Unelected board okays $750m-plus Raiders stadium subsidy, democracy maybe to commence soon

The Southern Nevada Tourism Infrastructure Committee yesterday approved spending $750 million in hotel tax dollars on a new stadium for the Oakland Raiders and whoa whoa hold on, take a deep breath and read back to the beginning of the sentence, okay? The SNTIC, despite that official-sounding “committee” in its name, is an unelected body appointed by Nevada’s governor to “explore potential funding mechanisms to support new tourism-related initiatives,” and looks like this:

  • Steve Hill Chairman Executive Director Governor’s Office of Economic Development
  • Len Jessup Vice Chairman President University of Nevada, Las Vegas
  • Carolyn Goodman Mayor City of Las Vegas
  • Steve Sisolak Chairman Clark County Commission
  • Kristin McMillan President and Chief Executive Officer Las Vegas Chamber of Commerce
  • Tom Jenkin Global President Caesars Entertainment
  • Bill Noonan Senior Vice President of Industry and Governmental Affairs Boyd Gaming
  • Bill Hornbuckle President MGM Resorts International
  • Kim Sinatra Executive Vice President, General Counsel and Secretary Wynn Resorts
  • George Markantonis President and Chief Operating Officer of The Venetian and The Palazzo Las Vegas Sands Corporation
  • Mike Sloan Senior Vice President of Government Relations Station Casinos

So, one governor’s aide, the mayor of Las Vegas, the county chair, the president of the university that would get to play at the stadium, the head of the chamber of commerce and six casino executives — including a top exec of Sands, the company that would be getting the $750 million — thought it was a good idea to send this plan to the state legislature. There, exactly none of them will have a vote on actually approving the deal, though Sisolak might get a vote if the state punts it to the county, as is its right if it can’t get a two-thirds majority to pass a stadium bill.

So what, exactly, did these seven business leaders, two appointees, and two elected officials approve? Take it away, Las Vegas Review-Journal:

At a meeting stoked with enthusiasm and a few minor squabbles, the 11-member committee unanimously supported the stadium developers’ preferred funding option, which requires a $750 million public investment, eliminates a 39 percent public contribution cap and allows the private partners to reap all stadium profits during the lifetime of the Raiders’ lease.

And that’s how it was reported by the paper that is owned by Sands owner Sheldon Adelson, mind you. So stark was the SNTIC’s capitulation to every one of Adelson’s demands that even the paper that isn’t allowed to say anything bad about the deal had to shake its collective head in wonderment.

What we know about the stadium proposal: Clark County would raise hotel taxes by 0.88%, and direct the proceeds to paying down $750 million in public stadium construction debt. (The hotel tax hike is projected to be plenty big enough to cover those costs.) Adelson would kick in $650 million, and Raiders owner Mark Davis would provide $500 million, though they would presumably get to offset their costs with naming rights fees and PSL sales and NFL G-4 funds, whereas the county would get none of this money. Another $10.4 million a year (roughly $150 million in present value) in sales tax, live entertainment tax, and business tax from an area around the stadium would get siphoned off by the stadium authority, though the SNTIC’s stadium Powerpoint makes it appear that maybe that money would go toward the same $750 million payment, and not be on top of it.

I’m hedging on that last one because the state-controlled stadium authority could well be stuck with additional costs — future capital improvements to the stadium, say — depending on the ground lease that it agrees to with Adelson. A ground lease, mind you, that hasn’t actually been negotiated yet. This, people, is crazytown, but sadly the kind of crazytown that is all too common in public stadium negotiations, particularly when it’s between the developers that are asking for the money and an unelected body that the developers themselves sit on.

The next step now is for Gov. Brian Sandoval to decide whether to call a special session of the legislature, since Davis would want to apply to the NFL for relocation at its January owners’ meeting, and there’s no regular legislative session scheduled before then. (Why should the Nevada legislature be playing to the NFL’s clock? The two-minute warning, duh.) If he does, which seems likely, then the battles will start over getting the necessary two-thirds vote of the legislature to approve the tax hike — or, if that can’t be arranged, a simple majority vote to punt the deal to the seven-member county commission, which would then have to vote at least 5-2 for the stadium to be approved.

It’s still no sure thing, in other words, but the SNTIC has set the framework for debate, which is no longer “What, if anything, should we offer the Raiders to move to Vegas?” and now instead “Should we give Sheldon Adelson at least $750 million in tax money, and possibly a whole lot more, so the Raiders will move here? Y/N.” Residents of Nevada, if you have an opinion about this, let your state lawmakers know.

UPDATE: Almost forgot to mention the best thing ever in the history of things:

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21 comments on “Unelected board okays $750m-plus Raiders stadium subsidy, democracy maybe to commence soon

  1. I was reading in The Reno Gazette-Joirnal (the newspaper for the OTHER metro area in Nevada) that quoted Mr. Adelson as saying that the public’s benefit would not be from sharing in the profits of the project (of which there will be little, according to him), but rather the increase in tourism to the region. So for all the people who make their travel plans not based on mega resorts, year round nice weather, great restaurants, shopping, or gaming, but solely on whether a region has a football team, well, finally Nevada can be in that race.

    In that same article it stated that Mr. Sandoval (governor) would be willing to call the special session, and that the hundreds of thousands of dollars in direct campaign contributions by Mr Adelson had ABSOLUTELY NOTHING TO DO with his decision. Of course not – we’ve got lots of money here in Nevada.

