Vegas MLS stadium plan includes $28.6m shortfall, another $60m in dubious revenue projections

The developers hoping to build a soccer stadium in Las Vegas have released a two-page term sheet outlining how the finances would work. According to the Las Vegas Sun, the split would be 74% public, 26% private, but city officials say once negotiations are finished it would be closer to 50/50.

It’s good that Vegas city officials are admitting that negotiations aren’t done, because man, is that one mess of a term sheet. As I noted in the Sun article, the stadium operating agreement gets just one line — “further legal review is needed” — which means that there’s no way to tell who will get revenues from naming rights and other stadium revenue streams, nor who will pay annual operating costs of the arena. As I also noted to the Sun’s reporter, but it didn’t make the published story, the plan includes $4.3 million a year in proceeds from “non-MLS events” — a figure that even the term sheet acknowledges is “on the aggressive (high) side” and which is probably downright crazy given the number of 20,000-seat venues already scattered around Las Vegas or in the works. And there’s no backup plan for what would fill that gap — which would cover about a third of the costs of the $200 million stadium — if the non-MLS profits don’t materialize.

Add in that there’s already a $28.6 million funding gap that needs to be filled, and this is not the most ironclad stadium financing plan ever seen. Hopefully there will be more actual numbers before the city council is set to take its first vote on the plan on August 20.

UNLV stadium board member: Big ol’ sales tax hike would foot stadium bill nicely

When the University of Nevada-Las Vegas proposed building a $900 million football stadium back in February, school president Don Snyder said he would “look creatively” for ways to fund it. “Creatively,” it now appears, means asking for county-wide sales and hotel tax hikes:

A UNLV stadium board member, Regent James Dean Leavitt, proposed Wednesday that the Clark County sales tax and the lodging room tax be increased slightly to help pay for an on-campus domed stadium of 50,000-55,000 seats.

Leavitt said University of Nevada, Las Vegas students should also pay a suggested $100 toward a “perpetual fund” for major university projects such as a stadium or medical school.

Raising the county sales tax by 0.25% would generate an estimated $79 million a year in new revenues, while a room tax surcharge of 1% would generate $44 million a year; since $900 million in bonds would cost something like $60 million a year to pay off, this would certainly cover the bill. As to why Clark County would want to do such a thing, presumably Leavitt believes that stadium consultant’s nonsense about $500 million a year in economic impact from a new stadium, even though the actual operating profit is estimated to be just $13.9 million a year — or way, way less than the stadium bonds would cost to pay off.

Anyway, plenty of other members of the stadium board are opposed to one or the other of the tax hikes, so this will probably now enter the haggling stage for the time being. But with the board set to make recommendations to the state legislature by the end of September, it’s fair to say that we can see what direction this thing is heading in.

Las Vegas soccer stadium developer says he knows a guy who says he can get an MLS team

Justin Findlay, the guy who is working with Cordish Companies to build an MLS stadium in Las Vegas so that Cordish can keep its expiring option on downtown land open, says that he can so totally get an MLS franchise for Vegas if he only gets a stadium. How does he know? The MLS deputy commissioner totally winked at him:

He was encouraged after entertaining MLS Deputy Commissioner Mark Abbott this week in Las Vegas. Abbott met with Las Vegas Mayor Carolyn Goodman and other city officials, toured downtown and got a sense of how MLS would work in Las Vegas.

Although league officials won’t comment on expansion possibilities, you can argue the MLS brass wouldn’t have traveled to Las Vegas if it wasn’t in serious consideration.

“Hearing right from the horse’s mouth, this is really a possibility,” Findlay said. “We just have to convert on our plan. There are no reasons why these big, big dreams can’t happen.”

On the one hand, MLS brass are likely fine with touring pretty much anyplace that’s potentially going to build them a stadium, because why not? (It’s also not like anyone ever passes up a business junket to Vegas.) On the other, MLS is clearly willing to throw teams at pretty much any city with a stadium, and with only one more franchise left to be assigned in the league’s planned expansion through 2020, might as well get the bidding war heating up. Worse comes to worst, if you have too many cities (and owners) offering to throw money at you, there’s nothing stopping you from expanding beyond 24 teams — or maybe seeing if David Beckham would like to settle in Vegas instead.

