Two Way Hard Three | Las Vegas Casino & Design Blog

March 4, 2011

SIMPSON ON VEGAS #016: Giant Wheels of Fun

Posted by Hunter

You've always wanted a ferris wheel in Vegas, right? Well, Jeff's gonna be sitting right next to you on that first go-round. How about a stadium? He's got that covered too.

He's back with SIMPSON ON VEGAS #16. Enjoy.

I'm going to tackle two subjects in this column and first up are the recent news stories about plans to build observation wheels as the centerpiece of new entertainment zones on the Strip. Caesars Entertainment announced its plans to borrow $400 million to finish its mothballed (except for some pool villas) Octavius Tower at Caesars Palace and to build its long-delayed entertainment zone in and around the space now occupied by O'Sheas and the alley that separates its casino from the Flamingo. And a separate group received Clark County approval for plans to build an observation wheel-anchored amusement park on a Strip-front site opposite Mandalay Bay.

Clearly Las Vegas doesn't need two giant observation wheels, but one would be a nice addition to the city's attractions. I've written before about the need for dramatic, free attractions (like the Bellagio fountains) to spur additional visitation, but no one is likely to build one soon. An observation wheel (with a reasonable $15 to $30 price) would afford a good look at the incredible energy on the Strip, closer than the views available from the observation deck on the Stratosphere, and I think it would be a very popular attraction.
The Caesars plan calls for a lot of retail, dining and entertainment outlets along with its wheel; the South Strip plan calls for additional amusement rides as well as retail offerings.

Will either developer actually build their wheels? The owners of the southern site have previously announced plans for their site that didn't come to fruition -- but then again, so has Caesars. (Where's its arena? Or the wheel that was supposed to go behind the Rio?) Other developers have announced then abandoned wheel plans next to Planet Hollywood and on the old Wet 'n Wild site.

I think the Caesars plan is the most likely to come to fruition, but clearly it is no sure thing. I'd bet against the South Strip developers' plan, especially if Caesars is able to sell the debt to build its wheel. It would be good for Las Vegas and good for Caesars Entertainment if the company can finally deliver an observation wheel to the Strip.

Observation wheels aren't the only big structures that have been promised for Las Vegas but yet to be delivered. A new arena is something that Las Vegas needs much more than a wheel -- to keep big events like the National Finals Rodeo and major boxing and MMA matches, to lure an NBA or NHL team and to give UNLV's Running Rebels a modern place to play. Plans have been announced for arenas before, and there are again several new plans. A big arena and retail center to be built by Silverton owner and Staples Center developer Ed Roski at the western edge of UNLV's campus is one plan (supported by the school) while another developer wants to build a $1.6 billion, three-facility complex with an arena, a football stadium and a baseball ballpark at the western edge of downtown Las Vegas.

Caesars Entertainment hasn't abandoned -- just delayed -- its own plan to build an arena behind its casinos on the east side of the Strip, while three other apparently dormant arena plans have been proposed near the current Las Vegas City Hall, just south of the Sahara and at the far southern end of Las Vegas Boulevard, south of the South Point. There are a couple of points I'd like to make about the arena issue:

• MGM Resorts International has arenas at MGM Grand and Mandalay Bay -- the best facilities now on the Strip -- and will tenaciously fight a publicly funded arena -- especially if it is close to the Strip and even more if it will be part-owned by Caesars Entertainment.

• The market needs a new arena to keep NFR and to host other big events, so sensible operators would support private arena development plans -- unless they compete with their own arena plans (Caesars).

• The stadium, ballpark and arena plan proposed for downtown is not going to happen. Sometimes plans are just plain ridiculous and yet they get treated like they are serious proposals. That's the case with this idea.

• I'm not convinced any of the arenas are plausible until the economy improves significantly, particularly in terms of the availability of credit. I'd be surprised if Nevada voters would approve a sales tax hike or tax-increment financing -- if it gets to a vote -- for the Caesars arena plan (the current state budget mess and MGM's certain opposition will be a strong one-two opposing punch).

