Courtesy of Madison Square Garden
Thursday, July 19, 2018 | 2 a.m.
Las Vegas Sands Corp. will contribute $75 million to the MSG Sphere arena project being built behind two of its Las Vegas Strip properties.
Documents filed Wednesday to the Securities and Exchange Commission show Sands will pay out the money to Madison Square Garden Co. incrementally upon construction milestones being met on the site owned by the gaming giant. The project's final price has yet to be revealed.
The 360-foot-tall by 500-foot-wide facility features a 580,000-square-foot spherical shape wrapped in an open-air trellis structure that includes 190,000 linear feet of LED lighting that is fully programmable to create a digital showcase.
The money is part of a ground-lease agreement, as MSG is developing the planned music and special events arena on land owned by Sands. The sum will go toward project construction costs, including for an 1,100-foot-long pedestrian bridge planned to link the arena and the Venetian, Palazzo and the Sands Expo Center.
Good for 50 years, the lease agreement states the foundation work must begin within 18 months from the agreement date (July 13) and have three years after that to complete the arena. That would reach into early 2023, but MSG has said construction is planned to begin this summer, with a planned late 2020 completion date.
The lease agreement does not require MSG to pay Sands any fixed rent for leasing the parcel. If certain return objectives for the MSG Sphere are achieved, Sands will receive 25 percent of the after-tax cash flow over those objectives.
The arena is set to create an immersive environment incorporating all five senses.
Seating up to 18,500, the arena will feature a 170,000-square-foot LED display, which MSG touts as the largest and highest resolution LED screen in the world.
MSG Sphere is projected to provide 3,500 local construction jobs during the building phase and 4,400 jobs annually once the arena is open, according to a study from Hobbs, Ong & Associates.