Swing vote on Vegas MLS deal says she’s joined the “no” camp

If you’ve been staying up nights trying to understand how the latest Las Vegas MLS stadium financing plan works, you can probably stop, because it looks like the entire project just ground to a halt:

A proposed publicly subsidized soccer stadium in downtown Las Vegas appears doomed as Councilwoman Lois Tarkanian, the swing vote on the deal, said Thursday she would vote against the proposed financing plan if the council vote were held today…

“I don’t feel like spending a lot of taxpayer monies on it. People do want a stadium, but they don’t want the use of public money,” Tarkanian said.

There are still two weeks to go before the council’s October 1 vote on whether to kill the soccer plan dead, which means lots of time for proponents to see if they can get Tarkanian to pull a Michelle Spence-Jones and name her price for switching her vote. Given that “use of public money” is an integral part of the plan, though, it seems like Tarkanian has drawn a line in the sand that’s going to be hard to erase. Not impossible to erase, mind you, since it’s local elected officials we’re talking about here, but still I wouldn’t go investing in any Vegas MLS season-ticket futures just now.

New Vegas MLS plan omits $4m/year in double-counted rent, adds $4m/year in new mystery money

The revised AECOM report on a proposed Las Vegas MLS stadium is out! And the answer to how it deals with that mysterious double-counting of $4 million in rent is that it just omits the entire $4 million from operating revenue, which it absolutely should, because it’s not. (It would go to pay the city’s construction debt.)

With the $4 million gone, the projected $1.7-2.8m in net operating income turns into … $2.4-3.5m in net operating income. Whaaaaaaa?

Here are the relevant tables from the original report (above) and revised report (below). Care to play One of These Things Is Not Like the Other?
Screen Shot 2014-09-17 at 9.30.10 PMScreen Shot 2014-09-17 at 9.29.49 PMFirst off, there’s a new $2.7 million a year item called “tenant reimbursement,” which further down is defined as:

We assume that the MLS team will pay a share of the facility’s overall expenses, based on its share of stadium usage (as a percent of total attendance). This line item represents a payment to the stadium from the team, and is assumed to be approximately $2.7 million per year.

I have no frickin’ clue what this is. (Nor do the Las Vegas Review-Journal or Sun, apparently, since neither mentions it in their coverage.) Is the MLS team suddenly agreeing to share more revenue than the $4 million a year in rent plus $500,000 a year in non-soccer revenue that was previously proposed? Would an MLS team make enough profit to afford all this? And if not, would the city have to cover any fees that would otherwise leave the team running losses, as was previously reported? Reply cloudy, ask again later.

All that’s still not enough to turn a profit for the city, though, so AECOM then lops off about $1 million a year in “management fees” (money that the city would pay the MLS team for running the stadium, because why would they run their own stadium for free, jeez?) and $800,000 a year towards a “capital maintenance account” (because why account for future maintenance costs now, when that will just make the numbers look bad).

So either the would-be Vegas MLS team is proposing to increase its contribution by $3.7 million a year (good!) or it’s juggling numbers around randomly to make sure that the economic analysis shows the city coming out ahead (less good!). Tomorrow’s public hearing is going to be some kind of fun.

Vegas officials offer “pep talk” on soccer stadium, no explanation yet for double-counting rent

Last night marked the first “town hall” meeting on Las Vegas’s beleaguered MLS stadium plan, and the economic consultant’s report that was supposed to be reissued by Friday to fix that $4 million a year typo … still is nowhere to be seen. What Vegas residents got instead is what the Las Vegas Review-Journal called a “pep talk” from city officials and soccer boosters about just how great a new stadium would be. Check out how the Las Vegas Sun described it:

City staff along with developer Justin Findlay, managing partner of Findlay Sports and Entertainment, fielded questions. They explained the stadium would be paid for using a combination of city room tax dollars and rent from the soccer team. If the team is successful and stays in the stadium for 30 years, the city’s share of the project costs would shrink to $82 million, 41 percent of the total.

City Manager Betsy Fretwell acknowledged that if the soccer team struggles and has to shut down, the city would be on the hook for the estimated $8 million annual bond payment. She downplayed the chances of that happening and said there would be time to fix problems if the team struggles to draw big enough crowds.

Not to tell Findlay and Fretwell what to do, but “If the team does well we’ll only lose $82 million, and if it does poorly we’ll be on the hook for much more — but don’t worry, we’re sure it’ll all be great!” isn’t much of a pep talk in my book. But there are five more public meetings to go in the next nine days, so they have plenty of time to work on their material.

