San Diego paper says to vote no on Chargers subsidy, then negotiate new Chargers subsidy

In a move that’s sort of surprising, sort of not — more on that in a second — the San Diego Union-Tribune editorial board on Friday came out against the Chargers stadium ballot measure:

Could [San Diego Mayor Kevin] Faulconer, [Chargers owner Dean] Spanos and others negotiate a better deal than either measure on the ballot now? Clearly.

To earn our support, that deal must be negotiated with all sides, including hoteliers if it involves hotel taxes, with a specific design so San Diegans know what the venue would actually look like and, of course, with a public financial contribution spelled out and capped.

This board chooses to be optimistic, and it urges San Diegans to reject C and D and send everyone back to the bargaining table.

It’s indeed unusual for a city’s major paper to editorialize against a measure that’s backed by both the mayor and the owners of the local sports team, but this is an unusual ballot measure: The local hotel industry, which would be taxed to pay for the project, is dead-set against it, and even the project’s proponents aren’t holding out much hope that it will win a necessary two-thirds victory. So really, there isn’t too much political risk here for the U-T: It can call a crappy deal a crappy deal, and at worst it might get a few phone calls saying, “Jeez, we know we’re down, did you really have to kick us too?”

If you want to be really conspiracy-minded, you could even see the editorial as a backdoor way for Spanos to come up with a Plan B once the ballot measure loses: If everyone goes back to the negotiating table, that at least gives him a San Diego option to keep from having to slink north to Los Angeles and accept whatever Los Angeles Rams owner Stan Kroenke will offer for the Chargers to be his tenant. This is a long, multi-sided game of chicken being played here, and it’s not yet clear who’s going to go off the cliff. At least it’s not likely to be San Diego taxpayers next month, anyway, so thank goodness for small favors?

Mark Davis: Oakland doesn’t love me, I’m gonna go eat $750m in worms

When you’re a sports team owner trying to get your fellow owners to okay your move to a new city that’s waving a $750 million check in your face, it’s not so bad a strategy to try to burn your bridges with your old city, just in case. And Oakland Raiders owner Mark Davis is clearly a man who knows his way around a can of lighter fluid:

“Oakland was in the driver’s seat if they could’ve put together anything,” Davis said Wednesday at the NFL’s fall meetings, after updating his fellow owners on his desire to relocate to the gambling capital. “They came up with nothing.

“Las Vegas has already done what it is supposed to do and we have to bring it up to the National Football League and get permission to move to Las Vegas.”

Yeah, screw you, Oakland! You didn’t offer Mark Davis a $750 million check, instead only saying you’d pay for maybe $200 million worth of infrastructure! Who wants a measly $200 million, amirite, guys?

(For her part, Oakland Mayor Libby Schaaf issued a statement following Davis’s press conference: “If Oakland is going to be successful in offering the Raiders and the NFL a viable alternative to moving to Las Vegas, I have to stay clearheaded. I cannot afford for us to be thrown off our game because Nevada lawmakers have deemed it appropriate to put $750M in public money towards a private sports facility. While I’m committed to keeping the Raiders, I will not enter into a bidding war with Nevada using public funds.”)

Anyhoo, no NFL owners tipped their hand following the meeting on how they plan to vote — Houston Texans owner Robert McNair said, “These things are still so fluid until they nail everything down we don’t know what we’re looking at. We’ll wait until we have a full package,” which is a really long way of saying “Reply cloudy, ask again later” — so we may well be waiting a few months while everyone hashes out their positions here. (Plus what everyone can agree on as a relocation fee.) Davis has said he plans to have the Raiders play in Oakland the next two seasons anyway, which is going to go oh so well after he just announced he’s moving the team and gave the middle finger to his old city. How is Sports Twitter responding to this?

Wait, what? Mark Davis made his presentation to his fellow owners in a long-sleeved white t-shirt? Maybe how he’s perceived by Oakland fans isn’t this guy’s biggest worry.

