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Vegas, baby? Arena envisioned to draw pro team to city

8/22/2007 - NHL NBA

LAS VEGAS -- Casino giant Harrah's Entertainment Inc.
announced Wednesday that it will partner with AEG, the company that
brought David Beckham to the Los Angeles Galaxy, to build a
20,000-seat arena in Las Vegas capable of housing an NBA or NHL
team.

The $500 million arena, behind the Bally's and Paris
hotel-casinos on the Las Vegas Strip, is projected to open in 2010.
It's a step toward attracting a pro sports franchise to a city that
has tried to persuade reluctant league officials to look past its
legalized sports betting.

The deal puts a dent in Mayor Oscar Goodman's plans to have an
arena built downtown with the help of tax breaks, but he said such
plans would go forward. The site for the Harrah's-AEG arena, a
block east of the Strip, is in unincorporated Clark County, outside
city limits.

Gary Loveman, the chief executive of Harrah's, which is being
bought by two private equity firms in a $17.1 billion deal, said
the development was "very much a part of our master plan for Las
Vegas."

Harrah's has yet to fully detail its long-awaited vision to link
or redevelop its nine hotel-casino properties in Las Vegas,
including Caesars Palace, Flamingo, Harrah's and Bally's, which are
near the same intersection.

"It's our ambition to create a place that transcends a series
of hotels," Loveman said. "The presence of a state-of-the-art
events center of this size provides a reason for people all around
us on the Strip to come into our neighborhood."

AEG, a subsidiary of Denver billionaire and Qwest Communications
founder Philip Anschutz's Anschutz Co., owns the Galaxy and the
Staples Center in Los Angeles and has booked such acts as Celine
Dion and Bette Midler at Caesars Palace. It said it was in talks
with professional leagues and potential team owners about bringing
hockey or basketball to Las Vegas.

"It just so happens 2010 is an opportune time for an expansion
team in Vegas for either or both [leagues]," said Timothy Leiweke,
president and chief executive of AEG.

NHL deputy commissioner Bill Daly said the arena announcement
"positively impacts the prospects of Las Vegas attracting a
major-league franchise" but said there was "nothing new to
report" regarding league expansion or the NHL's intentions about a
team in Las Vegas.

"That is a matter our Board of Governors would have to consider
at an appropriate time," he said in a statement.

The NBA, which has appointed a committee to study a proposal by
Goodman to locate a franchise in Las Vegas, postponed meetings
after the league was rocked by a betting scandal involving one of
its referees. The city hosted the NBA All-Star Game in February,
but commissioner David Stern said the league was not likely to
return without a modern arena.

A key factor in the decision for AEG to build on the Harrah's
site was the "200,000 hotel rooms within walking distance,"
Leiweke said. "I don't know any place else like it on the face of
the Earth."

An annual preseason game between the
Los Angeles Kings and the
Colorado Avalanche in Las Vegas usually sells out, and there was
good support for the Las Vegas Wranglers minor league hockey team,
he said.

Even without a sports franchise, the arena will be financially
viable by hosting concerts, boxing matches and other events, and
the likely sale of naming rights, he said. In a recent deal, AEG
sold such rights to what is now the O2 Arena in London to the U.K.
cellular phone company for $12 million a year, he said.

Until now, events such as big boxing matches, mixed martial arts
fights and concerts have largely been held at the aging Thomas &
Mack Center on the UNLV campus or at Strip properties owned by MGM
Mirage Inc., at the MGM Grand Garden Arena or Mandalay Bay Events
Center.

MGM Mirage spokesman Alan Feldman said the company welcomed the
competition.

"The people that come for concerts and conventions, we're
confident they'll visit more than one place on the Strip and we're
confident they'll visit at least one of ours," he said. "Anytime
anyone adds value to the Strip, that's a good thing."

Goodman said the deal does not slow down city plans for a
proposed $9.5 billion sports arena with casino, retail and
residential uses on 85 acres downtown, put forth by Michigan-based
REI Group LLC.

Any team that wants to locate in Las Vegas could now shop
between two large venues for a home, he said.

"With the competition, they're going to be able to get a better
deal," Goodman said. "So it's a win-win."

Jon Weaver, the president of REI, criticized the Harrah's-AEG
plan because it would rely on Strip tourists for its fan base. He
said the downtown site was geared more to residents.

"I think it would be very discouraging have an arena to be
filled by folks from out of town wanting to see their home team
play in Las Vegas," he said. "I don't think that would be a very
successful model."