Cowboys/Yankees-owned consultants project giant impact for UNLV stadium, because of course they do

Last week was pretty busy, so let’s check if we missed any stadium news items in all the excitement over giant impaled light switches and whether the Oakland A’s will be evicted. Okay, here we go:

Study: New UNLV stadium could pack $511 million economic punch

I should just get right back in bed, shouldn’t I? But let’s soldier on:

The study is by Conventions, Sports and Leisure International, a subsidiary of Legends Hospitality, which in turn is jointly owned by the Dallas Cowboys and New York Yankees. (Legends was set up to run concessions at their new stadiums.) CSL is also UNLV’s paid consultant on how to get a stadium built, which would seem an unprecedented conflict of interest, except that they just did pretty much the same thing for the Los Angeles Angels.

If all that doesn’t give you qualms — and it clearly doesn’t bother the Las Vegas Sun, as they never bother to mention any of these facts in their article — we can proceed to the projections, which are that an open-air stadium hosting an estimated 27 events per year would have a $231 million annual direct economic impact, whereas a domed stadium would have a $511 million annual impact. And tack on about another 50% for indirect economic impact as well.

There are a number of ways to properly convey the insanity of these figures. We could, for example, look at the stadiums projected 50,000-seat capacity and do some simple division to determine that each and every event-goer would have to spend an average of $171, mostly at games of a college football team that is currently giving tickets away for free, in order to generate that crazy money. (It’d be $378 per person in a domed stadium.) Or we could wonder how many people would really visit Las Vegas just to see a UNLV game (or stadium concert or soccer match or whatever else this place would host) as opposed to those already in tow because it’s Las Vegas who would take in a game while there. Or we could compare CSL’s figures with this handy quote from an article today in the Wisconsin Reporter on the Milwaukee Bucks arena plans:

Major League Baseball reports Miller Park generates an estimated annual economic impact of $355.7 million. Nearly 60 percent of Miller Park attendees travel from outside the metropolitan area and spend $327.3 million a year, the MLB report says.

Milwaukee Area Technical College economic instructor Michael Rosen thinks those numbers are largely exaggerated.

“This is almost double the most successful stadium, Camden Yards in Baltimore, where less than a third of the crowd at every game came from outside the area and the net gain to Baltimore’s economy was roughly $3 million a year,”  Rosen said in an opinion piece published in the Milwaukee Journal Sentinel.  “Not much of a return on a $200 million stadium investment and not close to $327 million.”

The important thing to remember here is that “economic impact” numbers are garbage: All they measure is the total number of dollars changing hands in your city, which, as Holy Cross sports economist Victor Matheson memorably put it, could be like “an airplane landing at an airport and everyone gets out and gives each other a million bucks, then gets back on the plane. That’s $200 million in economic activity, but it’s not any benefit to the local economy.”

What you want are actual revenue numbers, and CSL already gave us those last month, when it determined (through lord knows what kind of math) that a UNLV stadium would turn a $13.9 million a year operating profit, which would barely be enough to pay off a quarter of the construction cost. There would, no doubt, be some new tax revenues as well — after you filter out the people who’d be in Vegas regardless — but it’s clear we’re looking at a much smaller figure than $511 million at this point.

Still, that’s the headline that the Las Vegas Sun chose to go with. Guess they were afraid of falling behind in the local stupid article competition.

Las Vegas council votes to create TIF district for soccer stadium, has no clue what it would cost

TIFs! The Cordish Companies’ Las Vegas soccer stadium plan has got TIFs!

The first baby step of creating a tourism improvement district on the 59 acres downtown at Symphony Park was approved with scant discussion by the Las Vegas City Council on Wednesday.

If a proposed soccer arena goes nowhere, so does the district.

If the arena goes forward, then the district would shift existing sales and use taxes which go to the state and retain them in the local improvement district, explained Bill Arent, director of the Economic and Urban Development Department.

How much the district would collect in sales and use taxes, nobody’s saying, nor what it would do with the money. The Las Vegas Review-Journal notes, “Without specifics, there was little discussion by council members about the tourism district creation.” But they still voted for it, because there’s always time to ask questions later, right?