• If an arena is built and the best Las Vegas can get is an NHL team, I hope the owner has very deep pockets. The city would support an NFL team, but that's just not going to happen. An NBA team is the best of the likely possibilities, while a hockey team is the worst. I don't think the city will support a hockey team for long. I'd love a major league baseball team, but summers in Las Vegas would mandate an indoor stadium. I think losing our Triple A minor league team is more likely than landing a MLB team. As for a soccer team, MLS would be a decent addition, but it is major league in name only.

-- Jeff Simpson, March 2011


Read archived comments (11 so far)
March 4, 2011 4:31 PM Posted by parchedearth

The Ferris wheel across f/ MB is nothing more than a traveling state fair which can be dismantled as quickly as it is set up. (The proposal is for a small wheel to eventually be replaced with a bigger one) On a positive note, Vegas won't be left with an eyesore as the fair can simply pack-up and move when things don't pan out.

Caesars $400M bond offering is probably not enough to build their wheel (in addition to completing Octavius), but it might cover rennovation of O'Sheas and a few shops in the alley next to the new Margaritaville casino.

The UNLV arena seems like the most likely option (from a financing standpoint). Caesars doesn't have the money, but needs it the most to compete with MGM. Downtown is a nonstarter. IMO, the best option is for MGM to upgrade one of their existing arenas (probably MB) into a full-size NBA facility w/ luxury boxes et al... Unfortunately, any arena not on the strip or connected with a major property is going to struggle.

March 4, 2011 8:41 PM Posted by ooo000

The arena logic you are using reminds me of the now multi decade charade to "replace" the Metrodome in Minneapolis. The Vikings want to build a nearly billion dollar stadium with likely 700 million in public funds. Proponents say we need it to to attract a Super Bowl and other unspecified "big events." Unless part time pretzel stand cashiers are now considered a strong tax base, I don't see the logic in public money to keep any short term event (including 8-10 football games a year) in any city. If a private developer can pay for it all themselves then more power to them, but I just don't see the logic in public funding. Yea, it be great to keep the NFR around, but at what long term cost to taxpayers? I highly doubt the payoff in keeping a few events in town offsets the long term costs to taxpayers.

March 6, 2011 10:24 AM Posted by detroit1051

I've refrained from commenting until now because I'm afraid I'm becoming a cynical grouch. However, I agree with Parchedearth. The proposal for the South Strip is a traveling carnival show akin to a state fair.

After I read the Clark County Zoning description, I'm convinced this project will never get off the ground. The site is only 9.6 acres and will include the wheel, a 21,000 sq ft "convention center" which will be a fabric tent and 139,000 sq ft of retail/restaurant space. Further, the developer has requested a 69% variance to parking space requirements, down from the required 925 spaces to 285.

The location, at the far end of the Strip will mean there will be less pedestrian traffic and more dependence on cars which would have to park across the Strip at MB. This project sounds like a bad dream which will never be built.

On the other hand, although I'm not a fan of honky-tonk tourist gimmicks like the observation wheel and more low-end retail/food establishments, Harrah's center-Strip location is the best place for an observation wheel and, imo, could be a successful tourist attraction. Will either of these projects be built?

Here's the link to Zoning Board for the South Strip proposal:

March 6, 2011 5:08 PM Posted by Jeff Simpson

detroit 1051 is right, in my opinion, that the Howard Bulloch-owned, South Strip amusement park development "will never get off the ground." As I wrote, "I'd bet against the South Strip developers' plan," meaning I'd bet against the big, 500-foot observation wheel ever being built on the site.

parchedearth and detroit 1051 are also right, in my opinion, in humorously describing the South Strip proposal as akin to a state fair. It wouldn't surprise me if the site owners set up some carnival rides and other amusements as a place-holder for the real estate, but it also wouldn't surprise me if they do nothing at all with the site until they can sell it.

