The head of an influential state tourism panel today suggested slashing the amount of public money for a proposed domed football stadium by $200 million, triggering strong pushback from the project’s private backers.
At a meeting of the Southern Nevada Tourism Infrastructure Committee, Chairman Steve Hill introduced an alternative plan to fund the much-debated 65,000-seat stadium that could attract the Raiders to Las Vegas. The plan was not received well by representatives of the Raiders and the two companies teaming up to back the project, Las Vegas Sands Corp. and Majestic Realty Co.
The alternative entails using $550 million in money through hotel room taxes rather than the $750 million initially proposed.
Under that vision, the stadium cost would total $1.45 billion, which includes $50 million for land acquisition and $100 million for a practice facility. The Raiders would be responsible for $500 million, while Sands and Majestic would contribute $400 million.
According to details of the plan further fleshed out by Jeremy Aguero of Applied Analysis, private backers could receive a 9 percent return on their investment. Any revenue available beyond that would be split 50-50 between the development partners and the public sector, Aguero said.
Aguero said the public portion of the stadium cost could be funded with room tax increases of 0.7 percent on the Las Vegas Strip and 0.5 percent in off-Strip areas of the valley. Sands and Majestic were seeking a uniform room tax increase of about 1 percent, he said.
As with the initial proposal from Sands and Majestic, the alternative plan also includes a tax increment area that would capture revenue from sales taxes, live entertainment taxes and modified business taxes. The tax area would only include the footprint of the stadium and related practice facilities, according to Aguero’s presentation.
Executives from the private entities pushing for the football stadium said they had only received the alternative plan one day earlier, and they expressed general discontent with its contents.
Raiders President Marc Badain told the committee that while his team remained excited about the stadium, it was “disappointed by what we saw today.” He said the Raiders had received “very positive” feedback from others in the NFL, and he indicated that the potential $750 million public contribution was a big part of that.
“The signal that today will send, bringing the 750 down to the 550, will be negative,” Badain said. “It will be perceived as a negative. So we need to be cognizant of that and what that does to the process.”
NFL support is a crucial step in order for the Raiders to actually relocate from Oakland to Las Vegas: The team would need 24 of 32 team owners to vote in favor of the move. (Even before that, however, the stadium project needs to be fully vetted by the infrastructure committee and ultimately OK’d by the state Legislature, likely during a special session.)
At the same time, Majestic Executive Vice President Craig Cavileer reminded the committee that the private backers would be on the hook for any cost overruns. But in his view, the $400 million that the alternative plan proposed to come from Sands and Majestic was too high of a starting point.
Andy Abboud, Sands’ senior vice president of government relations, also sought to push back against cynicism over the involvement of his company and its leader, Chairman and CEO Sheldon Adelson, in the stadium plans.
“This is not a get-rich-quick scheme; this is a get-poor-quick scheme that there are no really good returns on,” Abboud said. “I know there’s cynicism about subsidizing a billionaire, but you’re not.”
Abboud said no one at Sands would come to Adelson with a project as costly as the stadium that would only offer a 9 percent return. He said there were “no nefarious intentions by Mr. Adelson to get rich” off the stadium.
The private backers were not the only ones who received the alternative plan negatively. Clark County Commissioner Steve Sisolak, a member of the infrastructure committee, said earlier in the meeting that he did not want the stadium to become “the Hill-Aguero proposal” and that he and other members of the panel were not given enough input.
Later, Sisolak raised the possibility of expanding the proposed tax increment area to help make the funding plan more palatable. That conversation also highlighted a major uncertainty for the potential stadium: the exact spot where it would be built.
Initial talks about the stadium focused on a 42-acre site that UNLV owns on Tropicana Avenue near Koval Lane, but concerns about that land’s proximity to McCarran International Airport helped lead stadium boosters to publicly discuss other possibilities. Those include the site formerly home to the Riviera hotel-casino and MGM Resorts International’s festival grounds across the street from SLS Las Vegas.
Of all the possibilities — another of which is the Cashman Center site — it remains uncertain which is the most feasible. Cavileer said the stadium backers won’t have a site finalized by next month, when the committee meets again, although he said they may be able to return with a handful of finalists that can inform future discussions.
The Las Vegas Convention and Visitors Authority owns the Riviera site, where it plans to eventually build a new facility that will expand its Las Vegas Convention Center. Rossi Ralenkotter, the authority’s president and CEO, said today that there had been “preliminary talks” about putting the convention center expansion and the stadium on that land, but that more acreage would be necessary to fit both facilities.
MGM Resorts President Bill Hornbuckle, a member of the infrastructure committee, indicated that his company was open to discussing whether the stadium could be built on the festival grounds site.
For all that remains up in the air and up for debate, Hill seemed optimistic toward the meeting’s end that the infrastructure panel and stadium backers could find a way to move the project forward.
“I don’t think we’re that far apart,” he said.
Other sources of debate: Metro needs, Convention Center expansion
The infrastructure committee also grappled with other issues today, including staffing needs from Metro Police and the proposed expansion and renovation of the Las Vegas Convention Center.
After discussing the alternative funding plan with the stadium backers, the committee heard from Sheriff Joe Lombardo, who echoed a point he made months earlier: Metro needs more police to keep Las Vegas tourists safe.
The alternative stadium funding plan identified a way to allocate $4 million in extra tax revenue to Metro. But Sisolak lambasted that as insufficient, and Lombardo agreed that he needed much more.
Even before discussing the stadium plan and Metro’s concerns, the infrastructure committee further debated the convention authority’s $1.4 billion expansion and renovation project.
Going into the meeting, a draft legislative recommendation for the convention center proposal laid out two options for a seven-member oversight panel of experts in such areas as engineering and the construction of convention facilities.
Under one option, the panel would serve an advisory role. So if the authority’s board did not follow the panel’s recommendations, it would have to state its reasoning in writing, include that in its minutes and submit those to the governor and Legislative Counsel Bureau.
Under the other option, the oversight panel would serve a “required assent” function. So if the convention authority did not adopt the panel’s recommendations, it would also be required “revise and resubmit its request for the issuance of bonds or any other form of indebtedness” to the panel. That would, in essence, empower the panel to potentially stop progress on the convention center project.
Members were initially split over the two options, but then Chairman Steve Hill came back with a new suggestion. He proposed that a supermajority vote from the convention authority’s would be required to override the oversight panel’s recommendations.
Hill said the committee would discuss that as “the option” for the convention center project at its next meeting, currently scheduled for July 11.
The committee needs to send all of its recommendations to Gov. Brian Sandoval by the end of July.