The Henderson City Council, aided by a prohibition on the public attending public meetings, is expected to vote Tuesday to spend $42 million on a project the city says will save $41 million over 20 years.
The city is ponying up the land and half of the money to build a 6,500 seat ice hockey arena for the Vegas Golden Knights’ minor league team in the heart of an upscale Green Valley neighborhood, prompting protests via petition, car parade, and what passes in the time of COVID for public comment.
The city is throwing in $16 million earmarked for redeveloping blighted areas, and subsidizing the team’s rent to the tune of $3 million a year.
The vote is scheduled for the same day the city intends to announce a three-cent increase in property taxes per $100 of assessed value.
“Not for this project,” cautions Chief Financial Officer Jim McIntosh.
“We’re not against an arena, we’re against the site,” says John Dalrymple, who lives near the site. “They don’t have adequate parking. They don’t have the infrastructure for the roads. And they’ve completely lost the confidence, trust, and faith of the people.”
Even the Henderson Chamber of Commerce is declining the opportunity to gush. “At this time we do not have an official position on the arena,” said chamber official Joshua Martin.
Henderson council members, with the exception of Dan Stewart, appear unbridled in their enthusiasm to cash in on the Midas touch pro hockey brought to Las Vegas Boulevard. But the corner of Green Valley Parkway and Paseo Verde is a far cry from the Strip.
Unlike the Summerlin baseball stadium, which is separated from neighborhoods, the Henderson arena is slated for the gateway to Green Valley Ranch, within a mile of more than 6,000 homes.
Resident Laura Sanchez formerly lived near the Nassau Coliseum, home of the New York Islanders at the time.
”Houses on our block sold for $300,000, much lower than surrounding towns, but had $12,000 in property taxes,” she says of her Long Island neighborhood. “People did not want to park at the arenas because of the $15 parking fee so they parked in our neighborhood and blocked our driveways and walked home drunk from cheap beer nights.”
“We moved here and saw the beautiful landscaping and well-designed amenities and thought we had found a small paradise,” she says.
Paradise, with apologies to Joni Mitchell, is about to be paved so Henderson can put up a parking lot.
A survey conducted by Discovery Nevada, a partnership of Applied Analysis, which performed the economic impact study for the arena, says 71 percent of Henderson residents believe the project would be good for Henderson. The survey listed the percentage of residents polled in each zip code. But Discovery Nevada declined to provide responses by zip code.
“The focus of the survey was to obtain feedback about residents’ awareness and perception from a statistically significant population of the City of Henderson as a whole,” said analyst Brian Gordon. “As part of the process, we obtained data from a representative sample of residents across all zip codes in Henderson. However, results at the smaller geography level (e.g., zip codes) would not be statistically significant on their own.”
Neighbors who live near the proposed arena suspect the approval rating in their zip codes was much lower.
“The premise was false, the questions were misleading,” says Dalrymple, an advertising executive who “is involved with marketing and research on a daily basis. I’m incredibly shocked by how misleading the city has been on this whole issue.”
Neighbors conducted their own survey on Next Door and found 71 percent of respondents were opposed, exactly the opposite of findings from Discovery Nevada.
“It’s not scientific,” says Dalrymple. “We did ours before Applied Analysis. They came back with the same percentage but the other way.”
Hockey, like all team sports, is on ice for an undetermined length of time. No one knows when teams, let alone fans, will return to stadiums and arenas. The City of Henderson seems undaunted by the unknown.
“I think history tells us that yes, our medical professionals will find answers” to the COVID-19 pandemic, says Assistant City Manager Robert Herr, who says he expects a return to normalcy by 2022, when the facility is set to open. “Obviously we’re taking a little longer view. We’re of the opinion that we’ll be able to get back to a normal state.”
Despite Herr’s optimism, stadiums and arenas throughout the world are making contingency plans that reduce occupancy in some cases by as much as 80 percent.
“I would fully expect buildings to open at reduced capacities,” says Don Barnum, a sports facility architect who says he spends “about 22 hours a day” figuring out how stadiums and arenas can optimize their seating while abiding by social distancing requirements.