    Now on that note I must attend the forum they are having at my sons school here to address our serious overcrowding issue and last in the nation. They will likely also beg us to raise our sales tax to raise – you guessed it! – $750,000,000 to build new schools here.

    I don’t mind Mr Sandoval, but man….this would be funny if it weren’t happening to me. Nevadans best chance to save it from itself is if San Diego decides to do something almost as dumb. Vote Yes on Measure C, San Diego!

    1. Whoa! That’s all I have is whoa. I think I’m done here for now. Crazy part is they have people actually thinking that it’s not their tax money, it’s tourist paying for it all. No harm no foul.

    2. Well this is Nevada, the state directly adjacent to the state in which this state aspires to be and is rapidly becoming. Not one single person in this town can answer this one simple question: if this stadium is such a great deal, then as a businessman use your own funds to build it. I’ve asked countless people this and their responses range from “we want football” to “this will take the city to the next level”. No, a diversified economy, an educated populace, and an infusion of culture will take this city to the next level.

      Oh, and by the way, instead of issuing the typical 20 to 30-year bonds, they are going for 33-year bonds (which I didn’t even know existed). Which means after 15 years the bonds will be refinanced and the debt will continue. Plus, eventually there will be an economic downtown (it happens every 15 years or so). What happens then?

    3. Why do I feel the Raiders will end up in Vegas?
      Besides the insanity of it all, I would assume their preference goes as: Vegas #1, LA #2, Oakland #3, St.Louis #4.

    4. Well normally I vacation in Green Bay because of the nearby Indian Casinos, but now that this Las Vegas place all the kids are talking about has a football team, maybe I’ll give it a try.

  2. SiriusXM NFL Radio (an official league organ) hosts love these tidbits of Raiders to Vegas news, they ride ’em for all they’re worth… hours during the season, I know in the offseason there was a crumb of news like this and they cheerleadered (cheerled?) it for days.

  3. I think your first link is broken Neal.

    I can’t find the stomach to sift through the documentation related to the meeting yesterday, but I was struck by this phrase in “Alternative B” of “Decision Point #2” (http://sntic.org/meeting/17/):

    “(c) The construction and development of the NFL stadium project shall be consistent with first class, premier National Football League facilities currently in operation or approved for construction by National Football League.”

    That looks at first glance like it applies only to the construction of the stadium, but that “and development” leaves a lot of wiggle room — is this an attempt at a state-of-the-art clause?

    As an Oakland resident, I’m quite happy that Libby Schaaf is refusing to get involved in a bidding war, but all this seems really awful for Vegas.

  4. “this will take the city to the next level”.

    Yeah. That worked out so well for Phoenix. Or is it Glendale?

  5. It’s incredible that everyone is still assigning major $ to PSL’s and Naming Rights. That’s a bigger pile of horse sh*t than the non-voting committee.

    As a longtime season ticket holder in SD (hold the applause), there is not a snowball chance I’d consider shelling out 20K – 40K per seat to reserve the right to purchase my season tickets. Our seats are on the 50…season ticket holder since 1960’s.

    Look what happened in San Francisco. PSL’s are a huge waste of money for fans.

    Naming rights….pfffft.

    That’s a lost form of effective marketing.

    Bring back the Murph!

  6. I wonder if Oakland has any data on the financial impact of Raiders-related tourism on the local economy?

  7. This does seem to indicate that casino owners are on board. In the fast it was assumed they didn’t want the competition.

  8. The thing is, every time one of these stupid, over-the-top, why would you even think about this?-deals comes along, we come here and list all the great reasons they shouldn’t. And they’re all great reasons. And they shouldn’t happen because the reasons are great.

    And then they happen anyway.

    Mark Davis won’t get a subsidy even half this size in Norcal. Not even 1/3 the size. I think it’s happening.

    This is really the main reason the Kings aren’t in Seattle right now; the NBA found the bigger fool. I think the NFL has found a gigantic fool here, so you know which deal they’ll want. For all these great reasons deals shouldn’t happen, all you really need to make it happen is finding the bigger fool.

    1. The Raiders will get zero construction subsidy anywhere in Northern California, particularly in Oakland. The best they can hope for is free land.

  9. If this goes through, it will be a financial windfall for the Raiders and huge for the NFL. What sports leagues need is one City that is available for another team to move to ( if necessary). With a Raiders move, it will be San Diego or LA ( depending on what happens with the Chargers), plus St Louis.

  10. Biggest winners here are the As and Oakland. The former will get new digs without the raiders and warriors baggage and the latter gets some land to develop.

  11. What’s visible is the fact Nevada politicians are willing to sacrifice what is needed for the state as opposed to what they want. They have no problem straddling the state with future debt for the sake of an NFL team, yet they have problems funding important public needs like education, health care and public safety.

  12. What is really incredible is that people in Vegas are actually OK with the idea that a corrupt casino mogul is greasing the palms of politicians to get this through the Nevada State Legislature.

    1. Most people in Vegas hear “it’s not your tax money” and walk away satisfied. There’s an almost religious zealotry dedicated to the state’s lack of income taxes on individuals and non-gaming businesses. The tourist corridor is largely seen as analogous to a coal mine, the city money-maker that everybody is glad to have but nobody in their right mind would visit.

      So that’s how it works. Who pays for things we refuse to? Watch the planes at the airport sometime and you’ll get your answer. I often refer to the the planes landing and taking off as “money coming in” and “suckers going out”, respectively.

      It’s not totally a tax avoidance utopia (your Amazon purchase will have sales tax almost as high as CA) but it’s close.

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