Meanwhile, the Review-Journal reports that the AECOM consulting report is due to be discussed at today’s city council meeting, so maybe we’ll actually get some answers then about how the consultants managed to double-count the proposed MLS team’s rent, once as arena bond payments, once as city operating revenue. Stay tuned.

Vegas stadium consultant: That $4m a year in MLS revenue was a typo, we’ll fix it

AECOM, the architecture and engineering firm that presented that disputed Las Vegas MLS stadium economic projection, has spoken! Not to the press, but to city officials, and their explanation for why their report appears to have double-counted $4 million a year in rent payments is a doozy:

AECOM explained the problem that [city councilmember Bob] Beers raised by sending a letter to City Manager Betsy Fretwell saying the company mistakenly forwarded portions of a previous draft of the feasibility study to city officials, according to Las Vegas spokesman David Riggleman. Fretwell then informed City Council members of the mistake, he said.

“They blended tables and data from earlier in the process. They will send us the corrected version,” Riggleman said. The city expects the correct feasibility study from AECOM later this week, Riggleman said.

This is pretty incredible: Apparently AECOM is saying that when it included $4 million in annual rent payments as part of the stadium’s benefits, even though it was already committed to pay off the city’s bond payments, that was something copied from the wrong version of the file. You know, the kind of error that anyone could make — the kind that represents almost half of the entire revenue projected from the stadium, and which when corrected would turn a $2 million a year city profit into a $2 million a year city loss. A little oopsie.

(The other possibility, of course, is that AECOM isn’t saying that the $4 million a year is in error, which means they still haven’t explained what it’s doing in there. I can’t wait to do a Compare Documents on the original and corrected versions of this report.)

No word, meanwhile, from the would-be stadium developers, Cordish Cos. and Findlay Sports, that hired AECOM (and in Findlay’s case, that gave a completely different explanation for the mystery of the $4 million yesterday that turned out, apparently, to be complete gibberish). If you’re in Vegas, though, you’re in luck, because starting next Tuesday, Cordish and Findlay representatives will be at a series of town hall meetings to take your questions, which may or may not include “What were you smoking when you decided to hire an engineering firm to draw up an economic impact study?”

  • Tuesday, Sept. 16 at 6:30 p.m. at Centennial Hills Community Center, 6601 N. Buffalo Drive

  • Wednesday, Sept. 17 at 6:30 p.m. at Doolitle Community Center, 1950 N. J. Street

  • Thursday, Sept. 18 at 6:30 p.m. at Rogich Middle School, 235 Pavilion Center Drive

  • Tuesday, Sept. 23 at 6:30 p.m. at Durango Hills Community Center, 3521 N. Durango Drive

  • Wednesday, Sept. 24 at 6:30 p.m. at City Hall Council Chambers, 495 S. Main Street

  • Thursday, Sept. 25 at 6:30 p.m. at the Development Services Center, 333. N. Rancho Drive

For those not in Vegas, there are a bunch of online options, but it doesn’t look like Cordish or Findlay reps will be there:

  • From Sept. 11 through Oct. 1, residents can share their thoughts in an online town hall called Crowd Hall. It will be available at https://crowdhall.com/h/303/

  • Las Vegas City Manager Betsy Fretwell will hold a Twitter chat on Sept. 18, beginning at 4 p.m. Use #stadiumchat to share feedback. Follow Betsy Fretwell on Twitter @BetsyFretwell

  • Las Vegas Mayor Carolyn Goodman will hold a Twitter chat on Sept. 22 at 8 a.m. Use #stadiumchat to share feedback and follow the mayor on Twitter @MayorofLasVegas

  • The city will host a Google Hangout on Sept. 30 at 11 a.m. Use #stadiumhangout to ask questions. Follow the city of Las Vegas on Google+ at google.com/+cityoflasvegas

Vegas MLS developer: We’re not double-counting rent, we’re single-counting imaginary non-soccer revenues

One of the would-be soccer stadium developers in Las Vegas has responded to Las Vegas councilmember Bob Beers’ claim that a report on the proposed stadium double-counted rent payments from the team. According to the Las Vegas Review-Journal:

Justin Findlay, managing partner of Findlay Sports & Entertainment, addressed Beers’ concerns this way: The stadium’s expenses do not include the required $3.5 million in annual rent because it’s the team and not the stadium that will pay the rent.

And the stadium’s annual “rent” revenues of $4.4 million listed in the feasibility study do not include the $3.5 million rent payment to the city because that line item refers to the rent revenue generated from non-soccer games like football games and other events staged at the stadium.

