Adelson exec: We don’t know site or cost for Vegas Raiders stadium, also tax money isn’t tax money

The Associated Press has a report out today that indicates that there are a few things about that $1.4 billion Las Vegas stadium for the Oakland Raiders that proponents Sheldon Adelson and Mark Davis might not have gotten precisely correct. Like, for starters, it may now cost $1.6 billion, because nobody remembered to include land costs. And about that land: They’re not actually sure where it will be:

[Las Vegas Sands executive Robert] Goldstein, who presented the stadium plan, made it clear that if a University of Nevada, Las Vegas, campus site is deemed to be too close to McCarran International Airport, project planners will need to quickly find another 40 acres.

Somebody unknown being on the hook to pay an unknown price for an unknown 40 acres of land in an unknown location is pretty alarming for a stadium deal that Adelson’s Sands Corp. is trying to get approved this year (“come January, if we’re not real, this has all been fun, but a waste of time,” said Goldstein). But, incredibly, that’s not the most alarming thing that Goldstein said yesterday:

As proposed, $750 million in public funding would come from a slice of hotel room tax revenues, or about $50 million per year. Commissioners were told that would add a little more than $1 per night to the average tourist’s hotel room bill.

Goldstein insisted it wasn’t taxpayer money.

The AP doesn’t provide an actual quote from Goldstein, so I don’t know whether he’s arguing that hotel taxes don’t affect Vegas residents because they’re only paid by out-of-towners (in which case he’s wrong) or that they’re not really taxes because they come out of hotel owners’ revenues (in which case he’s also wrong). But “insisting that tax money isn’t taxpayer money” is a great first step in any candidacy for the Chutzpah Hall of Fame.

Also, if anybody at the Southern Nevada Tourism Infrastructure Committee hearing asked about the TIF district that would kick back property (and sales?) taxes from inside (and around?) the stadium, wherever it ends up going, that didn’t make it into the AP article. So the total public cost still needs to be described as “at least $750 million, and possibly a heck of a lot more.” This is totally something the Nevada legislature should vote on as soon as possible, without asking more questions, because that always works out just great.

NFL gives three Super Bowls to cities with new stadiums, implies, “Keep ’em coming”

The NFL awarded the 2019, 2020, and 2021 Super Bowls to Atlanta, Miami, and Los Angeles yesterday, continuing its policy of using the big game as a reward to cities and teams with new or significantly renovated stadiums. Or as Rams owner Stan Kroenke said following the decision, “I think they are telling the communities and the owners who stick their necks out that it’s worthwhile.”

The most important target of the announcement, then, isn’t the three cities that will now get the questionable benefit of hosting the NFL’s annual week-long road show, but those that are being wooed with that dubious carrot. Right now most of the reporting is on how New Orleans and Tampa Bay were snubbed because their stadiums aren’t as shiny as the cities that got the nod, but it’ll be interesting to see how this plays into future coverage of stadium campaigns — already, San Diego Union Tribune chief Chargers stadium cheerleader Kevin Acee has written that the possibility of getting a Super Bowl shouldn’t be the reason to vote for a new stadium, but really he means that you should vote for a new stadium regardless, so all remains right with the world.

Interestingly, there’s no reporting yet that I can see out of Las Vegas on the Super Bowl decision, but that may be because they’re too busy covering yesterday’s conflicting comments on a potential Oakland Raiders move from owner Mark Davis (“This is the real deal. If Las Vegas can come through, we’re going to be there”) and NFL commissioner Roger Goodell (“It’s very premature at this point. Until we have more information, it’s pure speculation”). This could be just everyone playing their role — in terms of using Vegas as leverage in hopes of drumming up stadium subsidies from Oakland, Davis is bad cop, Goodell is good cop — or it could be a sign of deeper rifts among league owners over whether Davis should get to bolt from a bigger market to a smaller one in exchange for a lucrative (to him) stadium deal, and on what terms. We won’t know for sure until the next ESPN postmortem, I expect.

Falcons lower food prices at new stadium from completely insane to only mildly overpriced

The Atlanta Falcons owners have announced that when they open their new stadium next year, ticket prices may go up but concession prices will come down:

On what team officials are calling a “fan-first menu,” a number of items will be priced at $2: soft drinks (with unlimited free refills at self-serve stations), Dasani bottled water, hot dogs, pretzels and popcorn.

