The Las Vegas MLS stadium plan, which is already holding on by the skin of its teeth, could face another major hurdle, with Vegas financial consultant Guy Hobbs noting that the city would almost certainly have to use general revenues as a backstop for its $3 million a year worth of stadium bond payments:
“In all likelihood, the city will pledge general tax revenues to secure those bonds because this source of revenue (collected room tax fees) can be renegotiated and theoretically go away and not be a revenue source that would a good pledge,” Hobbs said Monday.
“Bondholders want to make sure that the money they have paid for the bonds will be repaid to them without fail over the life of the 30 years,” Hobbs said. “You pledge a source of revenue to repay … What ultimately is at risk is the general tax revenues.”
In plain English, this means that nobody’s going to buy bonds if the only guarantee they’ll be paid off is some hotel tax money that may or may not exist. So instead, Las Vegas would need to promise that if the hotel taxes don’t come through, it would fill in the gap with other city funds.
This ultimately isn’t a huge deal — either way, the city is pledging $3 million a year, so it doesn’t matter all that much which pocket it comes from — but it’s certainly not going to help win any votes on a city council that is currently set 4-3 against continuing to negotiate the soccer stadium deal beyond tomorrow night’s council meeting. In fact, Lois Tarkanian — yes, she’s married to that Tarkanian — the swing vote on the council, is now saying she’ll only vote to keep the deal alive if the developers drop their demand for a city subsidy, and that won’t happen because:
Cordish/Findlay wants the $90 million subsidy from Las Vegas to build the 24,000-seat stadium on 61 acres in Symphony Park because the partnership argues its profit margins are too thin.
Yeah, don’t we all. Speaking of which, could you readers please deposit $90 million into my Supporters fund? My profit margins are way too thin.