So the roughly $4 million rent in the report isn’t the actual roughly $4 million rent that the team would pay towards construction bonds; it’s the $4 million in “rent” that the city would earn from non-MLS events at the stadium.

Which all makes sense, except that the Review-Journal previously spelled out that $4 million is the total of team rent payments plus non-MLS revenues:

The term sheet said the bonds issued by the city will be repaid from three sources — the private partners paying $3.5 million annually in team rent; the partners contributing annual non-soccer revenue of $500,000 in year one through year 10, and then $1.5 million annually in years 11-30; and the city contributing $3 million a year in room tax revenue distributed to the city from the Las Vegas Convention and Visitors Authority.

Maybe Findlay means that the first $500,000 in non-soccer profits will go to pay off the bonds, and the next $4 million will go toward the city’s operating budget? Except that there’s no reason to believe that non-soccer events will generate $4.5 million a year in profits (or even $500,000, really). Plus the term sheet doesn’t say anything about the team paying anything extra in rent over the first $500,000 a year.

The latest Review-Journal article notes: “This is a developing story. Check back for updates.” I hope answering this question can be one of them.

[UPDATE: At 12:21 pm Vegas time, Alan Snel's Review-Journal article was edited to remove Findlay's quote, presumably because it doesn't make a damn bit of sense. The article now notes that "it’s unclear why the stadium revenues would include the $3.5 million in rent when the proposed stadium deal calls for the $3.5 million in rent to be paid to the city to help pay off the bond debt" and says "the Las Vegas Review-Journal has contacted representatives from the city, Cordish and Findlay for an explanation Tuesday and is waiting for a response."]

Vegas MLS stadium study shows city will do fine if it just double-counts $4m in rent payments

Would-be Las Vegas soccer stadium developers Cordish Cos. and Findlay Sports & Entertainment have released a feasibility study on the proposed $200 million project … several days after the Las Vegas council was set to vote on the plan. (The council ended up putting it off until October.) Also, the study was dated August 20, which raised some eyebrows on the already eyebrow-raised council:

“Cordish didn’t turn it over to us. The question is why didn’t they?” a frustrated [councilmember Bob] Coffin said of the delay…

City spokesman David Riggleman said the feasibility report was dated Aug. 20, but was received by Mayor Carolyn Goodman and the other six council members on Sunday because Cordish spent all that time scrubbing proprietary information.

Port Telles, development director of The Cordish Cos., said he could not comment because of company policy.

I cannot tell you how much I really really hope this becomes a thing: “I’m sorry, officer, I can’t comment on whether I’ve been drinking. Company policy.” “I wish I could tell you whether I saw that video, but I can’t. Company policy.” Quick, somebody start a cat meme.

Anyway, here’s the study itself, and if you don’t feel like reading all 103 pages, here’s councilmember Bob Beers’ analysis of it, which is pretty long itself. The most damning piece of Beers’ analysis is that the report includes $4 million or so in annual rent payments by the team as part of the stadium’s operating budget (resulting in a roughly $2 million a year projected profit) — though those same rent payments are also being earmarked for repaying part of the city’s stadium construction bonds.

The pro-forma proposes to spend the same $4-million per year two times, once (shown on the pro-forma) for operating expense and profit, and a second time (not shown on the pro-forma) for debt repayment.

I’ve emailed Cordish asking what’s what, but I’m guessing I won’t hear back, what with the company policy and all.

Quick notes: Vegas MLS vote postponed, Raiders cost could be higher, Bills’ stadium and “need”

I’m on the road (well, the train) today, so no news updates, but fortunately it looks like a slow news day so far. The big items:

Finally, I have my debut article going up today at The Cauldron, on the Buffalo Bills‘ demands for a new stadium right after getting $200 million in state subsidies for renovations to their old one, and the psychology of “need.” The direct URL wasn’t available as I left the house, but head to the main page and you should find it. Enjoy! Or maybe “enjoy” isn’t the right word

Vegas council to vote today on keeping MLS plan on life support

And speaking of speculative soccer stadium projects, the Las Vegas city council is set to vote today on whether to stick a fork in Cordish Cos.’ $200 million MLS stadium plan, which would require $155 million in city funding which would maybe be paid back by the team or maybe not.

Since a yes vote would only keep the project alive for another three months, normally you’d expect it to sail through, because what’s the skin off the council’s nose? It sounds like there’s actually some opposition, though, that could make the vote of the seven-member council actually interesting: councilmember Bob Beers says he can’t vote for the project because the developers haven’t provided enough information, while his colleague Bob Coffin says after five years, Cordish has been given enough rope. It’ll probably still get passed — cf. above re: skin, rope — but a groundswell this is not.