Also part of the plan: Pizza slices, nachos, waffle fries and bags of peanuts will be available for $3. Twelve-ounce domestic beer will cost $5.

That’s not all that impressive in the real world, but in the captive-audience universe of sports stadiums, bottled water for $2 is a freaking revelation. Steve Cannon, CEO of the Falcons’ parent corporation, told ESPN’s Darren Rovell that they tried to match prices fans would pay in “everyday life,” which bucks sports trends, to say the least.

Possible things that are going on here:

  1. The Falcons owners are hoping that if fans can get cheap food, they’ll be willing to spend more on tickets.
  2. The Falcons owners are hoping that if fans can get cheap food, they won’t bring their own in those clear plastic bags the NFL requires.
  3. The Falcons owners are hoping that if fans can get cheap food, they’ll start buying more PSLs already.
  4. This is a bait-and-switch where in a year or so, the cheap concessions items will get smaller and smaller, and you’ll have to pay top dollar for a normal-sized Dasani water.
  5. The Falcons just love their fans so much that they’re doing them a favor by HA HA ha ha sorry, couldn’t keep a straight face there.

Anyway, something is going on here, and it’s worth noting in case it becomes a more widespread trend. I still stick to my motto of “friends don’t let friends buy stadium food,” but if other teams started charging $2 for water, I … would probably still pay 50 cents for mine at the corner grocery before heading to the game, but it’s be less of a necessity.

 

Santa Clara, 49ers involved in epic battle over proper filing of police overtime bills

There is a throwdown going on between Santa Clara Mayor Lisa Gillmor and the owners of the San Francisco 49ers about whether the team is using general fund money for stadium costs, and both the total amount of money (maybe a couple hundred thousand dollars) and the details are fairly trivial, but since it’s being talked about: The 49ers pay the city $170,000 per game for police and fire department costs, and when the city sends more officers and firefighters to a game than that, they’re supposed to bill the team. But they haven’t been, or the team hasn’t been paying it, or something. It hardly seems worth the $200,000 audit that Gillmore has ordered, to me, but if that’s what it takes to get the accounts receivable department in order, okay then.

The interesting bit here is that Santa Clara is even getting to make a stink about proper payment of police and fire overtime, since very few other teams pay for these costs at all — they’re a big part of why Judith Grant Long found that unreported stadium costs typically inflate the total public price tag by about 40%. So really, this isn’t so much a sign that the 49ers are ripping off the public (though they might be, in a very, very small way) as that the deal that Santa Clara cut protects taxpayers to a degree that’s unheard of in much of the nation. California really is a different world for stadium and arena deals, at least if you don’t count Sacramento as part of California.

Vegas stadium builders still have no idea how much public money they’re asking for

An article in Friday’s Las Vegas Sun revealed a few more details about the tax-increment financing plan that Sheldon Adelson, Mark Davis, and Majestic Realty have floated for a possible Oakland Raiders stadium in Vegas:

“We build a billion-four project, bring (an NFL) team, it now generates a substantial amount of incremental tax revenue … and so we would take that increment that we created by our investment there,” [Majestic Executive Vice President Craig] Cavileer said in an interview. “Without that increment, you would not be successful in your investment.”…

The district could theoretically include property taxes, live entertainment taxes paid on tickets at stadium concerts, sales taxes from merchandise sales and so on.

Details of the proposed tax district are still unclear, however, including exactly which taxes would be involved. But Guy Hobbs, managing director of Hobbs, Ong & Associates, said the district would likely not encompass any revenues that weren’t directly incidental to the stadium itself.

Hobbs, who sits on the infrastructure panel’s technical advisory committee, said tax increment revenue could flow into a pool of money that would also include funds from operating the stadium. All of that could be used to pay the stadium expenses, he said, and any remaining revenue could be used to help provide a financial return to Sands and Majestic.

Let’s break that down a bit: First off, “directly incidental to the stadium itself” is a strange way of putting it, but presumably means it would only involve taxes actually paid on the stadium site. (What about at a steakhouse built next door to the stadium as part of the same project? Neither Cavileer nor Hobbs said.) Sales tax increment financing isn’t actually legal in Nevada, according to Greg LeRoy of Good Jobs First, or at least hasn’t been used there previously, so that could be a tough lift, and sales tax would be by far the largest piece of any TIF district. And paying stadium expenses with tax money would be, of course, a subsidy in exactly the same way that paying for construction costs would be, since this would be a privately run stadium where the private companies involved got all the stadium revenues — which you’d think would be enough to provide their “financial return,” but maybe they’re saying this is such a horrible stadium deal that it can’t turn a profit without $750 million in cash subsidies plus hundreds of millions more in TIF money? Stop with the hard sell, guys!

