 300 people. Launch slideshow »

UNLV is severing its ties with private developer Majestic Realty, ending a nearly three-year exclusive partnership on a proposal to build a 60,000-seat "mega-events center" on campus.

UNLV will conclude its exclusive negotiating agreement with Majestic on May 27. The university announced its decision in a news release late Wednesday afternoon.

The exclusive negotiating agreement, which was approved last summer, was set to expire Sept. 30, said Don Snyder, the UNLV Now project leader.

There were concerns from the Strip resort industry about Majestic's role in the project, especially over how much the company — backed by Los Angeles billionaire Ed Roski — stood to gain from its exclusive partnership with the university, Snyder said.

"That was one of the biggest challenges we had," Snyder said, explaining UNLV's decision to part ways with Majestic. "The true partnership has to be between the university and the resort industry. Having a private, for-profit developer standing between us wasn't going to facilitate getting the project done."

Majestic, which first proposed the stadium concept in 2010, poured millions of dollars into research and development for the UNLV Now stadium project. Roski had pledged about $360 million to $400 million — about 40 percent of the total stadium cost — in addition to assuming the risk to build the project.

As late as this month, UNLV and Majestic were working "lock-step" to introduce a legislative bill that would create a special tax district on campus to pay for the stadium, said Majestic point man Craig Cavileer.

That's why UNLV's sudden decision to sever ties came as a shock to Cavileer, who is also the president of the Silverton Hotel and Casino, an off-Strip resort.

"We are very, very disappointed," Cavileer said. "We are also surprised and perplexed by their decision to terminate the (agreement). We were the purported and proposed development partner. We were working closely together.

"We thought we made for a terrific partner," he continued. "We had a perfect arrangement."

Snyder thanked Majestic's early support and commended the company for raising the profile of the project in the public's eye.

"They spent a lot of time and money to move this project, and they developed a great level of emotional equity," Snyder said. "I understand (Cavileer) is disappointed and I feel badly about that, but this decision was necessary. We would feel worse if we couldn't finish this project."

UNLV terminated its agreement with Majestic early amid mounting pressure from the resort industry over the cost and scope of the $800 million to $900 million stadium proposal.

In early February, MGM Resorts International announced it "cannot support the current UNLV Now concept," arguing the project’s price tag was too prohibitive. MGM, which had earlier pledged $20 million for UNLV Now, later announced plans for a 20,000-seat arena on the Strip.

About the same time, the Nevada Resort Association and the Las Vegas Convention and Visitors Authority tempered their endorsement of the stadium, focusing their efforts on other projects such as renovating the Las Vegas Convention Center.

By dropping its private developer partner, Snyder said the university hoped to garner support from the wider resort community. The stadium will remain a public-private partnership, but the private partner will be the resort industry in general, Snyder said.

"We have determined that stakeholders need to have a voice here," Snyder said. "This is a better opportunity for their voices to be heard.

Currently, Snyder is talking with the six largest resorts in town as well as the Nevada Resort Association on earning financial backing for the stadium project.

The scope of the project will likely change as a result of Wednesday's decision to drop Majestic. UNLV Now developers may look at hiring another architect to come up with renderings for the revised stadium project, Snyder said.

"We need a clean sheet of paper to have a straightforward, honest dialogue," he said. "It's realistic to expect that's something that we need to do."

UNLV gave 60 days notice of its decision to sever ties with Majestic, as required under the "termination by convenience" portion of their exclusive agreement.

UNLV is not liable for any development costs incurred by Majestic, but is now required for the next two years not to enter into any agreements with other developers to build the stadium project unless it first offers it to Majestic under favorable and acceptable terms.

This timeframe may not affect UNLV that much, as it will likely take until the next Legislative session in 2015 for a special tax district to be approved on campus. This will likely delay the stadium project's groundbreaking by at least two years.

Earlier this month, Assembly Speaker Marilyn Kirkpatrick introduced legislation that would create a tax increment financing district that would divert property tax revenue back into the stadium project.

"It's more important to get it right than to get it done fast," Snyder said. "The 18-month (delay) I count to be an investment to get the project right."

While disappointed by the turn of events, Cavileer said he was still hopeful for UNLV Now stadium proposal.

"It's a fantastic project," he said. "We would love to see it get done."

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  1. That should do it. While it seemed like a nice project, the costs have skyrocketed. Close to billion and with cost overruns it woud likely be in excess of a billion dollars. Just way too much to spend with no professional anchor tenant and what would likely be a tough calender to fill.

    No soccer (turf), big concerts are fading to smaller venues that MGM wants to build, a football program that simply will not draw 60K and you don't have much more than the rodeo and maybe a final 4 tournament. Once MGM withdrew from the project citing the costs, I think the project was doomed.

  2. I agree with tom . let's just put an end to all the talk about this . it was nice on paper but if you don't have the support from the casinos and the convention authority you have no chance . how much money has been spent already on architect fees,planning,research,and other cost ? if you don't have aeg behind you like the sprint center has in Kansas city you would have a hard time filling it . unlv football with 3 wins a year wont do it either

  3. If UNLV had been more serious about it's football program and had more community support then this would be built, no questions. But the football program is probably the worse division 1 program in the nation and has no community support and this stadium is not going to change that. The atrocious football played at UNLV in the past 2 decades has come back to haunt this university...

  4. They need to bring Chris Milam into the mix. As soon as he's done tricking the Mormon mayor into thinking of an events center in Henderson, he can propose building the same stuff at UNLV. Hasn't got a pot or a window to throw it out of, but so what? Next up-the latest Mayor Goodman. And so it goes on and on and on...

  5. Another project where the eyes were bigger than the stomach. I can't for the life of me understand how the scope grew so large when obviously the casino owners and the LVCVB had severe reservations. Sounds like a big lack of coordination. Now, after they got everyone riled up with the 1st class option, they have to go to plan B...C or D. Its dead in the water, or as we might say here..dead in the desert.

  6. 1st down on their own 1 yard line - and they punt. Yup - that's UNLV.

  7. Agreed, once MGM pulled out to build their own arena, this project was finished. Majestic is just another nail in the coffin.

  8. Kudos to UNLV for being one of the only local/state governments in Nevada to take advantage of an out of town developer. 99.9% of the time, it's the other way. A brilliant move.