WASHINGTON – Less than two months after Las Vegas officials released a proposal to bring the Oakland Raiders to Sin City, a committee has proposed lowering the public price tag by $200 million.
The 11-member Southern Nevada Tourism Infrastructure Committee (SNTIC), made up of state and local government officials as well as gaming and casino leaders, called for $550 million of bonds to be issued to help finance the new stadium for the football team, a drop from the $750 million figure proposed in the original stadium funding plan released in late April.
But Oakland Raiders president Marc Badain said, during the June 23 meeting of the SNTIC where the new proposal was discussed, that the drop in public funding was disappointing, according to the Las Vegas Sun.
The SNTIC is scheduled to meet next on July 11. It is expected to issue its recommendations on the stadium financing this summer.
The total cost of the proposed 65,000-seat domed stadium and practice facility has risen to $1.45 billion from the previously proposed $1.4 billion price tag due to $50 million in new land acquisition costs, according to plans presented to local officials.
The new plan would keep the original P3 financing structure between Las Vegas and the Raiders, casino developer Las Vegas Sands Corp. (Sands) and Los Angeles-based property developer Majestic Realty Co. (Majestic). A Clark County, Nev. Stadium Authority would be created that would issue bonds backed by increased hotel and tourism taxes, which city officials have stressed would not impact residents.
To offset the difference in public funding, the proposed plan would increase the amount of private funding to $900 million from $650 million; Sands-Majestic would provide $400 million and the Raiders would put up $500 million. Under the previous proposal, Sands-Majestic would provide $240 million and the Raiders $410 million.
Meanwhile, Chris Giunchigliani, commissioner of the Clark County Board of Commissioners, is concerned the stadium financing plan would conflict with a proposal to finance the expansion of a convention center and is questioning the use of tax revenue for a sports stadium.
In a June 20 letter to SNTIC chairman Steve Hill, Giunchigliani said the stadium financing plan would violate the city's draft legislative recommendation on the convention center expansion and renovation. That draft recommendation states that tax dollars cannot be used to "improve and expand recreational facilities" or "construct, purchase or acquire recreational facilities" other than those authorized in the in the document.
"A proposed stadium is nothing more than a distraction to the discussion of updating [the convention center] and its proposed expansion," Giunchigliani wrote. "Room taxes are public and if someone wishes to build a stadium they should use their private dollars to build it – no public taxes should be utilized in any format."
The proposed hike in room taxes falls under the Las Vegas Convention and Visitors Authority's jurisdiction, he said. The city and the convention and visitors authority are also exploring a $1.4 billion plan to expand Las Vegas' convention center, which would also require funding from an increased hotel room tax rate.
But Las Vegas Mayor Carolyn Goodman is a proponent of the Raiders' relocation to the city.
The maximum amount of public funding would be $550 million, and the Raiders would contribute $500 million - $200 million of which would come in the form of a loan from the National Football League. The developers would provide $400 million and would be responsible for all remaining stadium development costs, including land and other infrastructure. Any public financing portion would have to be approved by both the Nevada state legislature as well as 24 of the NFL's 32 team owners.
Like Las Vegas' Convention & Visitors Authority, the stadium authority would have the power to issue bonds and collect revenue supporting debt through Clark County. A proposed tax increment district would allow for the collection of state and county tax revenues generated by the stadium, which the stadium authority would then allocate to developers. The proposed five-member stadium authority would have to be approved by the Nevada state legislature before it could issue any bonds.
The lease agreement for a Las Vegas stadium would be for 30 years with two, five-year extensions at team option, according to the plans. Bonds issued by the Stadium Authority Board would not be released until $350 million of project expenditures were incurred by developers.
The proposed stadium would have the 11th highest percent of public funding among the 21 NFL stadiums built since 1996, according to figures from the advisory and planning firm Conventions, Sports & Leisure.
The developers must receive approval from the NFL and contract with the Raiders to relocate the team to Las Vegas within a year of the room tax increment being implemented, according to a timeline provided by SNTIC. The Stadium Authority also has the power to grant a one-time six-month extension.
Developers are currently looking at four potential sites to construct a stadium, according to the Las Vegas Review-Journal.
Officials also have a backup plan should the NFL stadium proposal not come to fruition: Raised room tax revenues would instead be redirected to fund a new stadium for the University of Nevada-Las Vegas football team contingent upon the school raising $200 million in private funds within two years and approval of a development plan by the Stadium Authority Board.
In February, the Raiders signed a one-year lease to stay at the 50-year-old Oakland-Alameda County Coliseum for the 2016 season, where they have played home games since 1995. Besides a desire to leave the dilapidated stadium, the Raiders also boasted the league's second-lowest average home attendance in 2015. Raiders owner Mark Davis has expressed a desire to bring the team to Las Vegas after its failed bid to move to southern California before the 2016 season, and after Oakland officials have remained adamant about not using public tax dollars to fund a new stadium in the city.
The new plan for the stadium comes after The National Hockey League announced in late June that Las Vegas received the winning bid to host a future expansion team beginning in 2017-18. That expansion team would play its home games at the existing T-Mobile Center in Paradise, Nev., requiring no new stadium to be built.
The Raiders' financing controversy illustrates the ongoing national debate between supporters of federal, tax-free funding to construct new stadiums who stress the revenue teams can generate for cities, and critics who say tax-exempt bonds are an improper means of spending public funds.
Some local government officials like Goodman are supporters.
But opponents include President Obama, who in his fiscal 2016 and 2017 budget requests proposed prohibiting tax-exempt bonds to be used for financing private sports facilities by eliminating the private payment test for them.
Republican lawmakers are also opponents. Rep. Steve Russell, R-Okla., introduced The No Tax Subsidies for Stadiums Act (H.R. 4838) in March, which would prohibit the use of tax-exempt bonds to build or subsidize professional sports stadiums and for-profit entertainment arenas. It is currently before the House Ways and Means Committee.