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!
Last paragraph should’ve began, “The minute percentage of Nevadans who opposed the stadium bill…”
That would’ve also provided the answer to why no legislator would’ve had a chance in Heck (pun intended; will explain later) of grabbing anywhere close to $100 million in pork for his/her vote.
The bigger issue is that people in the Las Vegas area (and most areas within a reasonable range of Vegas) wanted this stadium, and Democrats were too scared to block it. A block would’ve given more ammunition to the aforementioned Heck (Joe, Republican candidate for “retiring” Democrat Harry Reid’s US Senate seat) and other Nevada Republicans.
You even wrote about it Neil, remember? The only thing possibly stopping this deal was if Democrats felt that they had the political capital to hold up this deal against southern Nevadans’ wishes. They didn’t.
I guess 55% is “minute” now? I’ll never understand this New Math.
https://www.fieldofschemes.com/2016/07/28/11406/vegas-area-residents-dont-want-to-give-any-tax-money-to-raiders-stadium-let-alone-950m/
Citing that poll is beyond laughable. The wording is obviously biased.
Argument by assertion will get you nowhere, Ben, even if you throw the word “obviously” around.
Anyway, that’s the only Vegas poll I’ve written about, so I have no idea what you mean by “You even wrote about it Neil, remember?” unless you’re trying to gaslight me.
You wrote about the LVRJ article that pointed out that the stadium vote would only get held up if Dems felt they had the political capital to push the stadium vote until after Nov. 8.
That’s about horse-trading, though. Public opinion doesn’t enter into it.
Las Vegas has finally found a place on the map, huh Ben?
Good for Las Vegas and good for the Raiders!
You must be kidding right? Tell me you’re kidding.
RaiderNation is in full force, RN4L
Since you want this so bad, then you cut a check to Davis and Adelson then. If not, then you have nothing of consequence to contribute outside of your fandom.
Doesn’t even seem right. Like the Vegas Raiders just sound so wrong.
Thank goodness! Sure, I’ve been to Las Vegas many times, and I’ve thoroughly enjoyed the hotel pools, clubs, restaurants, Cirque du Soleil shows, Penn & Teller, UFC fights, the Pac-12 Tournament, etc. But I had vowed never to return because they didn’t have an NFL team playing in a state-of-the-art stadium. Now I’ll definitely be back!
I have only been to Las Vegas once. I was there for a convention and it really struck me that without a football stadium there was not much to do once the meetings were over.
Hopefully, now that there is a football stadium there, the next time I have to go to Las Vegas it will be more fun for me.
I was recently in Houston on business. I was really impressed by the fact that they have an NFL team playing in a state-of-the-art stadium. Even though I wasn’t there on one of the 10 days a year when the team plays, it just really impressed me as a visitor, and demonstrated to me that Houston is serious about tourism. I’ll definitely be taking my family to Houston for summer vacation for that reason.
Similar situation for me.
I was going to go to Honolulu for vacation, but then I found out they don’t have an NFL stadium.
So instead I went to Cleveland because First Energy Stadium is there.
I didn’t actually go to a game, or even take a tour of the stadium, but I did sit outside of it for 3 days and just stared at its majesty.
Good choice. It always amazes me that people vacation in places like Hawaii, Los Angeles, Sedona, Lake Tahoe, Montreal, Portland, San Antonio, Aspen, the Grand Canyon, Santa Barbara, or Las Vegas. Those places obviously aren’t serious tourist destinations because they don’t have state-of-the-art NFL stadiums.
Is it possible you were in Las Vegas New Mexico? (no I get it, sarcasm)
It saws as I recall in the middle of the desert. If the desert des not have a state of the art football stadium the dessert all looks alike.
You just haven’t met the right dessert cart.
Las Vegas is finally on the map. Good for them, it’s been a sleeping giant for far too long.
