The Las Vegas City Council on Wednesday picked Michigan-based REI Neon LLC group over three competitors to build a long-sought arena that officials hope will become home to pro basketball and hockey teams.

Mayor Oscar Goodman, one of the biggest backers of attracting a pro sports franchise to the city, has in recent years endorsed other proposals for civic arenas larger and newer than the Thomas & Mack center at the University of Nevada, Las Vegas.

Goodman said the agreement with REI Neon aimed to set deadlines for unresolved issues including proof of financing, land purchases, specifics about project phases and timelines for construction.

REI Neon representative Todd Fink said an arena could be built by the fall of 2011.

Plans called for an Aug. 1 City Council vote on a preliminary agreement between Las Vegas and REI Neon, followed by a 60-day negotiating period for a final agreement.

REI Neon is teaming on the project with Warburg Pincus Joint Venture, a private equity firm. Officials said the group has assembled the rights to purchase the 85 acres for the project from numerous owners.

The developer would be required to post a $1 million deposit with the city once a development agreement is executed. Officials say tax rebates are expected to be part of a final agreement.

City Councilman Gary Reese, whose ward would include the wedge-shaped project north of the Stratosphere hotel-casino and tower, called the proposed development a connector between the Las Vegas Strip, downtown and the city's 61-acre Union Park development.

"This is one of the biggest steps I've been involved in since I came to City Hall," he said.

A first phase is expected to feature a $500 million arena and surrounding retail development between Main Street, Charleston Boulevard and the Union Pacific railroad tracks. Later phases would radiate out from the arena, adding casinos and thousands of hotel rooms and condominiums.

George Postolos, former chief executive of the Houston Rockets of the National Basketball Association and special assistant to league Commissioner David Stern in the late 1990s, is working with REI Neon. He said representatives of the developer planned to meet with NBA executives on Friday.

Postolos told the Las Vegas Review-Journal the project might need property tax rebates and bonds against future sales tax revenue.

The project already has drawn some opposition.

On Wednesday, a state board will hear a challenge to the council's decision last month to allow gambling as part of the project.

Chuck Gardner, a lawyer representing a resident in the area, said REI Neon had not provided clear and convincing justification for expanding the gambling district.

The powerful Culinary Union also has challenged the project.