NFL decision expected sometime on Raiders, team to play somewhere in interim

Journalism can be a big game of telephone, especially in the social media age, and that’s what appears to be happening with NBC Sports’ Mike Florio’s report yesterday on the NFL’s voting timetable on an Oakland Raiders move to Las Vegas, in which he wrote:

As one source with knowledge of the inner workings of the process told PFT on Sunday, a decision is expected within the next six to nine months.

Okay, that doesn’t tell us much. Except that since Las Vegas officials were counting on a relocation vote at the league owners’ meetings in January, there is now much freaking out:

Yeah, that’s not actually what Florio said at all. The league owners could delay a vote until mid-2017, or they could vote sooner than that. They could demand a sky-high relocation fee, or they could not. All we know right now is that some NFL guy Mike Florio knows doesn’t know what’s going to happen or when, which puts him in the same boat as the rest of us.

In other news, Raiders owner Mark Davis has said he intends to keep the team in Oakland for two more seasons, but also is reportedly looking at playing temporarily at Sam Boyd Stadium in Vegas, and given that he has options to play at the Coliseum the next two seasons but also can opt out of them, this also tells us absolutely nothing. Except that everyone involved seems to be intent on keeping their options — and leverage — open, all of which is to be expected. Except for that “purple monkey dishwasher” remark.

Nevada assembly loses mind, okays $750m to move Raiders to Vegas, bring imaginary tourists

On Friday morning, after a 17-hour session the previous day followed by a morning of behind-the-scenes haggling, the Nevada state assembly voted 28-13 to approve a $750-million-plus package of subsidies for a new Oakland Raiders stadium in Las Vegas. The bill now goes to Gov. Brian Sandoval, who will sign it into law today.

If you can do math, you’ve already noted that that 28-13 margin is the barest margin needed for a two-thirds majority, which is what was required for the state legislature to raise hotel taxes 0.88% to fund the stadium. So what did those swing voters get in exchange for their flip-flop?

The amendment to the bill passed by the Assembly expanded the Stadium Authority Board to nine members from seven, adding another representative from Clark County and one from UNLV. The amendment also defines the rent to be charged to the university to use the stadium to “actual operational or pass-through costs” excluding any fixed costs on game or event days. UNLV also gets three additional event days, for graduations or other events.

So basically, legislators’ price for approving $750 million (at least — more on that in a moment) in taxpayer subsidies for Raiders owner Mark Davis and casino magnate Sheldon Adelson was to give UNLV a marginally better lease and another seat on the stadium board. We’ll likely never know exactly what went on in negotiations — as soon as the assembly session reopened on Friday morning, the question was called and a vote was held with no public debate at all — but it was clearly some of the worst haggling ever: Michelle Spence-Jones, the Miami county commissioner who got more than $100 million in community development money in exchange for approving the Marlins‘ stadium subsidy in 2009, has to be laughing and laughing at her pathetic Nevada counterparts.

The deal was immediately savaged by both the 13 “no” voters (“What you saw today is why people are so cynical about government because the big power players got their way and the real losers are the Nevada taxpayers,” said Republican Ira Hansen; “This deal as presented, SB1, is structured in ways that all other sports subsidies have been structured and they just have not come out in the wash,” added his Democratic colleague Teresa Benitez-Thompson) and sports economists, who universally shook their heads in dismay that Nevada was even considering this level of subsidy. Stanford economist Roger Noll called it the worst deal he’s ever seen, noting that Adelson and Davis are projecting 33% of tickets going to tourists when no other NFL team even manages 10%: “The idea that the thing is going to pay for itself based on a huge inflow of tourists is crazy.” And Smith College economist Andy Zimbalist, who I’ve criticized in the past for changing his opinions depending on who’s paying his fees but who at least knows how math works, gave a cogent explanation of why increased taxes on hotel visitors count as public money:

“The first thing that could happen is because hotel prices go up, individuals and businesses will decided it’s priced itself out of the market and they’ll do their conventions or meetings somewhere else,” he said. “In that case, you actually reduce tourism.”

