LVCVA to sell $500M in bonds for convention center expansion

Atrium -- A design rendering, released April 10, 2018, showing how the Las Vegas Convention Center District Phase Two Expansion is expected to look on completion, provided by tvsdesign / Design Las Vegas.

Aerial overall -- A design rendering, released April 10, 2018, showing how the Las Vegas Convention Center District Phase Two Expansion is expected to look on completion, provided by tvsdesign / Design Las Vegas

Attracting more international visitors to Las Vegas is always high on the Las Vegas Convention and Visitors Authority’s to-do list.

On Tuesday, the LVCVA’s board of directors took two big strides in that direction.

Board members unanimously approved the second portion of a $900 million bond sale in support of the Las Vegas Convention Center expansion project that is nearing a late 2018 startup.

The vote authorized the sale of $500 million in revenue bonds that are expected to be sold by the end of this year or early 2019.

The board also approved spending $2.39 million in each of the 2019 and 2020 fiscal years for 12 offices that represent Las Vegas in 19 countries and regions on three continents.

Expanding the convention center is part of the LVCVA’s strategy to stay competitive in the global meetings and trade-show industry.

$400 million in bonds

The board already authorized $400 million in bond sales in February and Clark County has issued $200 million of them with an average interest rate of 3.9 percent, according to LVCVA Chief Financial Officer Ed Finger.

The LVCVA is on track to determine a guaranteed maximum price for the project by fall.

The Las Vegas Convention Center District plan allows for $860 million plus a 5 percent contingency — a total of $903 million — to be spent for the Phase 2 expansion portion of the project. A renovation project for four existing exhibition halls will begin in 2021 after the completion of the new 600,000-square-foot hall planned at the northwest corner of Paradise Road and Convention Center Drive.

Bonds are being supported by a 0.5-percentage-point increase in Clark County’s hotel room tax authorized in the Nevada Legislature’s passage of Senate Bill 1 in 2016.

The cost of the bond issuance, which will be paid from bond proceeds, is estimated at $1.75 million.

The LVCVA board also approved a series of two-year international representative office contract renewals.

Representative offices are responsible for supporting direct and nonstop air service to Las Vegas, growing visitor volume to the United States and maximizing Las Vegas’ share, among other services with varying needs by country.

Big decline in foreign visitors

International tourism volume to Las Vegas fell last year compared to the year before.

The LVCVA estimates 16 percent of the 42.2 million visitors to Las Vegas in 2017 were international visitors, a 20 percent decline from the all-time high 8.1 million who arrived in 2016.

Chief marketing officer Cathy Tull said there are multiple reasons why international visitor volume was off last year, including the fact that the U.S. doesn’t have a system in place to accurately count visitors to cities. She noted that many arrivals to Las Vegas come in through other gateways and aren’t counted as an international arrival because they use domestic air carriers from those gateway cities to Las Vegas.

She said she believes Las Vegas’ visitation from foreign countries is off proportionately to overall visitation to the United States.

In addition to imprecise accounting of visitors, Tull cited foreign currency conversions that have reduced value for visitors from some countries and catastrophic events worldwide that have kept potential visitors at home.

She also said the jury is still out on whether the political climate surrounding the immigration debate and banning travel from some countries is having an effect on travel to the U.S.

Las Vegas also has re-examined its expectations on visitation from India because of the lack of convenient connecting flights to McCarran International Airport.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.