As for ooo000's arguments against public funding for big sports venues, I'd say that each venue, situation and city deserves its own analysis. The current state of the economy and the broke state and local governments in Las Vegas certainly make it tough to justify straight public spending on stadium and arena venues, but tax increment financing, using increases in (property and/or sales) tax revenue that follow significant investment, are more acceptable. In Las Vegas' case, NFR has been a godsend to the resort economy. Before NFR came and grew, a much higher percentage of resort workers were laid off after Thanksgiving as the month of December (until NYE) was a dead period. NFR doesn't fill the city, but it comes close enough to keep many more people working. Occasional big sports events that could be held in a new venue, like major fights (boxing and MMA), also provide a significant boost to the city's economy, raising hotel demand, increasing occupancy and rates and generating more gaming, F&B and other revenue. The tourism sector is important enough to the overall LV economy that I think it is worth some public financing (with TIF favored over direct expenditures) to keep the city competitive when it comes to drawing and keeping NFR and important fights.

March 6, 2011 9:21 PM Posted by Jeff in OKC

Based on our experience in Oklahoma City I am completely in favor of taxpayer financing. About 20 years ago, while in the depths of the oil bust and Savings & Loan meltdown, we were spurned by United Airlines in our attempts to give us a new maintenance facility they were building. Big deal, several humdred jobs. Our offer was financially better, but the company didn't like our "quality of life". Specifically schoools, entertainment and things they could show out of town execs from other companies and governments. Our city leaders cooked up a plan to take a 1 cent sales tax for 4 or 5 years (don't remember for sure) and improve the city. Beautification projects like a canal downtown, a new baseball park and a new arena to replace our aging 30 year old arena (which wasn't good enough for the NFR anymore). I voted against it. I thought it was a bad idea to burden us while our economy was the worst in America and we shouldn't be building things for some pie-in-the-sky "major league" entertainment & sports. I must note I am a major sports fan and understand the businesss end of sports quite well.
Boy, was I wrong! The tax passed. We paid as we went and built the canal, which helped jump start the downtown revival. The baseball park made our triple-A team enjoyable again and the arena, although built on the cheap at $85 million, was big enough to let us get the big acts that would always bypass us and only play Dallas in the past. The Rolling Stones, Paul McCartney, etc. Suddenly we were getting everything but the stadium shows right here at home.
Luckily, and it was luck for us, the Hornets got flooded out of New Orleans after Katrina. We had a 19,000 seat arena, which poured Pepsi and we had Cox Cable, the same as New Orleans. We also had a civic leader who had been largest shareholder in the San Antonio Spurs during part of the 1990s and was the representing member to the NBA board of governors. People that NBA Commisioner David Stern could call and get a deal done in days. OKC wasn't where the NBA was looking. Kansas City, Saint Louis and Las Vegas were better at first blush, but each had fatal flaws.
OKC it was and we did our part. We went ape shit for the Hornets. Sold out the games and screamed like college kids. Saved team owner George Shinn's bacon, again. Top 10 in attendance for both years they were here. Better than they ever did in New Orleans. We moved to the top of the list for relocation. When Howard Schultz couldn't get a new arena in Seattle, he wanted out and our local leaders had 100% of the money to buy him out. When Seattle still wouldn't pay for a new arena, the team came to OKC and we had the Thunder. Luckily, we have good and healthy players and have become the darlings of the NBA ,which has allowed attendance to be strong.
The arena, IMO was a huge part of our improvement. A major sports franchise might be a subsidy for billionaires, but it does wonders for a cities reputation in the competitive circles of big business and big money. Our image is enhanced by the Thunder and pays off more than the cost, I think.
The upshot of all this is that now I live in one of the "Top 10 Cities in America", or "10 Most Recession Proof Cities in America", or "Most Affordable City in America". Local oil companies stay here in stead of moving to Houston when they get big. Outside CEOs come visit and pay attention. It's the same town, we've just spent 20 years investing in ourselves and dressing up the town. "Quality of life" is seen as much better. Our city looks good and is seen as a place on the move. Going in the right direction. Combine the good fortune of a good Thunder team with the demanded success of the OU football team (which is in a suburb of OKC) and we are discussed on ESPN 10 months of the year. More than our size deserves, IMO.
I think the Las Vegas arena should be in Symphony Park, but not the wacky, Milam proposal.. The downtown is the best location for enhancing a cities image and Las Vegas needs the image of maturity it will bring. A major sports team will have to be the anchor tenant in order to succeed and that can't happen on the UNLV campus. I also wonder if Mr. Roski has deep enough pockets and desire to build the UNLV arena if his proposal to build the NFL stadium in downtown Los Angeles is approved. That is expected to cost $3 plus, I recall hearing and should be incredibly difficult to complete.
Oklahoma City has nothing on Las Vegas. Nothing. Not more educated people, Not better schools, or weather, or dirvesified economy. What we did, and do, is invest in ourselves by taxing ourselves, in order to make our city a better place. It has paid off and continues to gain momentum. It is time for Las Vegas to believe in it's future and make the investment. With their own money. It pays like a slot machine, IMO.
Kinda embarassed here. I think my comment is longer than the column. Sorry.

