Las Vegas Sun

August 25, 2019

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Downtown arena hangs fire

A development company that told Las Vegas it could build a downtown sports arena in three years plans to ask the city for 16 more months just to get its plans together.

Meanwhile, the city is getting ready to consider making new plans with other potential arena developers.

The developer, REI Neon/Warburg Pincus, is scheduled to seek City Council approval Dec. 19 of a final plan for a $10.5 billion project.

But one owner of a few lots within the downtown 85-acre parcel on which REI Neon wants to build its complex of condos, casinos, retail and the arena said the Michigan-based developer has asked him for more time.

"I, for one, am fed up," said Wes Myles, owner of the Arts Factory, which would be almost directly across Charleston Boulevard from the proposed Project Pulse development.

"I'm a developer - we want to build restaurants and bars and ceramic centers and glass blowing centers," Myles said. "I want to get on with my life."

Robert Reel, who together with business partner Tom Prato assembled the acreage for the project, suggested Monday that getting banks to loan money is "increasingly difficult" because of economic uncertainties.

"We're going to do the best we can to make sure it goes forward," he said.

An REI Neon spokesman could not be reached for comment.

City Business Development Director Scott Adams said late Monday that the city will propose an extension only until February. And between now and then, the city is going to open a parcel of property just under 12 acres near City Hall to negotiations with arena developers who lost out to REI Neon for the right to negotiate on the 85-acre plot, he added.

Henderson developer Ken Miller, with Dorian Lange of Michigan Equities Realty, proposed a plan to build a $4 billion arena development, including a 124-story hotel and casino, on the property just east of Las Vegas Boulevard from City Hall. That proposal also included construction on the current City Hall site, which would be possible in the future as plans are made to move City Hall.

Miller could not be reached for comment.

When REI Neon won approval to negotiate with the city in July, spokespeople talked about getting a 22,000-seat arena built and operational by fall 2010.

Not coincidentally, Harrah's Entertainment Inc. and Anschutz Entertainment Group announced at the same time that their proposed 22,000-seat, $500 million arena, east of Paris Las Vegas and Bally's on the Strip, also would be ready by 2010.

Mayor Oscar Goodman has repeatedly said the first arena to get a shovel into the ground would be most likely to succeed. But he also has suggested there could be room for two arenas in Clark County, one to possibly host a professional basketball team and another for professional hockey - a speculative scenario, given that neither major league has committed to awarding a franchise to Las Vegas.

But questions about REI Neon's ability to raise money for its project - the buyout of the landowners on the 85 acres alone is estimated to cost $900 million - arose shortly after the city selected the developer last summer.

Jon Weaver, REI Group president, told the Sun in August that finding investors willing to purchase debt had already become more difficult in the few weeks since the city chose REI Neon.

REI's project, which would be developed in several phases, is an ambitious one that, in addition to the arena, would include 6,000 hotel rooms, 1,500 condominiums, 1,600 time shares, 785,000 square feet of retail, 4 million square feet of convention space and 500,000 square feet of office space.

Doubts about the REI project were exacerbated by the company's request, first for a one-month extension to Oct. 31, then for a second delay until Dec. 19 as the deadline for returning to City Hall with a final deal. The council approved both requests.

Despite those postponements, and perhaps even with this new request, the area's eventual development - by REI Neon or someone else - isn't a question at City Hall, where planners see a need for development between the south end of the Strip and the 61-acre Union Park, which is expected to have six projects under construction by the end of next year.

Myles said he understands the vision and he knows development downtown is moving quickly. But he also says he has grown increasingly frustrated waiting two years for REI Neon to pay him the few million dollars promised for his land. Last summer, he signed an agreement under which he received money upfront for REI Neon to hold the rights to his property until Dec. 15.

He said he now is talking to REI Neon about a similar deal to hold his property for 16 more months.

But he's not offering any firm vision about what he thinks is going to happen.

"The city put together the conditions and they have to be met or they don't," he said. "It's up to REI to get it done. I don't know if that's going to happen."

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