UNLV stadium would turn $14m annual profit, if you ignore how to find $714m to build it

Anybody want to read a stupid article? Sure you do! Here, let’s start with the headline:

UNLV stadium could generate up to $13.9 million in profits, report says

As a refresher, that’s the domed college football stadium that University of Nevada–Las Vegas wants to build, and wow, that would be a pretty impressive profit for a stadium costing several hundred million dollars at a school whose football team can’t win games or draw flies. How would it manage that, exactly?

An enclosed stadium would create $23.1 million to $26.3 million in total annual income, while total expenses to operate the retractable-roof or domed venue would be $11 million to $12.4 million, according to the draft prepared by Dallas-based consultant CSL.

Meanwhile, an open-air stadium would generate $15.9 million to $18.1 million in total annual income, while expenses would be $8.9 million to $9.9 million, according to the report.

So, wait, it would just generate $13.9 million in operating profits, then? In other words, not counting the cost of building the damn thing in the first place? How much would that be, anyway?

The consultant also tweaked the proposed costs for the retractable roof stadium, ratcheting it up to $714 million from a previous projected cost of $682 million.

The last previous projected cost I recorded was $900 million, but no matter: Either way, we’re talking about close to $50 million a year in debt payments, which would eat up that $13.9 million in profits and then rampage across the university’s budget like you know who. Unless, of course, the university finds a way to fob off the construction costs on somebody else, which is just what UNLV is trying and so far failing to do.

Anyway, surely this stupid article somewhere mentions that the stadium would need to be paid for, which overall would leave it awash in red ink, right?

“It’s nice to see that the (proposed UNLV) stadium is in the black.” said [stadium board member Kirk] Hendrick, chief legal officer for Ultimate Fighting Championship, the Las Vegas-based MMA fight show and promotion company. “Otherwise, it would be a short conversation.”

Stupid article.

What hasn’t anybody proposed building in Vegas yet? Soccer stadium? Soccer stadium it is!

If you thought that Las Vegas already had more stadium and arena plans than you could shake a stick at, well, you’d better go get yourself a better stick. To not shake. At stadiums.

Anyway: The Cordish Companies, who you may remember from their dubious downtown Vegas arena plan, (as well as their dubious dress codes at their sports-themed mall restaurants) yesterday announced plans to build a 24,000-seat downtown stadium for a pro soccer team. Which doesn’t exist yet, but sure, Las Vegas, why the hell not? Justin Findlay, managing partner of Findlay Sports and Entertainment, Cordish’s partner in this little exercise, told the Las Vegas Sun that Vegas is competing with Austin, Minneapolis, Sacramento, San Antonio, and San Diego for the final expansion franchise to get MLS to 24 teams by 2020, so building a stadium for a team with a maybe one in six chance of existing is only five-sixths crazy, right?

As for how to pay for it, the Sun reports:

Findlay officials said the investment in the stadium and team would be in excess of $300 million and was expected to create more than 1,000 construction and permanent jobs. Funding would be a private-public split but, Findlay said, it’s too early to put a number how much the city would be asked to contribute.

An MLS expansion team would probably cost around $70 million (what Atlanta Falcons owner Arthur Blank paid for his last year), though with so many cities fighting for presumably one spot, MLS could always decide to bid that up some. That’d leave $200 million and change to build the stadium, which might be possible with $100 million or less in public money, depending on how pricey a stadium they want, how much land costs are, etc. Cordish’s arena plan was to put in $151 million while the city put in $239 million, so I’d be surprised if they went with a much better split for this project, but it’d be a pleasant surprise.

UNLV to “look creatively” for ways to get someone else to pay for its domed football stadium

Have you ever bought anything really expensive that you want but don’t absolutely need, like a car or a house or a Death Star? In my experience, it goes something like this: 1) Figure out what you can afford; 2) Look at what’s available for sale; 3) Cry; 4) Adjust your expectations accordingly; 5) Either buy something within your budget, or decide to just scrap the entire idea and treat yourself to a nice meal instead.

This is, apparently, not how things go in the stadium world, as evidenced by the University of Nevada–Las Vegas’s 11-member stadium panel:

It’s one thing to draft a plan to build a stadium of 45,000 or more seats that could be covered, or at least equipped with a sophisticated shading system like the shading technology at Baylor’s new football stadium.

That’s the easy part for the 11 members, who include executives representing five of the six biggest gaming companies in Las Vegas.