March 7, 2011 12:27 PM Posted by Jeff Simpson

Good stuff, Jeff in OKC.
I think a lot of folks resent the fact that wealthy team owners and sports leagues benefit from taxpayer-subsidized arenas and stadiums, and I understand that. Others simply resent the importance society places on sports and bristle at the idea of their tax dollars going to a sports venue.

But your hometown example is a good one. Major-league sports gives a city legitimacy in the eyes of many -- some of whom make business-moving or start-up decisions. Of course OKC benefited from luck, and I think Las Vegas will have to get lucky as well to get a team in a good league. But Las Vegas will not get lucky without a venue.

I'm not sure whether a downtown arena site is imperative. A downtown arena would clearly be best for downtown, but a Strip-side arena (like Caesars Ent. proposes with AEG) has its own upsides, especially proximity to the 200k - 300k visitors who will attend NFR, boxing/MMA matches and might also want to attend a major-league game. I'm not sure our community's vested interests will come to an agreement on a preferred site -- it will probably come down to which developer/development site can line up money and a potential franchise.

March 7, 2011 3:10 PM Posted by David McKee

Invest in ourselves? Jeff (in OKC, that is), Nevadans, would rather amputate their own limbs *sans* anesthesia, sorta like James Franco in "127 Hours."

Regarding my former abode, Minneapolis, what are they smoking up there? Minneapolis hasn't hosted a Super Bowl since 1992 and, even if a new stadium is built, is it worth it for one "Big Game" every 20 years or so?

Finally, poor Howard Bulloch. He's been trying to redevelop that low-rise land across from MBay since time immemorial and had precious little to show for it. But he keeps trying, God bless him.

March 8, 2011 9:28 AM Posted by jinx

Great article as usual and some great comments. Jeff makes some great points on OKC and it's definitely a model more cities could use.

I will say I agree with Jeff S's assessment of sports possibilities. The NFL is a definitive no, MLB with their anti trust protection loathes moving teams, the Expos being an exception and given they were Canadian based there wasn't a lot of grief for it.

I do think LV ends up with an NHL franchise. The NHL is the one league that ultimately needs new cities, as competing against the big three is trouble for them, new markets to build in seems their best bet. Although I'm not sure it will be successful and whether Nevadans will take to it. Even here in Columbus, while there is a base for the NHL, it struggles against college football and basketball even for the common fan.