“It becomes incumbent on the owner to do the financial analysis to see if they can open the doors at 20 percent capacity,” he says.
In the event of default, taxpayers would be on the hook for the general obligation bonds sold to finance the project.
Aside from the uncertainty clouding the future of sports entertainment, Barnum says it could be a good time to build a sports facility.
“If we were to compare to ‘08 or ‘09 coming out of the recession, it was a relatively good time to get construction projects when the market was soft,” he says.
“Just as FDR helped to lead our country out of the Great Depression through government infrastructure, this is an opportunity to invest in Henderson infrastructure, create jobs, drive investment and improve a facility that has been plagued with problems and is no longer usable as intended,” Mayor Debra March told the Current. “It is an opportunity to create the only enclosed venue in Henderson on a scale to accommodate not just sports, but the arts, as well as education, community and civic events.”
What’s the rush?
Revenue projections for the Henderson hockey arena are based on high, moderate, and low levels of attendance at events. But none envision the severe projections contemplated by arenas throughout the country.
Applied Analysis principal Jeremy Aguero, who authored the projections for the Henderson arena, says he has no plans to revise them in light of the pandemic.
“All I can tell you is that we’ve not been asked to provide that (updated information) to the council,” says the city’s finance director McIntosh. “And we commissioned the economic study before all this.”
“You are looking at 30 percent of the people in the valley being unemployed. You’re looking at three to five years for the travel industry to recover,” says Dalrymple. “The city has turned a blind eye and deaf ear to the realities. You can’t even assess the impact of COVID-19. Something is wrong with this. The economic study is completely misleading.”
The economic impact study predicts the construction phase would generate economic output of $142 million and the equivalent of 1,017 full-time jobs.
Applied Analysis projected the Raiders stadium would generate 11,000 direct construction jobs. The Current’s most recent analysis reveals the project generated 1,665 full-time-equivalent jobs through November 2019.
The Henderson hockey arena is projected to “support between 89 and 122 direct jobs annually,” says the city, which admits they will be part-time positions.
Assistant city manager Herr likens the project’s timing to Allegiant Stadium, another partnership of taxpayers and the private sector, which may or may not have fans present when the Raiders kick off. However, that deal was approved in 2016 and the stadium is nearing completion. Unlike Allegiant Stadium, city officials can still put the brakes on the Henderson arena proposal.
“We have been moving on a timeline. We were going to have to do something with the Pavilion,” says McIntosh, who says the Pavilion costs the city $1.6 million a year to maintain.
But Dalrymple thinks the arena is a vanity project for March, who “wants to use this as a platform for her career, her reputation, her ego.”
“When you go to the State of the City and announce this project in a pep rally or a campaign rally without anyone knowing about it, you’ve been working on this for quite some time in a covert way and that’s not right,” he says. “She wants to say she’s brought professional sports to Henderson.”
Dalrymple says the city failed to approach the community to come up with a plan.
“That’s a premier site and a premier piece of property and they are giving it away, essentially, to the Golden Knights,” he says. “They are going to subsidize (Golden Knights owner) Bill Foley at the same time they are applying for a federal grant because they can’t pay for first responders.”
Ironically, in December 2017, Foley advocated for spending public funds on public services, not stadiums.
“We can better spend that money on firefighters, teachers, and policemen. Let’s have the best of that as opposed to building the big stadium,” he said on CNBC’s “Power Lunch.”
“The city has listened intently to the concerns of nearby residents through a series of town halls, many individual meetings and conversations, as well as a website loaded with information about the project,” says March.
On Thursday, Dalrymple attempted to file an initiative petition with the city to take the matter before voters but City Hall was closed, as it has been for six weeks.
A security guard told him the government intends to open on Monday, the day before the vote.
Dalrymple plans to be in line when the City Clerk opens.
“They announced the details of this deal within a week of the vote,” he says. “We want this to become a ballot initiative. Let’s let the citizens decide.”