It’s quite another thing to find public dollars to pay for the venue that Snyder said is pivotal to UNLV’s aspirations…

The panel’s consultant, Bill Rhoda, principal of CSL International, didn’t have great news for the board on the funding front, noting there are limited public-money options at the local level.

And he doubted that any high rollers would be willing to cough up millions of dollars in suite and seat rights.

“It’s not going to be easy to raise $200 million in seat rights,” Rhoda told the Review-Journal after the 2½-hour meeting.

Yes indeed, it’s hard to find $900 million for a 60,000-seat domed college football stadium for a program that has had a winning record once in the last 13 years and resorted to giving away tickets for free to get people to go to its last home opener. You might even wonder if the benefits will be worth the cost — but that’s not how big thinkers operate:

“We have to look creatively,” said stadium board Chairman Don Snyder, UNLV’s acting president. … No longer was Snyder rolling out his pet phrase of “game changer” to describe the stadium wish. Now, he’s using another phrase — “thinking outside the box” — to describe what it will take to pay for the proposed venue.

At least UNLV is a public university, unlike some schools demanding state dollars to build domed football stadiums. And I’m sure UNLV doesn’t have anything else it could use the money for … oh.

UNLV partners with former opponents in attempt to revive stadium plan

The story so far: The University of Nevada-Las Vegas partnered with developers Majestic Realty on a proposal for a new domed 40,000-seat football stadium, which soon turned into an $800 million, 60,000-seat domed football stadium, which then became $900 million at which point casino owner MGM Resorts International (which was going to face a levy to help pay for the stadium) announced its opposition to the plan, and then UNLV, realizing who held the cards in their town, dropped Majestic like a hot rock. So what’s the plan now?

UNLV officials on Monday launched their attempt at building Stadium 2.0 with their new strategy firmly in place — a partnership between the University of Nevada, Las Vegas and the Las Vegas casino-hotel industry.

If you can’t beat ‘em, deal ‘em in.

The Las Vegas Review-Journal notes that the new partnership’s stadium board “is months away from determining many variables — how many seats the stadium should hold, whether it should be covered or not, how much the cost estimate will be and potential funding.” Also, that Assembly Speaker Marilyn Kirkpatrick told the panel that because Vegas already gets lots of tourists on weekends, any new stadium needs to be “an economic driver from Tuesday to Thursday.” College football stadium that draws people to town in the middle of the week — what could possibly go wrong with that?

Majestic proposes its own $770m UNLV stadium plan, because Vegas

Sad that we no longer have the crazy Seattle-Sacramento bidding war over the Kings to provide us with daily entertainment? Fear not, for there’s still the utter insanity that is Las Vegas and its umpteen stadium plans for teams that may or may not ever exist. Or rather, make that umpteen plus one:

Just two months after UNLV dumped Majestic Realty as a partner in a new stadium, Majestic is pushing an alternative that would bypass the university and instead partner with the state itself.

Craig Cavileer, Majestic’s point-man on the project, said his company will commit $385 million toward the $770 million project. In recent weeks he has been quietly lobbying lawmakers and Gov. Brian Sandoval, seeking support for a $1.50 per trip taxi fee in the Las Vegas area that would pay the state’s half of construction costs.

This article is accompanied by renderings of the proposed Majestic stadium, which seems to include the superstructure for a retractable roof of some kind, though given that it’s not even clear where the drawings came from, it’s probably best not to take them too seriously at the moment.

The Las Vegas Sun raves that the Majestic plan would be cheaper than UNLV’s plan ($770 million vs. $800-900 million), simpler (because all the money would come from Majestic and the state of Nevada, as opposed to UNLV, the Las Vegas Convention and Visitors Authority and local casinos), and “fair” (because Majestic and the state would evenly split costs and profits, though it’s not entirely clear how “profits” would be determined). On the down side, state assembly leaders hate the idea, with majority leader William Horne saying that “trying to float such an endeavor at this late hour with a $1.50 cab ride fee in there has almost zero chance of happening” and calling the Majestic plan “sour grapes because they are not part of the project anymore.” Plus UNLV doesn’t want to do it.

Still, total lack of support has never been a reason for Vegas to back off of stadium plans before, so why start now? At least now we can all look forward to months and months of posturing by the two competing stadium proposals, if we’re lucky. Because when you’re talking about spending almost a billion dollars on a college football stadium, really the most important question is “Which developer should we provide with state money to help build it?”