“The other possibility is tourists don’t care,” Zimbalist continued. “If they’re going to pay $200, they’ll also pay $205 or $210 a night and they’ll come anyway. If that’s true, then you can raise your hotel taxes and raise revenue either to provide additional social services – put it into the schools, put it into the roads, put it into the police – or you could use it to lower taxes. Either way, the hotel tax is a real tax and it taxes people in Las Vegas.”

And, as we’ve been over before, the $750 million in bonds to be repaid out of hotel tax money are not the only public gift being provided to Davis and Adelson. They’ll also be getting the benefit of $899 million in highway improvements that will be fast-tracked because of the stadium — whether they’re all directly stadium-related and not just state transportation department wishlist material is questionable, but it’s been made clear that other Vegas highway projects will be delayed as a result, since the newly sped-up projects will drain the state’s fund of gas tax money — plus possibly future public money for maintenance and operating expenses on the stadium: From what I can tell from the text of the bill, who’ll pay ongoing costs is punted to a lease that hasn’t been written yet, and given that Adelson’s Las Vegas Review-Journal has reported (no source cited) that the public will be on the hook for those items, this could easily add hundreds of millions of dollars more to the final taxpayer bill.

The only people who can save Nevada from this expense now are the other 31 NFL owners, who need to decide whether to turn down the richest subsidy offer in league history, or whether to allow a franchise to move from the nation’s 6th largest TV market to its 40th largest. Or they also have the option of approving the move, but attaching an exorbitant relocation fee to try to get a cut of the boodle for themselves. There are many, many options, and given past evidence that NFL owners make these decisions exactly like you’d expect a bunch of cliquey billionaires to make them, anything is possible, really.

Nevadans shouldn’t get their hopes up too far, though, as even if they don’t end up afflicted with the presence of the Raiders and that $750-million-plus bill, the legislation passed on Friday allows the state to spend $380 million on a new stadium just for UNLV. Because you just know that once fans of rival Mountain West Conference teams hear that UNLV has a new stadium, they’ll decide that it’s finally time to give that Vegas place a try as a vacation spot. It’ll be a win-win!

Vegas stadium could cost public $1.65B with highway upgrades, assembly postpones vote

The Nevada state assembly met yesterday as planned to discuss a $750 million stadium subsidy to bring the Oakland Raiders to Las Vegas — but, not as planned, adjourned for the night after 1 am, following a 17-hour marathon session that didn’t result in the required two-thirds majority for the measure. The unexpected holdup: the emergence of a report by the state transportation department that it would need at least $899 million in highway upgrades to accommodate a new NFL stadium.

After the hearing ended just after 1 a.m., Assembly Majority Leader Paul Anderson, R-Las Vegas, said late news of the report made passage of the stadium proposal more difficult….

Assistant Majority Floor Leader Ira Hansen, R-Sparks, said after 9 p.m. that the bill was just short of the support needed for passage. There were 17 solid yes votes for the plan in the 25-member Republican Assembly caucus, and an estimated 10 votes in the 17-member Democratic caucus, Hansen said. The bill needs 28 votes, a two-thirds supermajority, to pass and advance to Gov. Brian Sandoval’s desk.

Whether the additional $899 million — which would go for adding lanes to I-15 and building new carpool ramps — should be counted as a cost of the stadium project is an issue that the Nevada DOT report attempted to finesse, writing that “since the development of the transportation projects in this area of Las Vegas was already planned, there is no fiscal impact above and beyond what NDOT assumed it would deliver in southern Nevada.” However, the report also noted that the improvements weren’t otherwise scheduled to be completed until between 2020 and 2035, and haven’t yet been funded — and moving them up would require delaying other highway projects.