The NBA would be a good fit, but outside of the Maloofs I just can't seen anyone willingly moving their team to Las Vegas, and it appears the Maloofs are destined for Anaheim anyway. I think overall the NBA would be the best bet (of the sports they could get), but I think the All Star Game did the exact opposite to the perception of what Las Vegas could be for a city to support a team. In the end, that might be the worst result of the All Star game fallout.

March 8, 2011 9:00 PM Posted by Jeff in OKC

I don't think the Maloofs will be able to move the Kings to Anaheim. I think Lakers owner Jerry Buss and Clippers owner Donald Sterling don't want to share their SoCal market and have enough power within the league to block the move. Although I don't think Sterling is particularly respected, he is one of the longest tenured owners in the league, as is Buss.
NBA Commissioner David Stern has said repeatedly that the NBA has very good success when they are the only team in a not so big city. Portland, Salt Lake City, San Antonio, Orlando and Oklahoma City are great examples of this. Las Vegas is in position to be another. Thomas and Mack would work as a stopgap for 2 or 3 years if the new arena was being built. Not planned, but shovel turning. The biggest obstacle, IMO, would be a need for deep pocketed, committed local ownership. The Maloofs could still be major partners, but people such as the Greenspuns, Boyds, Gaughans and Wynns, etc. would have to participate. The San Antonio and OKC ownership template is the strongest; pillars of the community. "We own the town and we own the team". I think the Kings, Hornets and Grizzlies are real possibilities. I think the Warriors, Raptors, Pistons, Bobcats and Hawks shouldn't be overlooked. I think the only city with a better chance of getting one of these teams is Kansas City; they have an arena built and a need for a tenant. The inability of the Royals to compete in baseball in their small market reflects negatively on their NBA chances.
I think the Las Vegas Arena should be built downtown in order to create a sense that it is for Las Vegans, not tourists. Although it will need to be used for a great many visitor driven events ( such as the NFR), a major sports franchise brings locals to the arena 45 times a year, creating a sense of community. Because I can't imagine anyone going to Orlando in order to catch a Magic game, I don't think people will go to Las Vegas planning to see the 21s in action.

March 30, 2011 3:58 PM Posted by mike_ch

I realize this column is old and so my response isn't likely to net a bunch of replies, but as a hockey fan (go Sharks!) allow me to post a small defence of hockey:

The NHL has, under current leadership, moved a bunch of Canadian and northeast teams into the south. Canadians will pretty much never forgive commish Gary Bettman for this. They've been met with mixed reaction. The Carolina Hurricanes, formerly the Hartford Whalers, have done pretty good attendance-wise. And contrary to ornery Canadians saying that southern states will never enjoy hockey, the Dallas Stars have some of the most consistently packed arenas.

However, the team that hasn't taken off is the Phoenix Coyotes, formerly Winnipeg Jets. For the past 18 months now the team has been at the heart of court cases, buyout attempts, and all sorts of government and private finangling as the NHL tries to keep the team there and find an owner willing to commit to the Phoenix market, and outside ventures try to move it elsewhere (including the founder of Blackberry trying to move it to his own backyard.)

It's pretty well known that Bettman wanted a Las Vegas team, and hockey fans and Canadians in particular talk about a Vegas team (usually titled "The Las Vegas Losers" or something similar) as the ultimate indignity on the sport. Just search for 'Vegas' on and you'll see what I mean. Any Vegas franchise will be immediate villains for most of the NHL's fanbase, and will probably carve out a niche as the team many fans of other western teams irrationally hate and want to see lose/fail. It's nothing new, Anaheim also sort of faced this during the Disney years.

But, what nobody asks is why hockey works in North Carolina and Dallas TX but not in Phoenix. The thing is, Phoenix has a very good football team (went to the Super Bowl just two years ago), a baseball team with some World Series victories under it's belt, and the Suns isn't a top team but it's up there enough to be a viable business. Phoenix sports fans simply have too many well established teams to choose from already.

