City of Henderson explains $60m hockey arena subsidy by releasing cloud of random numbers

One of the sports arena projects still moving ahead despite the uncertain future of both sports and arenas is the minor-league hockey arena in Henderson, Nevada, which had $60 million in public bonds approved last month, though official approval of the project itself is still a ways off. So the Henderson city government is still hard at work justifying its expense, and yesterday they came up with a doozy:

City of Henderson says new arena would create 106% return on investment in first year

“The economic output of the Event Center will, directly and indirectly, enhance sales tax in the area, and the City will benefit from taxes related to construction of the new venue,” said Jim McIntosh, Chief Financial Officer…

The analysis outlined the City of Henderson would benefit $40.9 million over 20 years in projected savings and tax revenue.

In addition, the one-year return for the proposed center was projected at 106.57 percent based on the matching investment from the Vegas Golden Knights.

That is some impressive math salad! Spending $60 million in public money would create $40.9 million over 20 years in savings (on maintaining the amphitheater currently on the site) and new tax revenue, which would amount to a 106.75% return in one year! No need for 3 News Las Vegas to question that, or to provide a link to the actual report!

Coverage in the Las Vegas Review-Journal wasn’t much more illuminating, though it did provide two different uninstructive numbers: the arena would “generate a projected economic output of about $17 million to $26 million” (per year? does this account for any spending just siphoned off from other local businesses?) and “could sustain 89 to 122 jobs” (full-time equivalent or part-time?). And I can’t find anything on the City of Henderson website, or on the site of the analytics company that conducted the study, so your guess is as good as mine as to what it all means. Other than “People are griping about us spending $60 million in tax money on a private sports arena in the midst of a global pandemic, somebody come up with some numbers to throw at them, stat! No, I don’t care if they add up, you think journalists have time to find a calculator and check them? This isn’t 2010, people!”

Share this post:

5 comments on “City of Henderson explains $60m hockey arena subsidy by releasing cloud of random numbers

  1. $ numbers are meaningless in this post-truth world we live in now.

    Just look at my new tattoo: “The tax cuts will pay for themselves”.

  2. Isn’t it even worse for Las Vegas though, since the entire town is built on people visiting, unlike say New York or Kansas City. The main industry, tourism is shutdown and no signs of recovery in 2020 even if the state “opens.”

    The Raiders and Golden Knights business plans both depend on lots of out of towners buying tickets, which likely won’t happen until 2022 at the earliest.

    1. 2021 is the earliest a vaccine could be available. You can say 2022 is more likely but you can’t say earliest.

  3. …because the new building won’t need any maintenance at all, of course…

    Claims that the cost of maintaining almost anything make it more economic to build a new one are pretty much always lies (unless you are talking about a vintage collector car or piece of art, in which case the value of the artwork means that a new reproduction is pointless).

    People often like to say this about their cars. “Time to upgrade, the maintenance costs on the ’74 Vega are killing me! And it’s a gas hog”.

    Yet you will never save enough on maintenance and fuel to justify a new vehicle of the same type/class (over 200,000 miles, you will save 2,000 gallons of fuel by upgrading from a vehicle that gets 20mpg to one that gets 25mpg). It’s what people tell themselves when they just want something new but can’t find any economic basis for buying it.

    If you just want something new, that’s fine. But don’t try to justify it using bogus math.

  4. I live around the corner from this proposed stadium and no one asked me if I agreed with this project. Wait until our pty taxes go up because this stadium is considered an improvement. Is Henderson going to help pay the retirees increased taxes.

Comments are closed.