Henderson City Officials Release Another Round Of Public Relations Sweetness To Bolster Case Of Subsidizing VGK Minor League Hockey Arena At Pavilion Site

By Alan Snel of LVSportsBiz.com

The Great City of Henderson Hockey Arena Public Relations Tour made another pit stop at Email Alley Wednesday when the city sent out a press release saying the proposed Golden Knights’ 6,000-seat minor league hockey arena — or “Henderson Event Center” — at the site of the Henderson Pavilion would deliver venue operating cost savings and projected tax revenues.

The biggest reveal in the press release is that the projected operational cost savings and tax revenues are based on “a total project cost of approximately $80 million, with up to an additional $4 million for contingencies” to be shared equally between the city and the Golden Knights’ newly-acquired American Hockey League affiliate that was previously based in San Antonio, Texas and purchased in February.

Henderson officials claim the city will gain $40.9 million in projected savings and tax revenue generated over 20 years — which would equal the life of the bonds that would be potentially issued by the city to support Henderson’s contributions towards the proposed $80 million arena project at the pavilion.

Here is the key to the city of Henderson’s argument in the release: “The one-year return on investment to the city for the proposed Event Center is projected to be 106.57 percent based on matching investment from the Vegas Golden Knights, annual savings from no longer operating the Pavilion, and enhanced tax impacts created by economic benefits of the Center.”

Here’s a look at the size of the 6,000-seat arena on the site off South Green Valley Parkway, a busy road that also serves shopping areas and public service buildings besides residential neighborhoods and side streets.

 

Last week, the city issued another public relations blurb with these assertions. Construction of the proposed Henderson Event Center would:

• Generate a one-time economic output of $142.1 million
• Generate the equivalent of 1,017 full-time jobs during construction
• Support wages and salaries of approximately $54.7 million during construction

 Ongoing operations would:

• Generate annual economic impact between $17.2 and $26 million
• Generate annual wages and salaries of venue personnel between $6.3 and $9.4 million
• Support between 89 and 122 direct jobs annually

Let’s break down the city of Henderson’s strategy to convince the public that subsidizing a rebuilt multi-use event center to house the Golden Knights’ minor league team would be a good investment. The 6,000-seat venue would also host performing arts organizations like the Henderson Symphony Orchestra, and concerts, festivals, theatrical arts and graduations.

So, the city has already begun the process of paying its share of the events center/hockey arena. The issuance of general obligation bonds that was approved by the Henderson City Council on April 21 will provide funding for not only the arena but also a new far west Henderson police station and training facility; new parks and recreation facilities; and the rehabilitation of existing facilities, including this rebuilt Henderson Pavilion/Event Center project.

This is a common ploy used by local governments to subsidize venues used by pro sports teams. A city or county, for example, lumps the sports venue with other public needs in a package deal in order to make the use of public money for the sports venue more politically palatable to local residents.

That April 21 approval provides city officials with the ability and authority to fund civic projects with bonds so that Henderson can move forward with the planning, design and construction process. What’s unknown, though, are the specific project budgets and construction costs. When those are publicly disclosed, the Henderson City Council will still need to approve the expenditures that will be funded by a bond issue.

The city of Henderson also says that not operating the Henderson Pavilion will also mean “substantial savings,” according to today’s media release, because the Pavilion costs more than $1.6 million to maintain a year.

That’s another strategy used by local governments to justify spending public dollars on sports venues. Case in point: the Las Vegas Convention and Visitors Authority (LVCVA), the Las Vegas public tourism agency, made that same argument in October 2017 when trying to justify giving $80 million in public funds to Howard Hughes Corporation in the form of a naming rights deal to help Summerlin’s master developer build its private Las Vegas Ballpark in Downtown Summerlin.

The LVCVA claimed it was wasting and losing money on trying to maintain the minor league baseball team’s previous venue, Cashman Field. So the tourism agency said why not take that money it claimed it was losing at Cashman and give it to privately-controlled Howard Hughes Corporation so that the land developer could build its $150 million palatial baseball park in its Downtown Summerlin business district.

Look for more press releases making a case for the Golden Knights minor league arena/Henderson Event Center in the upcoming weeks and months.

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