The assembly is set to meet again this morning, and Anderson, at least, said he was confident he could cobble together enough votes to pass the stadium bill. (If he can’t, the legislature would likely kick the proposal to the Clark County Commission to see if they could approve it instead.) The highway cost revelations seem to have thrown at least a small wrench in the works, though, as they should given the mammoth scale of the costs — another reminder that it’s really important to have a transportation plan in place before you start voting on a stadium deal, okay, people?

Nevada senate passes $750m (or more) Raiders stadium subsidy, ball could move to NFL’s court

That didn’t take long: After a whole one day of testimony, the Nevada state senate voted 16-5 to approve raising hotel taxes to give Sands casino magnate Sheldon Adelson and Oakland Raiders owner Mark Davis $750 million (at least) for building a new stadium in Las Vegas and moving the Raiders there. The measure now goes to the state assembly, which could vote as soon as tomorrow.

The debate, such as it was, went along predictable lines: Major local power brokers, including other casino owners, lined up in favor of the subsidy deal on the grounds that it would be an economic boon; opponents said, wait, are you serious — Stanford economist Roger Noll testifying that the proposed deal was the “worst I’ve ever seen” and called the Raiders’ economic study “deeply flawed” for assuming that one-third of ticket buyers would be tourists who’d spend more than three nights in Las Vegas just to see football, which has never happened anywhere ever; and then the senate went ahead and voted for the bill, because JOBS!!!!1!!.

Sen. Aaron Ford, D-Las Vegas, said he could not face a laborer in need of work knowing “I had a chance to give you a job and I voted no.”

If that’s the bar, then no government expense for anything ever would be rejected, since it’s hard to spend money on anything without creating at least some jobs. Apparently Ford can sleep perfectly well when he considers facing laborers who could be employed by doing something else with that $750 million that might have a better bang for its buck than a football stadium — as the Reno Gazette-Journal’s Jon Ralston notes, Nevada is about to face a $400 million budget deficit that could lead to cuts in mental health, education, and other services. Even if you limited the use of hotel tax dollars to tourism spending (which the legislature doesn’t have to), it would be easy enough to use that to free up other money to spend on education — but then, you wouldn’t have a football stadium, just more schoolteachers, and those aren’t shiny.

Barring an unexpected outbreak of iconoclasm in the assembly, this stadium plan looks likely to pass, which leaves us only to consider exactly how costly it would be to Nevada, and whether it will gain NFL approval. On the first, I still haven’t been able to find any lease details for the Raiders stadium, which would help determine that “at least” way back in the opening sentence: There was one report that “the stadium authority would be responsible for day-to-day operations, including maintenance”; if that means fiscally responsible, that could easily drive the public cost up past $1 billion, taking it from “most expensive NFL subsidy ever” to “holy crap that blows any previous NFL subsidy out of the water.”

As for the NFL, who knows what the other 31 owners, who seem to have no love for Mark Davis, but who have to be excited about someone upping the ante for stadium subsidies, are going to do. Much will likely depend on whether Oakland officials make a counteroffer, or NFL owners think they can be induced to. But as we’ve seen before, the league tends to make these decisions less by weighing hard economic data than by weighing perceived ball size, so your guess is as good as mine.

Vegas needs the NFL or else tourists will go to Dallas, and other Raiders stadium arguments

The Nevada state legislature’s special session to discuss a $750-million-plus stadium subsidy to bring the Oakland Raiders to town kicks off today, which means it’s time for boosters of the plan to pull out all the stops in arguing that this not only is a reasonable amount of money to throw at two rich guys, but an absolute no-brainer. What do you got, stadium proponents?

Sisolak apparently said this back in early September (unless he said it again this weekend, which is possible), but the Las Vegas Review-Journal is reporting it as new news. Which is fine enough, because the notion that Las Vegas needs to be put on the tourist map is hilarious enough that it’s worth repeating as often as possible.

  • Brookings Mountain West (a joint project of the Brookings Institution and UNLV, which would get to use the new stadium for football games) directors Robert Lang and William Brown: “More than 42 million annual visitors also will notice what action Nevada’s leadership takes. Our core economy and the region’s standing as a global tourist and convention destination are in play.”

