Harrah’s Entertainment announced a joint venture with AEG to build a $500 million arena behind its Bally’s and Paris Strip casinos.

The 20,000-seat arena will be built on 10 acres of land Harrah’s owns a block east of the Strip. Both companies will finance the project, with AEG developing, building and managing the arena for Harrah’s.

“I’m 100 percent for being in a position where taxpayers are not at risk,” AEG Chief Executive Officer and President Tim Leiweke said. “Harrah’s presented us with the best opportunity.”

Both companies said they have the funding necessary to build the development without relying on the credit market.

“We have never announced a deal and not built,” Leiweke said at a press conference announcing the project held at Bally’s. “We’ll save our bluffing for the tables downstairs.”

Clark County Commission Chairman Rory Reid praised both companies and the development. He expressed pleasure that the project is being built without burdening the county’s taxpayers, and the fact that a new arena will help the city keep its status as a leading entertainment destination.

“Las Vegas has always been able to compete as the entertainment mecca of the world,” Reid said. “To continue, we need a new and superior arena.”

Harrah’s CEO Gary Loveman said the arena is one component of the company’s master plan for Las Vegas.

“It’s our ambition to create a place that transcends a series of hotels,” he 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.”

Officials plan to break ground for the project in June and open the arena by September 2010.

The arena will be built to National Basketball Association and National Hockey League standards in the hopes of attracting one of those league’s franchises. While no team has committed to Las Vegas, AEG officials said they’ve had talks with a group interested in bring an NHL team to the city.

The announcement comes shortly after city officials announced a deal for a $10.5 billion development in Downtown Las Vegas that would also feature a professional-grade arena, as well as a casino component. That project, being developed by Michigan-based REI Neon/Warburg Pincus, is still a go.

By Casino Connection Staff

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