You see Neil you’re not understanding the totality of the plan. NDOT knew exactly what it was doing. Those funds generated from fuel taxes: that measure comes up for vote next month. Threats have already been made about not passing it. Add the stadium congestion to it. As far as the Assembly losing their minds: they didn’t. They were paid to do exactly what they did. The funny thing is when a silent vote was initially cast Friday morning, there were not enough votes to pass. They recessed for 90 minutes, just enough time for some palms to be greased, a voila: it passes. This despite the fact that NDOT outright lied to the mayor of Las Vegas and a County Commissioner, politicians passing an ordinance blocking public disclosure of potential conflict-of-interest, public debate being virtually eliminated, phone lines to politicians being severed, local media being compromised, etc.
This was going to be passed the moment that Sands executive made the threat of $750 million or nothing and feckless politicians acquiesced. Again, the public at-large (outside of the lemmings that are American football fans and the construction worker) detest this deal. You heard it hear first: this will be the deal that ends Las Vegas as we know it. Sure, the city will get its visitors and the like, but the city officially died on Friday. If you look at the raw economic numbers nationally, this country is on the verge of a major economic correction. They had a chance to fix it in 2007; instead, they made the problem much worse by injecting capital into a dying financial principle. Now the liquidity is gone and a much bigger bill is due. The only way to pay for it is some type of prolonged armed conflict similar to World War 2. I’m not saying we’re headed to a world war, but something has to change or the country will be headed to financial ruin.
Financial ruin? Inconceivable. I heard there’s a presidential election, so I watched the Sunday morning news shows to figure out what’s going on. It turns out that there are only two national topics of concern: Donald Trump is a dirty old man, and Hillary Clinton used a private email system. There are no other issues, so I think you can stop worrying about “financial ruin”.
Is it really that bad for Nevada? If this stadium bill didn’t go through, there would still be an issue with the UNLV stadium. I have seen projections that claim UNLV could have built a bare-bones stadium for something in the neighborhood of $550 million, with UNLV providing $200 million and the State providing $350 million. So, unless you believe the State was not going to assist UNLV with their stadium, then the actual number that the State provided to assist the Raiders is $400 million because the other $350 million was going to be spent anyhow on the UNLV stadium.
The extra $400 million spent to bring the Raiders to town also brings a world-class venue that can be used for many other events. Who knows the true number of events, but it will be more than zero.
The best stadium analog I could find to the Las Vegas situation is Arlington, TX, where they enacted a small sales tax and a tax on hotels and rental cars and they are paying their bonds down very quickly.
http://www.star-telegram.com/news/local/community/arlington/article77646132.html
“Who knows the true number of events, but it will be more than zero.”
That is a very low bar for success for a facility that was not needed in an area that already has considerable budget issues. With logic like that even the olympics make sense.
If Jones and Kraft are in favor of it — which every indication is that they are — I really don’t see the owners rejecting the move.
And the other owners are just a bunch of mindless billionaire stooges willing to rubber stamp whatever Jones and Kraft throw in front of them. That’s how all those guys got so wealthy, by just doing what they are told.
They’re in line to get millions in free money. And a handful of owners also get the elimination of the threat of the Raiders moving into their territory. Oakland will offer precisely $0 for a new stadium and the relocation vote will pass. Read the writing on the wall.
They’re about to loose millions of free money from CBS if they move from the #6 & # 20 TV market to # 42. Also, why only get a $500 million expansion fee when just waiting a few years could get then a franchise expansion fee in the $3-4 billion range?
How much will the transfer fee be for the Raiders and where do the Raiders get they money? Mark Davis and Al’s widow own 47% of the team the rest is owned by other parties. Rumors are that Mark and his mom (?) dont have that kind of money, the NFL now has leverage to demand a high transfer fee, I would say 250mil.
I’ve been asking the same question Mark. Perhaps the relocation fee will be paid by the other (53%) partners? It is my understanding that only the Raiders organization can pay the relocation fee…the fee cannot be paid by 3rd parties, state of Nevada, etc.
Might be doing the math wrong, but if LA is 500 Million dollars.