This seems to be a twist on Sisolak’s remarks, only implying that if Nevada doesn’t spend $750 million on a football stadium, tourists will stop visiting Vegas because they’ll think the state has bad leadership. Still reasonably hilarious!

Okay, starting to sense an agreed-upon message here: Sure, people are flocking to Las Vegas now, but if we don’t have a football stadium, they’ll have no reason not to go to Dallas instead! Why this would suddenly start happening now after decades of Dallas having a football stadium and Vegas not is anyone’s guess, but as “cold Omaha” statements go, it’s a vivid enough image, I suppose.

This is another common on-message point — McMillan makes it as well — so long as you don’t actually do the math on whether increased visitor spending on those things would be worth more than $750 million. (Spoiler: It wouldn’t.)

Anybody else?

This would give the members of my union more jobs while construction was underway — it’s narrow self-interest, but at least it’s true! We have a winner!

Not that any of these arguments are really expected to win the day on the basis of pure logic, economic or otherwise — rather, they’re intended to provide political cover for the state legislators who are going to have to explain in a few days why they approved giving three-quarters of a billion dollars in tax money to a wealthy casino owner and a not-quite-as-wealthy NFL team owner so they could build a stadium for private use. In modern political discourse, you don’t need to actually prove that the emperor has new clothes — you just need to make the case that reasonable people can disagree over the definition of nakedness.

Chargers stadium measure is going to lose, question is only by how much

To win $1.15 billion in public money for a new stadium and convention center expansion, San Diego Chargers owner Dean Spanos needs to have more than two-thirds of ballots cast on election day be in favor of his funding measure — unless he somehow gets an appeals court to not just overturn this summer’s ruling that it will take a supermajority to approve the measure, but make it retroactive that a simple majority will do. Not that it matters, because it doesn’t look likely that the measure is even going to get 50%, let alone 67%:

The survey shows 41 percent of likely voters say they are certain to vote against Measure C and 36 percent say they are certain to vote for it. The remaining 23 percent describe themselves as “not certain.”…

“If there’s some blockbuster development that could alter the course of history, maybe the support group rallies,” said [SurveyUSA president Jay] Leve, whose company conducted the poll. “But even if it does rally, it would be unprecedented and historic in the annals of polling for something that’s trailing 30 days before the election to come back and get a super majority of 67 percent.”

And to add insult to injury, a sizable portion of voters say they’d be considering voting for the measure if the team didn’t suck:

More than half of likely voters said the team’s performance had no effect on their support for Measure C, but 34 percent said it made them less likely to support the measure and only 10 percent said it made them more likely to support it.

There’s still a few weeks to go, but it’s safe to say that we can not only call this vote, but the aftermath: The stadium measure is going to fall far short of a two-thirds majority, Spanos and Mayor Kevin Faulconer will scramble to come up with a way to say that the people who did vote for it represent a mandate to develop a new deal that doesn’t require two-thirds voter approval, and then everyone will stare at their feet a whole lot as they realize that nobody knows how to make $1.15 billion appear out of thin air without raising taxes in some way (and thus requiring a public vote), which is why they were in this mess to begin with.

It’s tough to see any end game at this point that doesn’t involve the Chargers moving to Inglewood, unless maybe Spanos decides he’d rather be top dog in San Diego than second fiddle in L.A. and decides to put more of his own money into a new (or renovated?) stadium, or just decides to stick around and wait things out until maybe his team starts winning games and voters decide this is a reason to throw more money at him. I wouldn’t bet big money on it, but stranger things have happened.

Chargers “study” finds that spending money causes money to be spent, calls this success

The San Diego Chargers announced yesterday that a study by two local economists found that construction of their “convadium” plan, which would cost $1.15 billion in public money, would “increase regional output by a total of $2.1 billion, increase labor income by more than $800 million, and will have a value-added impact of $1.2 billion.” The study was paid for by the Chargers, but its authors insist (according to the Chargers) that they had “complete freedom to do our research over the summer months and to come to whatever conclusions we believed were warranted.”