Hobbs suggested that any TIF numbers should be “stress tested” to make sure the money involved doesn’t get to a point “where it’s perceived to be — or is — too high,” since “otherwise, you could have these unbridled returns, and I don’t think anybody is interested in that.” No, I have no idea how much additional tax money kicked back to a billionaire who’s already getting $750 million in tax money qualifies as “unbridled,” and I’m sure Hobbs doesn’t either, but this appears to be a way of setting up an argument that hey, sure, we’re kicking back taxes on hot dog sales, but not as much as we could have, okay? I’m sticking with the quote that I gave the Sun for the same article: ““The question for me is not whether this is a bad deal for Nevada — it’s how bad of a deal.”

Falcons PSL sales slow before reaching halfway mark, haven’t we seen this movie before?

Personal seat licenses are a weird thing. When it goes well, forcing fans to buy the right to buy season tickets — a right that they can then sell to other fans down the road, demand willing — can raise hundreds of millions of dollars for teams building new stadiums. When it goes not so well, fans realize they don’t have to spend on PSLs in order to get tickets, the bottom drops out of the PSL market, and the Oakland Raiders happen.

The Atlanta Falcons are currently walking that knife’s edge with their PSL sales, which with 16 months to go before the new stadium opens, are slowing just shy of the halfway mark:

The latest sales figures — obtained from the GWCCA, a state agency, through an open-records request — show 4,437 club seats have been sold (up from 4,259 through Nov. 30) for $98 million and 24,774 non-club seats have been sold (up from 22,358 through Nov. 30) for $70.8 million.

The Falcons have said PSLs will be required for all seats sold as season tickets in the 71,000-seat stadium, with the exception of about 5,000 seats in suites. Team officials have declined to say how many seats are available as season tickets, noting some seats are withheld for groups, sponsors and other business purposes.

This isn’t necessarily a disaster — 16 months is a long time, and the Falcons can always tweak their pricing like the New York Jets did if they have to. And since they’re only counting on the PSLs bringing in a couple hundred million dollars, and it’s on Falcons owner Arthur Blank to make up any shortfall, it’s not a big deal from a public-cost perspective.

Still, if it turns out that Falcons fans didn’t have to buy PSLs in order to get seats, and the value of the licenses collapses as a result, this could lead to other cities’ fans getting cold feet about giving their cash over for an asset that they can’t resell at anything close to what they paid for it, which could ultimately end up wounding the PSL goose, if not outright killing it. And that would have a significant effect on how future NFL stadiums get funded, and which ones get built at all. Worth keeping an eye on, anyway.

Florida to again consider $100m in sports tax kickbacks for projects already being built regardless

It’s time again for the Florida legislature to vote on the dumbest sports subsidies ever, wherein the state gets to hand out money from sales taxes to any sports organization that asks, to pay for venue upgrades they’re doing anyway, just because Florida, man. This year’s three candidates are the Jacksonville Jaguars, the Miami Dolphins, and Daytona International Speedway, which are set to receive a total of $210 million over 30 years (about $100 million in present value); the state Department of Economic Opportunity insists that Florida taxpayers will get a return on their investment via increased economic activity, though given that the work is already underway (in the speedway’s case, actually completed) whether or not the team owners get the money, it’s hard to see how this could be true.

It’s all mind-numbingly idiotic, and should be laughed out of the legislature in a sane world. Instead, naturally, we have legislators only thinking it’s a bad idea because Miami Marlins owner Jeffrey Loria ripped them off once:

“I personally have an issue where taxpayer money is being used to fund billionaires,” [House Economic Development & Tourism Chairman Rep. Frank] Artiles said. “If [Marlins owner Jeffrey] Loria actually tries to sell the Miami Marlins, he has a major windfall on the back of taxpayers.”

That Loria, he just ruined it for everybody.