And if Vegas metro are is 2 million, LA metro is 13 million,
So Vegas is 15% of LA,
and 15% of $500 million is $75 million.
However, the NFL owners will look at this and say,
“Hey Nevada is handing out money, and LA wasn’t,
so we’re gonna want us piece of that gravy train too.”
That’s not at all how it works. The math you want is:
If L.A. is $500 million, and Vegas metro is 15% the size of L.A., let’s see how many coins fall out of Mark Davis’s pockets when we turn him upside down and shake him.
The NFL will see how much it can get from Davis and will then want some additional monetary retribution for past Davis insults and lawsuits and general questioning the authority of the NFL.
$250 mil?? The NHL just got $550 mil for an expansion franchise. Kroenke paid $500 mil for LA. Figure an NFL expansion franchise would run $3-4 billion. Why would the NFL even consider anything less than what the NHL just got or what Kroenke paid?
Why on earth would they build a second stadium for UNLV??!? I haven’t read anything about an additional $380 million anywhere.
Is that $380 million apart of the $750 million?!?
What happens to the $380 million if (or hopefully when) there’s no 2nd stadium?
The $380 million is an alternate plan that was approved if the Raiders don’t end up going to Vegas. If the $750 million stadium gets built, then no, there won’t be a second one and UNLV will play there.
Thank you for clarifying, Joe!
Neil are you holding a sarcasm contest and not telling me? Some of these responses sound like just that
Assuming this Stadium gets built, could anyone guess as to what percentage
of the cost of building it would be spent locally. I would guess up to 2/3rds( labor, quarries, electrical plumbing etc) so it surprises this is not pushed as
a positive for building it.
If you just want the government to spend money locally, you could do that with road/dam/rail/electrical grid/library/hospital/school construction which would at least create something that was usable by the public. That’s a greater positive and to a certain extent, the opportunity cost of funding a stadium.
I could argue the same about a plan for Vegas to build me a $750 million house with local labor. Great deal for the community!
I might actually travel to Las Vegas, once, to see your $750 million house. The football stadium, never. Your house is clearly the better tourist attraction.
Yes, a $3/4 billion house would be a real attraction! Yet another football stadium, not so much.
Is it too late to offer this to the NV legislature as an option?
What ever happened to the TIF kickbacks which were on top of the direct subsidy?
Also, we need to get past the absurdity of claiming adding an HOV lane on a freeway, a new interchange for the airport exit and HOV-only exits for every casino exit has anything to do with a stadium that will be used 8 days a year. It is predicated on the “this is an incredible tourist boon” narrative which is on the face of it absurd. It’s a bullshit argument against the stadium built on top of a bullshit argument for the stadium.
I’d love to hear about what happened with the TIF as that was something that was real. Even without it, this is probably the most egregious stadium subsidy ever, dashing all of our hopes that post-LA owners might actually buy their own stadiums for a change.
Last I saw, the TIF appeared to be something that would go toward paying off the $750 million. I haven’t seen confirmation of that yet, though.
What’s wrong with you folks in Nevahda?
Ain’t you learned from ya mudda ‘n’ fadda?
What you’ll get, this I’ll say,
from this field of scheme play.
In the end only zip, zero, nada.
There is a reason why we are 50th among states in everything good and first in everything bad. An inferiority complex (e.g., just see how angry we become when someone says Nev-aaa-da) coupled with a nation-worst school system, a Vegas newspaper owned by a casino owner who wanted this built and the small-government Republicans that didn’t want to end up on his non-donor list. Now we will be first by a mile in getting fleeced by billionaires and their companies (Tesla, Faraday, Apple and now Raiders).
Oh and just today 19 Washoe County (Reno and Sparks) woke up to water damage from this weekend’s rain storm. No money to fix the roofs or build more due to overcrowding. So a ballot initiative to raise the sales tax to one of the highest around is up in November. So a regressive sales tax for the everybody and billions in corporate welfare for the uber-rich. Just another low-point in a state that specializes in them.
