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Benjamin Spillman

LAS VEGAS TOURISM: $285 million budget approved

18 May 2007

LAS VEGAS, Nevada -- Facing scrutiny from a group that wants to divert Las Vegas room taxes toward road projects, the people in charge of attracting tourists and conventions to Southern Nevada approved a budget with $285 million in revenue and 37 new positions.

The Las Vegas Convention and Visitors Authority unanimously approved its 2007-08 income and spending plan on Thursday, but only after members of the board of directors questioned staff members about new jobs that added $2.4 million in costs to the bottom line.

Most of the new jobs are part of a graveyard shift the authority plans to create to do maintenance and upkeep to the 2 million-square-foot Las Vegas Convention Center without disrupting events in progress on the exhibition floor.

"We are not getting to a lot of repairs," Jim Gans, senior vice president of operations, told the authority board. Every time we get ready to start something ... we have another show coming in and the show manager wants those facilities."

The budget also sets aside $28 million to help pay for an $890 million renovation and expansion of the convention center. The authority said that is critical to ensuring Las Vegas remains the top destination in North America for conventions and trade shows, a segment of the hospitality industry that was worth more than $8.1 billion to the local economy in 2006.

The expansion money is important, the authority said, because competing destinations such as New York, Phoenix, Chicago and Orlando, Fla., have built or planned convention center upgrades ranging in cost from $600 million to $2.3 billion.

Mark Haley, the authority's vice president of facilities, told the board the new graveyard positions would not only improve short-term upkeep but also be a step toward properly maintaining the expansion when it is complete in 2011.

"It is a lot like painting the Golden Gate Bridge," said Haley describing how maintenance on a building as big as the convention center requires constant attention.

But authority members worry the expansion is threatened by a proposal from Gov. Jim Gibbons to increase the amount of room-tax revenue set aside for roads by dipping into the authority's portion of room taxes.

The authority gets 47 percent of revenue from a 9 percent room tax in Clark County. Gibbons wants to tap into future room taxes to raise money for road improvements without breaking his promise to prevent tax increases.

Brenda Siddall, the authority's finance director, said the authority needs to maintain its share of room taxes so it can set aside enough money by 2010 to make debt payments of $72 million annually, an increase of $47 million over what it pays now for debt service.

Otherwise it would need to increase rental rates for exhibition space, Siddall said.

"We would need to increase our facilities rate so much so that we would be the most expensive convention center in the nation," she said.

Others, however, said the proposal to improve roads in Southern Nevada without raising taxes outweighs the desire of the convention authority to keep its 47 percent share of room taxes in Clark County. The authority will keep $200 million of the $426 million in projected room tax revenue. The rest goes to everything from schools to roads, statewide tourism promotion and payments to local governments.

Monte Miller, a former member of Gibbons' transition team, said he supports the governor's idea to dip into the authority's share of room taxes in Clark County to pay for roads.

Miller said that with the authority slated to receive nearly $6 billion in room tax revenue between now and 2022, there is enough to contribute more for roads and pay for the expansion.

"This is really not a political problem," said Miller, alluding to the frosty reception to Gibbons' plan among resort operators who say Nevada is overly dependent on hospitality-related taxes. "This is a math problem. And we've just solved the math problem."