I can't find it, but there's a map of hockey fandom by regions (i.e. which teams are most popular in most regions) and I seem to remember seeing that Vegas is a mix of the San Jose Sharks (woo!), Anaheim Ducks, LA Kings, and Colorado Avalanche. No one team has any significant advantage over the others. It's pretty appropriate for a city where most of it's residents aren't really "from here."

Basketball, on the other hand, Vegas is annexed into Lakers territory. No doubt about it. We have so many Los Angeles transplants and we get LA's regional sports networks that won't stop slobbering over the Lakers. Even The Mirage was selling Lakers gear for a time.

I think a Vegas hockey team has a much better chance at establishing an identity compared to a Vegas basketball team, because Vegas simply is full of Lakers fans already and simply having a team close-by isn't going to change that. What you'll find is the the Las Vegas Ballers only ever sell out when they're facing the LA Lakers, and the other nights are much more quiet.

April 2, 2011 5:54 PM Posted by Jeff Simpson

mike_ch, sorry for the delay in responding to your post; I missed it at first.
First, I don't want anyone to think I said that the NHL would be the worst of the major sports leagues for the first LV major league franchise because I don't like hockey. I love watching hockey in person and HDTV has improved the televised game. I went to many Tampa Bay Lightning games before I moved to LV in 1999 and would definitely be a fan of an NHL team in Las Vegas. It's just that I think the other major league sports would be better received.
You make some interesting points, mike_ch, about fans and their rooting interests. I agree about Las Vegas and its affection for the Lakers. Their long-term success as the NBA's second-best all-time franchise (and recent best franchise) has a lot to do with it.
Your suggestion that Las Vegas fans would stay Laker fans if the city got an NBA team is true, I'm sure, for some fans. But not all, and maybe not for most. This isn't a city with an insane amount of civic pride, but it was there when UNLV won the NCAA hoops title two decades ago.
I guess the gap between NBA and NHL interest is great enough that I think there would still be enough Las Vegans to root for the LV Ballers, particularly if they become a good team (Las Vegas is a front-running town that doesn't like losers).
As for Phoenix, it does have teams in all four sports, but it is a much bigger city than Las Vegas. The Cardinals have had a brief bit of success (luckily making the Super Bowl two years ago before their best player, QB Kurt Warner, retired) but now are mediocre again. The other teams have had some success, especially in baseball. The Coyotes failure is what troubles me about prospects for a Las Vegas hockey team. I'm not sure the Coyotes problem is because of competition from other sports -- it probably is more about the failure to win a lot and the relative unpopularity of hockey.
I guess I disagree that a city only has so much capacity for sports and that Phoenix's NHL problem is its other three teams in the other major sports. I think the problem is likely a bad team in the least popular sport. Sure, a city is likely to rally around its first major league sports franchise, and that may boost an NHL team's prospects in Las Vegas, but my point is that the other sports would be better. The biggest issues, I think (aside from NFL football, which should succeed in almost any big city) is how popular the sport is and how good the team is. Las Vegas probably would support a winning hockey team, but I think it would better support a winning MLB or, even better, NBA team.
The NHL teams you mentioned in the West (Sharks, Ducks, Kings, Avalanche) are all in much bigger metropolitan areas than Las Vegas is and I think that the city's size and the relative unpopularity of hockey (compared with basketball) would be big disadvantages. A basketball team would still have the market-size disadvantage, of course, but I think the relative popularity of the game would more than compensate for the residual effect of having a lot of Laker fans in the market.
In a nutshell, the popularity advantage of NBA hoops would more than offset a NHL hockey team's advantage of having fans with no strong existing NHL allegiances.
It is possible that a winning NHL franchise would do better than a bad NBA team, but I think it is highly likely that a winning NBA team would do better than a winning OR losing NHL team.
You did make some interesting points and, if Las Vegas does get an NHL team first, I hope you are right and that my worries are off-base. I do think an NHL team is probably the most likely first-team-in-Vegas scenario, so let's hope you are right.