And, now the NFL says that it will postpone the vote into the Summer of 2017. This will be done only in an effort to secure season tickets in Oakland ahead of a vote. I’d love to see an empty Coliseum next year, but the NFL is gaming that, too.
If they want to leave Oakland, THEY CAN LEAVE THE NAME AND HISTORY BEHIND!!!!!! #STAYINOAKLAND
The NFL wants the Raiders to remain in Oakland because the market is bigger and offers more profit potential. Mark wants to go from the #6 TV market and #3 radio market down to the #42 TV and #31 radio market. What reason does the NFL have to rush into a proposition like that? My guess is they keep Marky dangling for as long as it takes them to get something worked out in Oakland. What’s Mark gonna do about it? This whole NV Legislature approval means nothing to the NFL. If you believe otherwise, you’re really not paying attention
Except Oakland isn’t going to give subsidies. Period. There’s just no political support for that in California, let alone the Bay Area, let alone Oakland. So I’m not sure what “get something worked out” means.
If Davis or the NFL or your pet cat wants to build a stadium in Oakland, everyone is all for it, but no one is going to give them $750M of taxpayer money and that’s that.
I really don’t think the media market matters. The TV, radio, and appeal rights are sold nationally so the team can move to Boise and still roughly make the same money (a bit less on gate, but labor is cheaper so it’s a wash). It’s why Green Bay is a viable franchise even though they play in 68th largest media market.
“because the market is bigger and offers more profit potential”
Wrong. Market size makes basically no difference in the NFL.
“Mark wants to go from the #6 TV market and #3 radio market down to the #42 TV and #31 radio market. What reason does the NFL have to rush into a proposition like that?”
See above. Plus NFL tv deals are 100% national and 0% local.
“My guess is they keep Marky dangling for as long as it takes them to get something worked out in Oakland.”
Oakland will not provide any money whatsoever to fund the construction of a new stadium.
“What’s Mark gonna do about it?”
He can move the team without approval if he really wants to. That tactic has been upheld in court.
“This whole NV Legislature approval means nothing to the NFL.”
Horseshit. You are directly contradicting what you said earlier in the post in another one of your embarrassingly false assertions.
Keep grasping for straws guys TV & Radio broadcast rights are where the NFL makes the bulk of it’s money. The value of CBS broadcast rights would drop like a rock going from #6 & #20(Sacramento) down to #42. For your reading pleasure:
https://www.washingtonpost.com/news/sports/wp/2016/10/18/the-raiders-may-love-las-vegas-its-far-less-clear-if-the-nfl-feels-the-same/
For what it is worth, the 49ers have more support in all of the Bay Area and Sacramento (and Fresno and really most of California north of the Tehachapis) than the Raiders.
One might argue the game of the week might get close to or even more viewers than the Raiders. A lot of us who live here aren’t from here.
TV and radio isn’t going to make this go one way or the other.
Ahhh, sweet public stadium cash on tap for the NFL. Who doesn’t love that? Apparently, based on all the snarking in here, you guys! Well let’s clear the thick smoke from the air here; let one of the Club of 32 members help you gain some much needed clarity.
Remember the bad old days of Leverage Angeles (brings a tear to my eye)? Stan the Man destroyed all that with his SoCal power play. I guess when you own a chunk of Walmart, shafting people is what you’re good at (Hello Dean Spanos!). So shafting the other 31 guys wasn’t so hard. I know, I know. the “heavy hitters” like Kraft and Idiot Jerry liked it. Don’t be a PUTZ! The vote against was a winner until Stan started making threats, then my weak-willed fellow upper crusters caved. Sigh. Oh well. Too much time sitting upon gold plated commodes makes a man loose, hard to swallow as someone once sang.
Anyhoo, staying on the pop song theme… what the world needs now is love, sweet love, and what the NFL needs now is leverage, sweet leverage. And that my friends is that, as they say. You figure the rest out.