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Developer: Proposed stadium not viable without city chipping in $3M a year

Stadium

Cordish Cos.

Artist’s rendering of proposed stadium.

Updated Wednesday, Sept. 17, 2014 | 4:30 p.m.

A downtown soccer stadium isn’t financially viable without a $3 million annual contribution from the city, a developer for the project told the Las Vegas City Council today.

The response came from Port Telles of the Cordish Cos. after being pressed by Councilman Bob Coffin on why the developers can’t borrow the money needed for the $200 million stadium themselves or find a partner to put up the financing.

“It needs to be a public-private partnership. If we were to go out to build the entire stadium privately, we simply cannot do it,” Telles said.

The public’s share of the stadium’s cost has become the defining issue as council members debate an agreement with a development partnership between Cordish and Findlay Sports and Entertainment.

Under the current terms, the city would cover more than 75 percent of the upfront construction costs through bonds and cash. Rent from the soccer team and other event revenues would be used to pay off the bonds. The city would also chip in $3 million in hotel room taxes annually.

If the stadium succeeds and the team serves out the full 30-year lease, the city’s share would be 41 percent of the total costs. But if the team struggles, the city would be on the hook to cover up to $8 million in annual debt payments.

Wednesday’s council meeting also saw the release of a new financial analysis showing the stadium would bring in revenues of $7.4 million against expenses of about $5 million for a net operating income of $2.4 million.

The new financial analysis corrected an error in a previous version circulated last week.

Councilman Bob Beers, an opponent of the stadium, criticized the developers for providing inconsistent and varied projections for the stadium.

“We have a developer here who has delivered three final drafts, all of them late, none of them making sense,” Beers said.

Wednesday’s analysis focused only on stadium operations and not the financial viability of the soccer team. The analysis showed the team will need at least $6.2 million per year for its share of the bond payments and to cover its expenses for using the stadium. That doesn’t include other team operating expenses like staff or marketing.

The soccer stadium faces a critical vote Oct. 1. The council is divided with three members in support, three members in opposition and Councilwoman Lois Tarkanian still undecided.

The city is holding public meetings this week and next to pitch the soccer stadium to the community.

If the council approves the nonbinding financial terms in October, the developer would return in December with a lease and development agreement. A supermajority of at least five council members would need to vote in favor of the project in December for it to be finalized and become reality.

See the analysis below.

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