Lots more Oakland A’s Vegas relocation news has been trickling out, buried in media reports from all over:
- Clark County officials are “concerned” that the proposed mega-TIF to kick back all sorts of taxes to pay for $200 million or so in bonds for an A’s stadium could leave taxpayers having to cover the balance if projected tax revenues fall short, according to Nevada Independent “sources.” Which, yes, that’s how TIFs often work, but it also shouldn’t really the biggest concern: If we can’t find $200 million in ballpark district tax money to hand over to John Fisher, we’ll have to find some other tax money instead is kind of misdirection, but if that’s the line in the sand that county officials are choosing to draw, so be it.
- KLAS-TV reports that, according to “a source familiar with the negotiations,” Fisher will also ask the state of Nevada to waive its 9% live entertainment tax on tickets for A’s games. This is a tax kickback previously provided to the owners of the Golden Knights and Raiders; it’s hard to say exactly how much it would be worth to the A’s owners, but if we guesstimate 2 million tickets sold per year at an average ticket price of $40, that’s $7.2 million a year, or enough to cover around $100 million in present-day construction costs, pushing Fisher’s total subsidy demand up to around $500 million, give or take.
- The TV station also reports that the A’s owners’ previous “binding” agreement on a Vegas stadium site was jettisoned “because the powerful Culinary Union wouldn’t support that site” because it would have been provided by a company that runs some non-union casinos. (Source: that same “a source.”)
- Oakland mayor Sheng Thao says she’s happy to reopen talks on a stadium at Howard Terminal if Fisher stops playing footsie with Vegas (or sells the team to someone else who will), saying, “Howard Terminal, it’s already entitled. And so I want the A’s to stay here. If the owners called us back and say, ‘Let’s get back to the table,’ we are very close to a deal.” The person interviewing Thao, KGO-TV’s Casey Pratt, then had to clarify that Howard Terminal isn’t actually already entitled, but it is close, and presumably could be if Fisher accepts the $775 million in state and city infrastructure money that’s already on the table.
There has still been no Nevada legislation introduced for a Las Vegas stadium, meaning we still have no way of assessing the total public subsidy Fisher is looking for beyond rumors and leaks, and there apparently won’t be until Clark County approves its share of the funding. Any bill has to be introduced by this Friday, and then there’s only another week to go after that in the state legislative session; this wouldn’t leave much time at all for public debate, but as previously noted, for many stadium subsidy advocates, that’s a feature, not a bug.
There’s been so many rumors about how Kaval and Fisher have pissed off casino executives and local politicians in Vegas- the in-depth recap after the dust settles will be pretty funny
Absolutely. It would make a great HBO special series (if you like baseball, it’s business and dislike Failson & Robin).
I’ll say this for the non-dynamic duo, they treat everyone they encounter with the same level of disdain and exploitation attempts. They are totally fair in that limited and completely unfair way.
Can’t they call a special session anyway? As an A’s fan I don’t want them to move but the session deadline isn’t ultra important, if I understand it.
The governor absolutely can call a special session, and I expect he will if nothing is resolved by Friday. But deadlines make for great artificial urgency, on top of the opportunity to claim there’s no time for a careful vetting, so I’m sure everyone will be turning up the heat to get something done this week regardless.
They could but they cost state money to do and probably more importantly it forces legislators to leave their regular lives (which for almost all of them includes full-time employment) and come back when they didn’t plan to. Not a great foot to get off on.
Special sessions are politically pretty unpopular, especially one focused on a giving money to billionaires.
The Governor has threatened to veto the state budget, which would result in a special session. He could include the As stadium in his proclamation, maybe they tack it on the to budget, but again, it’s going to be politically unpopular and Lombardo needs to start thinking about his re-election.
In other nevada news, Jeremy Renner was up at the Capitol lobbying for tax credits for film productions (Mark Walhberg has been doing the same). This seems pretty likely to pass. Kaval and Fisher could learn something from Hollywood.
Just a math/economy question… As you appear to, I have always used the $7 per $100 approximation for financing costs (or maybe you are using an online calculator). In the interest environment we have mostly lived through for the past 20 years or so, that is a reasonable assumption.
With the dramatic increase in interest rates for commercial and private lending in the last year or two, is this still a reasonable approximation to use for construction bonds?
I know if I was trying to build something today I would be paying a lot more in financing costs than I would have in 2004 or 2012.
Is that not also the case for billionaires? It would not surprise me if they manage to avoid the fallout of higher interest rates (they manage to avoid almost everything else, so…). I get that municipally owned or funded construction bonds may not move with normal lending rates, but is that enough to keep the borrowing/financing costs the same?
Don’t municipal bond rates still go up in a rising rate environment (even if they don’t go up as much)?
I usually use a 5% discount rate for present value — which isn’t really the same thing as interest rates.
The answer of how much construction debt you can cover with a particular revenue stream is a little complicated, as it’s going to depend on not just base interest rates but who’s doing the borrowing (county/state/team), whether they can get tax-exempt status for the bonds, what the rates are at the time they borrow the money, whether they can refinance later, etc. “Around $100 million” is the best I can say, but that “around” has large error bars in this case.
If Fisher intends to sell the team in the next few years, would he lower his tax bill by first moving the team from CA to NV? CA taxes capital gains as regular income tax. There is no taxation of capital gains or income in NV. Could this be another financial benefit to Fisher that hasn’t been quantified by media yet? Would CA try to go after the capital gains even if they move?
Wouldn’t that depend on where he lives, not necessarily where the team is located? If he’s still living in San Francisco, his personal Capitol gains would be taxed in California.
Average ticket price of 40 dollars? I would assume twice that price given the cost of Golden Knights and Raiders tickets.
NFL and NBA tickets are way more expensive than MLB because of scarcity. $40 is about the MLB average.
I want MLB baseball in Las Vegas. But I absolutely don’t want another stadium in THAT AREA !! If the parties cannot agree on another site outside of the MGM corridor, then I don’t want it ! And I want PARKING AROUND THE STADIUM ! Not in casino parking decks.
I’m guessing that this deal gets done in the middle of the night, on deadline, in a wired way. I think that it’s been that way from the get-go. However, I think that the Dumb-Dumb Twins, Fisher and Kaval, have given some of the power players doubts – they probably just need to shut up and let the backroom people do their thing.
An observation on the current “build us a stadium/arena or move” franchises. The owners are the predominant problem. How many cities really want to deal with Fisher? Meruelo? Sternberg? Getting another town’s piece of garbage tends to become a decade or more of irritation and frustration (and thensome). People, including the power players, want local owners – rightfully.
Governor Lombarbo promised he would not raise taxes to build the stadium, then the A’s sent their lobbying group up the see Governor Lombardo, and he instantly changed his tune to raise taxes (special tax district) and if the attendance is low, we may have to pay through our property taxes, while the billionaire only sees the profits. How much money is getting donated to the politicians campaign to make this happen? LACK OF TRANSPARENCY, SHOULD BE ILLEGAL!
“Wouldn’t raise taxes” was always a dodge — it leaves open redirecting *existing* taxes to the stadium, which is what the special tax district does.
Why don’t they consider taking the property of fiesta and texhaustion that’s been torn down Is a whole lot less money Building the stadium there would be a great And a whole lot less money Not to mention the traffic Impedance On the strip The property is available
Sir, I’m going to have to ask you to pull your vehicle over and provide some punctuation.
The A’s are going to move in the middle of the night. Like the Colts.