Grand Sierra Resort to seek $97m in public financing for expansion project
The resort plans to build a $400m sports arena.
Key Points
- Grand Sierra first unveiled its $1bn expansion project in 2023
- However, funding was not discussed in detail at that time
Grand Sierra is quietly pursuing public financing for its basketball area project, according to a local report in the Nevada Independent.
The resort has been working on a $1bn expansion project for the past 18 months, according to the local report. However, when Alex Meruelo unveiled the plans, which included a $400m sports arena, not much was said regarding how the project would be funded until now.
Through tax increment financing (TIF), Grand Sierra is requesting $97m in public money from the City Reno, the local report said.
As a public funding mechanism, TIFs freeze property taxes in a specific area and divert the property tax revenue from the new project back to the developer. The diverted funds pay for construction costs.
The funding could generate nearly 10% of the arena’s total cost. This money could also fund other developmental aspects of the project, including non-gaming enhancements and a new hotel tower.
However, a coalition of operators who oppose the funding proposal said Grand Sierra’s plans are not a proper use of TIF money and recently sent a letter to the Reno City Council.
The group’s attorney, Joshua Hicks, wrote in a letter, “[Grand Sierra Resort] is clearly willing and able to pay the up-front construction costs.
“It seems clear that the [Grand Sierra] intends to use TIF not for construction costs, but instead to offset ongoing operational costs. We do not believe this is an appropriate use of TIF under Nevada law.”
Hicks is with McDonald Carano, the firm representing the coalition.
Meruelo provided the Nevada Independent with a recent statement and said his company has “put forward a proposal that places all of the risk on the [Grand Sierra], which is why it’s surprising the other local gaming operators are opposing this transformational development.”
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