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Arnold M. Knightly

Harrah's stake in arena still being negotiated

17 September 2008

LAS VEGAS, Nevada -- Harrah's Entertainment's participation in developing an arena on the Strip seems to be up in the air.

The gaming giant said Tuesday it is continuing to negotiate its role in a joint-venture partnership to build a 20,000-seat arena on 10 acres of land owned by Harrah's behind Bally's.

However, any arena built there will not open before 2011, according to federal documents.

"We believe the arena project is an important one for Las Vegas, and continue to make land available for the project," Harrah's said in a statement Tuesday. "We remain in negotiations with (Los Angeles-based Anschutz Entertainment Group) to finalize the arena transaction."

A company spokeswoman declined to elaborate on the negotiations.

Harrah's statement comes after Sports Business Journal reported that the gaming company had backed out of investing in building the arena. The newspaper said National Hockey League officials had expressed fears that having one casino operator develop the arena, which was planned to house an NHL or National Basketball Association franchise, may deter other gaming companies from using it.

Another statement from Harrah's said the negotiations include "a possible ownership structure that was always one potential capital structure for the deal," casting more confusion on its role.

The gaming company and AEG announced a partnership in August 2007 to privately fund an arena, but both sides have remained largely quiet about progress on the project.

The $500 million project was to be financed by both companies, with AEG developing, building, operating and managing the arena. Harrah's put up the land for the project.

Both parties said at the time that funding for the arena was in place and that neither party would have to rely on the volatile credit markets.

No one from AEG was available to comment this week on the arena.

An AEG spokesman said this month that an architect and a project manager will be announced soon.

AEG, which built and operates the Staples Center in Los Angeles and the Colosseum at Caesars Palace, had been focusing on the Sept. 10 opening of O2 World, a 17,000-seat arena in Berlin.

Clark County Commission Chairman Rory Reid said Monday that he has met with AEG recently and "it's my understanding they're moving ahead with the project. As to a time line, I'd defer to them."

When the project was announced, AEG said plans called for the arena to break ground last June with a September 2010 opening.

As late as February, Harrah's was still talking about the arena opening in 2010, according to a filing with the Securities and Exchange Commission.

However, in the company's first-quarter earnings report released May 16, the opening date was moved to 2011.

Loveman did not discuss the project any further during the conference call with investors and analysts.

Clark County spokesman Dan Kulin said no plans for the proposed arena have been filed with county officials.

Reid said he continues to receive assurances from both Harrah's and AEG that the arena remains a priority.

"AEG, according to them, has never announced a project that they haven't broken ground on and completed," Reid said. "They're committed to this and it would be a good thing for our community. I hope they push ahead."

Harrah's stake in arena still being negotiated is republished from