Davis pledges $500m toward Vegas stadium, could actually ask taxpayers to pay entire $1.4B cost

Here it is, the big Oakland Raiders Las Vegas announcement you were waiting for since it was first leaked at the beginning of the week:

[Raiders owner Mark] Davis told an influential tourism committee gathered at UNLV that the Raiders would put up $500 million toward the stadium if Nevada legislators approve public funding for the project and other NFL owners allow the team to relocate…

“We do want to be your partners. We’re not coming in looking for a free handout,” Davis said. “I want to tell you what I told Gov. Sandoval a few weeks ago: Together, we can turn the Silver State into the Silver and Black State.”

That’s not exactly the catchiest slogan, but never you mind about that. Let’s take a closer look at exactly what Davis (and billionaire would-be Vegas stadium builder) Sheldon Adelson) are offering, and what they’re asking for:

  • The stadium would now cost $1.4 billion, up from $1.2 billion just a couple of months ago, presumably because if it’s hosting an NFL team it’s going to need a snazzier eternal flame.
  • Davis’s $500 million pledge would include $200 million in NFL G-4 money, plus $300 million out of his own pocket.
  • As for the other $900 million, $750 million of it would be from hotel and rental-car taxes (down slightly from $780 million in the last proposal), and the other $150 million would be in mystery “private funds.” Since we haven’t mentioned Adelson yet, and he has $150 million in loose change in a jar in his kitchen, maybe he could bring that.

That’s the deal as presented in the headlines today. What’s being largely overlooked is this, which appeared way down in the 18th paragraph of the Las Vegas Sun’s story:

The companies would also want a tax increment district in the area around the stadium. Details would still need to be ironed out, but Majestic executive Craig Cavileer said the district would help the stadium’s private backers get a return on their investment.

This is potentially huge: “tax increment financing,” for those who need a reminder, involves kicking back increased property and/or sales taxes from an area around a development project, to help pay the project’s costs. We obviously have no idea how much money it could provide — depending on how big you draw the district, it can generate an almost unlimited amount of tax revenue — but if Adelson and Davis are looking at this as a way to provide a “return on investment,” that means it’s going to go to reimburse their $650 million in costs, not state taxpayers’ $750 million. In other words, if enough TIF money can be agreed on, the private costs could be as low as zero, with the entire $1.4 billion nut either provided by tourist taxes or by TIFs.

It’s an incredible bit of media legerdemain to turn a request for potentially the largest NFL stadium subsidy in history into headlines about a promise to put up half a billion dollars in private funds — props to Davis’s (or more likely Adelson’s) PR strategist for coming up with this one. And that’s before even getting to Davis’s “commitment” to Las Vegas, which as I predicted Wednesday comes with a whopping out clause, in that if he gets an offer he likes better, he can always have the NFL vote against the move, and say, “Hey, sorry, they wouldn’t let me go to Vegas, I tried.”

Not that I expect Davis or the NFL to turn down this deal if it really includes both $750 million in cash plus additional TIF subsidies, because who would turn down a new $1.4 billion stadium essentially for free, regardless of what market it’s in? We still have to see if the Nevada legislature is crazy enough to approve it, but this is no longer merely a leverage deal: It’s an attempt at the biggest public cash grab in NFL history, which if Davis can pull it off despite currently having zero other legitimate bidders for his team’s presence would seriously move him up the rankings of evil supergeniuses with questionable haircuts.

Mark Davis definitely going to announce plans to use Las Vegas as Raiders move threat

We have another “Mark Davis is gonna say something about the Oakland Raiders and Las Vegas on Thursday” report, this one with sources that are, if not named, at least identified a bit beyond the earlier rumors:

Davis’ appearance Thursday – and the commitment he is expected to make – could be a difference-maker. Davis will leave no doubt his franchise will pursue relocation to Las Vegas if the stadium project is approved.

“It’s huge because the committee sees (the Raiders) as serious,” a source close to the situation, speaking on the condition of anonymity, told this newspaper. “And if (the committee) approves the funding, there will be no stopping the train.”

Meanwhile, there is growing sentiment within the NFL that fellow owners are opening up to Las Vegas and granting Davis his wish to move there should he request it.

“It would be a good home for them,” said a high-ranking NFL source.

This pair of anonymous quotes — in particular the one identified as being from the NFL — give us a bit more of a sense of what’s going on here. Davis is clearly shopping around for a better stadium deal than he has now in Oakland (which isn’t a bad stadium deal, mind you, but it’s not as good as all the other teams that have brand-new stadiums that were largely paid for by someone other than them), and if Las Vegas ends up building a stadium, he wants to shake that tree now while the tree-shaking is good. And the league office is at least tacitly giving him the go-ahead to do this, because why the hell wouldn’t they? Having stadium offers in pocket is the lifeblood of the industry, almost as much as buying the silence of brain-injured players, plus it helps out a friendly local billionaire, and you never know when you’re going to need one of those.