UNLV president tells board meeting on stadium: Never mind, check back in 2017

The University of Nevada, Las Vegas released a report on Wednesday identifying two possible sites for a new 45,000-seat football stadium, with plans to submit them to a university board meeting yesterday. That was the plan, at least, until the start of the meeting itself, when acting UNLV president Don Snyder did this:

UNLV acting president Don Snyder called an audible Thursday, delaying the proposed $523 million campus stadium project by two years.

Snyder’s move came at a University of Nevada, Las Vegas Stadium Board meeting called to finalize a proposal to send to the Legislature for consideration early next year. Instead, the project will go to state lawmakers in 2017.

He said the university is now working on too many issues, such as creating a medical school, to ask state support for the proposed stadium.

“All these things take time and energy,” Snyder said. “The medical school is the top priority. You don’t have to be a rocket scientist to also know there are other demands in the community like schools and police officers … It’s more important to do this right than to do it fast.”

It’s not clear what led Snyder to put a hold on the stadium talks at the last second, though it’s reasonable enough to assume that he’d taken the temperature of the room and realized that his stadium plan was going nowhere. Now he can sit back and work on the plan for a couple of years behind closed doors, and either drum up more support (and money) for the project, or let it die quietly.

This would also, come to think of it, be an excellent time for the local media to do some research into whether a 45,000-seat football stadium for a low-profile NCAA program makes much sense. But my money’s on everyone going back to sleep until the press releases start flying again.

Las Vegas MLS stadium would cost public 41% of price, or 75%, or 45%, or who knows, really?

The city of Las Vegas has finally released some details on how to fund that MLS stadium for a nonexistent MLS team that Cordish Cos. wants to build because it has an option on some land and doesn’t know what else to do with it. According to that newspaper that just laid off half the sportswriters I know and let them learn about it on Twitter, here’s the scoop:

The stadium would be located in the city of Las Vegas’s downtown Symphony Park area and the total project cost, including interest on bonds, would be $410 million. Sixty-nine percent of that would be privately funded and 31 percent would come from public sources. The statement says that the public funding would mostly come from taxes collected on tourists and from public infrastructure funds.

Okay, that’s a little vague, but at least it spells out the split: 69% private, 31% public, which — wait, what’s that, Las Vegas Review-Journal?

The city of Las Vegas would be responsible for more than $150 million — or more than 75 percent — toward the cost of a $200 million, 24,000-seat soccer stadium in Symphony Park that would be built for a possible Major League Soccer team, according to a term sheet obtained Tuesday by the Las Vegas Review-Journal.

The term sheet contradicts a press release distributed Tuesday by the city and its two private soccer stadium partners, which stated, “59 percent of these (stadium) costs would be privately financed.”

The Review-Journal later goes into more detail, which explains that the $150 million public subsidy isn’t quite that bad: The team would pay about $4 million a year in rent and shares of non-soccer revenue, which would cut the public’s total cost to, let’s call it maybe $90 million. (That “total project cost” of $410 million was apparently bulked up with future interest payments and the cost of acquiring an expansion team in the first place, which is major-league-level chutzpah, at least.) Though there’s also no detail on who would pay operating costs for the stadium, so that $90 million could easily go back up again.

This whole mess will be presented to the city council next week, at which point it will likely proceed to three months of public hearings, with an actual vote slated for around December. In the meantime, we can look at the pretty pictures, which apparently involve a translucent roof and spotlights and all kinds of other stuff that seems unlikely to look that glitzy considering what $200 million typically buys you in a soccer stadium, but let’s ooh and aah anyway:

Oh, and all this is, of course, contingent on Vegas actually getting an MLS team, which is no sure thing given that there’s only one expansion slot left and tons of cities angling to fill it. But I guess if Minnesota is announcing it’s figured out how to divide up the rent from any future MLS team, Las Vegas has to do something to show that it’s ready, too, if only to stay even in the battle of press releases.

[UPDATE: Vegas councilmember Bob Beers writes to point me to his blog, which has a more detailed explanation of the stadium funding plan. In short: The city would put up $41 million in cash (some of it provided from sales taxes redirected, as discussed back in June, from a “Sales Tax Additional Revenue” district, i.e., a STIF), plus $115 million worth of bonds. Those bonds would be repaid via $3 million a year in park maintenance funds, plus $4-5 million a year in payments from the team — which would come out of soccer team profits (if there are any), and would otherwise presumably have to be covered by the city. In other words, we yet again have a scenario where an MLS team could be guaranteed to cover any losses before it would have to start paying for its stadium debt. It's almost like these guys compare notes, you know?]