Convention Center Follies. Heywood T. Sanders
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a concert hall and a stadium. But in order to win the support of the casino hotels, the board promised not to lease any of the land for a new casino for the next ten years. The promise once again was that the ever-growing stream of hotel tax revenues would pay off the bonds, with no impact on local property taxpayers. However, the Review-Journal mounted a spirited attack on the bond proposal, including an editorial that argued that the land deal amounted to “giving a group of politicians control over some of the most valuable property in the county, opening the door for all kinds of transactions, handing them a blank check to do anything they want with it.” County voters overwhelmingly opposed the $18 million bond proposal.80
Four years later, the renamed Convention Authority returned to the county’s voters with a proposal for a $22 million bond issue to fund center expansion, a stadium near downtown Las Vegas, and a museum for Henderson. This time the Review-Journal backed the bond issue, terming center expansion “an inevitable step in our effort to remain competitive in the convention market.” Yet once again, the county’s voters proved unwilling to endorse funds for convention center expansion.81
Convention Authority board members blamed the 1968 defeat on a “lack of understanding” by the voters, with some concern expressed over the decision to include facilities beyond just the convention center. Still, both local business leaders and authority board members were unwilling to give up on the prospect of a bigger convention center. Promoting a new albeit far more modest $7.5 million bond issue in August 1970, businessmen created a $50,000 fund to back the claim that “The Convention Center has been open and operated for 11 years and not one cent of its cost has ever been assessed against property taxes.” The Review-Journal described the Greater Las Vegas Chamber of Commerce as “going all out to get their message across” and pass the bond issue. The September 1970 vote proved—finally—successful, with a three to one margin in favor of the bonds.82
The Convention and Visitors Authority followed the modest success in 1970 with a larger, $12 million bond proposal in late 1974. Again promising, “Not one penny out of your pocket,” the November 1974 bond proposal was passed by county voters. That electoral success was followed by a $20 million bond proposal in May 1980. This included funding for convention center expansion ($12 million), new parking ($5.5 million), and convention and recreation facilities for the cities of North Las Vegas, Henderson, and Boulder City. The county’s voters approved the general obligation bonds on May 27.83
The succession of electoral defeats and successes made evident the reality that Clark County voters were not consistently supportive of investment in an expanded convention center, despite the repeated arguments that the bonds would be repaid solely with hotel tax revenues. As a result, the Convention and Visitors Authority had been forced to scale back its expansion plans to bond issue amounts that could win voter approval. That had the effect of slowing up the convention center’s growth, even as the total number of hotel rooms in the county grew, from 25,430 in 1970 to 45,815 in 1980 and 73,730 in 1990.
The Convention and Visitors Authority also faced another political problem. Its stream of hotel tax revenues was a tempting target for city officials, who had long seen the downtown area and its casinos suffer as the “Strip” casino hotels near the convention center expanded. The downtown business interests, represented by the Downtown Progress Association, sought their own convention complex. The resulting deal, completed in 1977, led to the Convention and Visitors Authority financing the development of a “mini-convention center” and sports complex, the Cashman Center, adjacent to the downtown core. In subsequent years there would be other interests, notably at the state level, that also sought their own pieces of the authority’s stream of tax revenues.
Faced with the history of bond issue defeats at the polls and the need to craft convention center plans to gain voter support, the Las Vegas Convention Authority board sought some fiscal alternatives that avoided voter review. The first such effort came in 1983, with a deal the authority struck with local tradeshow owner Sheldon Adelson. Adelson, who put on the annual Comdex show for the computer industry, sought to gain more space by paying for an expansion of the center in return for guaranteed rent of just $1 per day. The Adelson deal enabled the authority to expand the center once again, but without having to sell local voters. By the middle of the 1980s, the organization and casino hotel owners sought a more permanent means of avoiding voter review. The result was a change in state law that allowed the county commissioners to authorize bonds backed by pledged revenue—in this case, the dedicated hotel tax—by a two-thirds vote, bypassing the need for public vote on a bond issue.84
The exact timing and substance of the change in bond procedures is not documented, but when the Convention and Visitors Authority began to consider a $35 million expansion and renovation effort in early 1988, the bonds did not go before the county’s voters. The 1988 bond issue was followed by a regular—and regularly growing—stream of new bond issues to pay for even more expansion and improvement of the Las Vegas center. The Convention and Visitors Authority sold a $50 million bond issue in August 1993, followed by a $78 million issue in 1996, and a $5 million issue (for athletic facilities for the University of Nevada at Las Vegas) in 1998.
The Convention and Visitors Authority opened a major new expansion with 279,000 more square feet of exhibit space, funded by those bond issues, in November 1998. But even before that latest expansion was open and operating, the authority was making plans for yet another, far grander, expansion. The LVCVA commissioned a consultant study of expansion possibilities in June 1998. And, perhaps recognizing the growing claims by other units of government on its stream of hotel tax revenues—the county public schools would succeed in getting a piece of the tax for school construction in early 1999—the Convention Authority unveiled an innovative approach to financing more convention space.85
The LVCVA heard from three major tradeshow organizers, including the Consumer Electronics Show and Reed Exhibitions, that they and other show managers were prepared to put up $40 million towards the expansion cost, then estimated at $79 million. Tim McGinnis of Reed Exhibitions termed Las Vegas, along with Orlando, as “the two hottest markets for conventions,” and said, “A lot of shows want to come to Las Vegas but can’t get dates. Without additional space, it puts a strain on generating additional revenue for a company.”86
By relieving the hotel tax, and the Clark County government, from a large part of the burden of financing a major expansion, the Convention and Visitors Authority was attempting to both “sell” an expansion and compete head-to-head with Orlando, then planning its own major expansion. But both the expansion and the financing arrangement generated an immediate and sustained outcry from Sheldon Adelson. Adelson had gone on to build his own major private convention center as part of the Sands Hotel, with one million square feet of exhibit space. He opposed the financing arrangement, arguing that it would take business from his facility and imperil the authority’s future income stream, threatening to sue if the authority moved ahead.87
Sheldon Adelson’s opposition had the effect of slowing expansion plans, delaying action from April until June 1999. Yet even as he argued that the LVCVA should bring its expansion and bond plans directly to the voters, the authority was planning on an even more effective end-run around the public review of new debt plans. The authority had sought state legislation that would enable it to issue revenue bonds itself, without the approval of Clark County commissioners. That revenue bond authority would ease the financing of this, and future, expansion efforts while stymieing any attempt by Adelson, or the convention center’s neighbors, to appeal to the county commission. Nevada Governor Kenny Guinn signed the revenue bond authority for both the Las Vegas and Reno convention authorities at the end of May.88
The LVCVA’s new revenue bond legislation also enabled the Convention Authority to tackle a far larger and more expensive project. By the end of June, the expansion’s cost had grown to $150 million, and the board chose to move ahead despite Adelson’s objections. Predictably, Sheldon Adelson and his Venetian Hotel filed suit against the authority the next month, alleging that the LVCVA had violated state law by seeking to issue revenue bonds backed by hotel tax revenues.89
The court decision in October 1999 fully upheld the Convention and Visitors Authority and its use of revenue bonds