Now, does this mean the Raiders are actually moving to Las Vegas? Not by a longshot, at least not yet. First off, Nevada still has to approve the $780 million in subsidies that billionaire Sheldon Adelson is looking for, and that phrase right there is why it’s likely to be an uphill battle. But even if the stadium is approved, “pursuing relocation to Las Vegas” is no guarantee of relocating to Las Vegas — Davis could change his mind if he gets a better offer from elsewhere, or the NFL could change his mind for him, or (most likely) he could change his mind and then have the NFL deny him approval to move (or place an exorbitant relocation fee on it) to provide him with plausible deniability if he decides he’d rather move to Los Angeles or San Antonio or Walla Walla or wherever.

Las Vegas wouldn’t be as terrible a location for the NFL as for, say, hockey: Sure, Vegas’s TV is smaller than West Palm Beach and the only people with any spending money there are tourists, but football is the one sport where local TV deals don’t matter, and with only eight games a year maybe the Raiders could sell themselves as a destination theme vacation or something. I’m not saying it’s a good idea — staying put in Oakland, even in an older stadium, could well be better — but it’s not completely crazy. And as far as creating leverage goes, it makes perfect sense. Plus Davis can make a side trip for a haircut!

Some sportswriters say they totally heard the Raiders are moving to Vegas, no really, a guy said it

Oakland Raiders owner Mark Davis is following up his appearance at a Nevada state legislative hearing two weeks ago on a new Las Vegas football stadium with an appearance at another meeting of state officials this Thursday, and … and that’s really all we have to go on, but certain football writers, citing “sources” in one case and their own brains in another, are still off to the races:

And from a Twitlonger by Joe Arrigo:

Here is what I can confirm and KNOW in regards to the Raiders and a move to Las Vegas.
The Sands Group (who is attempting to build the stadium) is meeting this Thursday to discuss (and potentially approve) a new stadium for the UNLV football program and the Raiders.
Mark Davis, the Raiders owner, will be in attendance at the meeting on Thursday and speak at the meeting as well. Davis is ready to commit to moving the Raiders to Las Vegas at the meeting Thursday if they approve the new stadium.
The Raiders would move in 2017 or 2018 and play at Sam Boyd stadium until the new stadium is built. Davis already has toured the stadium with Tony Sanchez and the UNLV president and AD, and is on board with playing there temporarily.

Cole is an NFL columnist for Bleacher Report who specializes in Q&A’s with current players, which doesn’t seem like the best way to get the inside scoop on whether the Raiders are moving to Las Vegas. [UPDATE: Cole would like you to know that “whatever dude, I’ve been on the stadium/LA issue for 10 years.”] Arrigo, per his Twitter bio, is a high-school wide receivers coach, and a former radio host, and runs a UNLV fan site, which makes “Q&A reporter for Bleacher Report” seem like Bob frickin’ Woodward.

Since we’re here, though, here are the reasons why it’s extremely unlikely that Mark Davis will be moving the Raiders to Las Vegas anytime soon:

  1. The Raiders still have second dibs on sharing the Los Angeles Rams‘ new Inglewood stadium, if the San Diego Chargers pass it up. The Chargers probably won’t — their campaign for a new stadium in San Diego is currently somewhere between “longshot” and “train wreck” — but it’d be nuts for Davis to throw away the option before he sees what becomes of it.
  2. Notwithstanding Joe Arrigo, the Vegas stadium is not going to be approved this Thursday. First off, this isn’t even a meeting of the state legislature, but of something called the Southern Nevada Tourism Infrastructure Committee, a group of political and business leaders convened by the governor to examine possible tourism initiatives and report back this summer. Secondly, there’s the little matter of the $780 million in public subsidies that billionaire Sheldon Adelson wants for his proposed stadium, which is going to take a while to put together, if it gets any traction at all.

Still, media events like this aren’t meant to signify anything real, they’re meant to provide a sense of “momentum” to stadium projects — so Davis and Adelson and the NFL must be just thrilled that NBC Sports’ Mike Florio is reporting exactly that. In an age where people are famous for being famous, getting credited with momentum for leaking news to the press that you have momentum is probably the next logical step.