An article in Friday’s Las Vegas Sun revealed a few more details about the tax-increment financing plan that Sheldon Adelson, Mark Davis, and Majestic Realty have floated for a possible Oakland Raiders stadium in Vegas:
“We build a billion-four project, bring (an NFL) team, it now generates a substantial amount of incremental tax revenue … and so we would take that increment that we created by our investment there,” [Majestic Executive Vice President Craig] Cavileer said in an interview. “Without that increment, you would not be successful in your investment.”…
The district could theoretically include property taxes, live entertainment taxes paid on tickets at stadium concerts, sales taxes from merchandise sales and so on.
Details of the proposed tax district are still unclear, however, including exactly which taxes would be involved. But Guy Hobbs, managing director of Hobbs, Ong & Associates, said the district would likely not encompass any revenues that weren’t directly incidental to the stadium itself.
Hobbs, who sits on the infrastructure panel’s technical advisory committee, said tax increment revenue could flow into a pool of money that would also include funds from operating the stadium. All of that could be used to pay the stadium expenses, he said, and any remaining revenue could be used to help provide a financial return to Sands and Majestic.
Let’s break that down a bit: First off, “directly incidental to the stadium itself” is a strange way of putting it, but presumably means it would only involve taxes actually paid on the stadium site. (What about at a steakhouse built next door to the stadium as part of the same project? Neither Cavileer nor Hobbs said.) Sales tax increment financing isn’t actually legal in Nevada, according to Greg LeRoy of Good Jobs First, or at least hasn’t been used there previously, so that could be a tough lift, and sales tax would be by far the largest piece of any TIF district. And paying stadium expenses with tax money would be, of course, a subsidy in exactly the same way that paying for construction costs would be, since this would be a privately run stadium where the private companies involved got all the stadium revenues — which you’d think would be enough to provide their “financial return,” but maybe they’re saying this is such a horrible stadium deal that it can’t turn a profit without $750 million in cash subsidies plus hundreds of millions more in TIF money? Stop with the hard sell, guys!
Hobbs suggested that any TIF numbers should be “stress tested” to make sure the money involved doesn’t get to a point “where it’s perceived to be — or is — too high,” since “otherwise, you could have these unbridled returns, and I don’t think anybody is interested in that.” No, I have no idea how much additional tax money kicked back to a billionaire who’s already getting $750 million in tax money qualifies as “unbridled,” and I’m sure Hobbs doesn’t either, but this appears to be a way of setting up an argument that hey, sure, we’re kicking back taxes on hot dog sales, but not as much as we could have, okay? I’m sticking with the quote that I gave the Sun for the same article: ““The question for me is not whether this is a bad deal for Nevada — it’s how bad of a deal.”