Okay, so with at least one eyebrow raised, let’s click on that “Read a complete copy of the economic impact study” link, and we find … oh, look it’s a whole 13 pages of report! Two of which are renderings of the convadium, and the rest of which are, from what I can tell, just the result of plugging the cost of building the convadium into the Commerce Department’s RIMS II formula, and reading the numbers that were spit out. Nice work if you can get it!

A bit of explanation: RIMS II is mostly a set of multipliers, which take a certain kind of spending — construction, in this case, then operations of a football stadium after that — and tell you how much of an effect that’s ultimately likely to have as the money filters out into the local economy. So it could tell you that if a company spent another $1 million on hiring, that would increase to, say, $1.5 million worth of impact as those new hires went out and spent their paychecks at local stores, which would hire new employees in turn, etc.

What RIMS doesn’t tell you is what would happen if you didn’t spend the money. In this case, the city would still have a 4% lower hotel tax rate, which would presumably boost hotel stays somewhat by making San Diego more competitive against other places to go on vacation — or, if you want to look at it another way, the city would have the option of raising hotel taxes 4% to spend on something else that could then be plugged into the RIMS model. RIMS also can’t tell you what would happen to Chargers fan spending if the team were to leave (would they all drive up the coast to see them in L.A.? buy more Padres tickets instead? spend it on big-screen TVs?), so you’re comparing apples to a box of oranges that you haven’t even opened to count yet.

In short: Studies like these are almost entirely worthless for telling you whether a project is worth doing. Developers love RIMS II and its ilk, though, because if you put big enough numbers into them, they’ll spit out even bigger numbers, and big numbers look good! In the end, though, all it says is that if the public spends a billion dollars on a new football stadium and convention center expansion, that’s a billion dollars that somebody else will earn. You don’t need an advanced degree in economics to figure that out — though it sure helps when you’re trying to get hired to write a 13-page report that a sports developer can tout on its website.

Howie Long argues for Raiders subsidy with metaphor about SATs, doesn’t know how SATs work

With the Nevada legislature preparing to kick off its special session to consider a $750-million-plus subsidy for a stadium to lure the Oakland Raiders to Las Vegas, boosters of the plan have launched a PR onslaught involving, well:

  • A new name for the group of business and political leaders endorsing the deal: the Win Win Nevada Coalition, presumably because spending three-quarters of a billion dollars on a private NFL stadium would be a “win-win” (which really should have a hyphen), or because Nevada gambling is all about winning (even though most gamblers lose), or because something about one of these.
  • Former Raiders star Howie Long, who knows something about leaving Oakland in search of more money, having done so with the Raiders when the team moved to Los Angeles after his rookie season. Long explained at a rally the logic of moving the Raiders to Vegas: “If I’ve said it once, I’ve said it 14 times since I’ve landed. To me, this is a no-brainer. This is like a trick SAT question: ‘Spell cat,’ and I’m saying, ‘Where’s the trick here? Where’s the problem?’” None of which means anything, but I’m especially intrigued by the idea of an SAT question asking for the spelling of “cat,” since the SAT is a written test, so test takers would be reading and … you get the picture. (Unless you’re Howie Long, I guess.)
  • A column in would-be stadium subsidy recipient Sheldon Adelson’s Las Vegas Review-Journal that acknowledges that there are lots of legitimate questions to be asked about the stadium deal, but this could be the only opportunity to throw this much money at the Raiders, so “pumping the brakes isn’t an option.”

No, the level of political debate in the U.S. is not good at all. Added to the statements by the anti-stadium side last week, it’s clear that we’ve entered into the “see who can shout louder in hopes that the legislature will listen to them” phase of the discourse, and while you can hope for one side or the other to prevail, watching it unfold is going to be ugly regardless.