Industry touchdown: At least in the short term, stadium construction promises work for local businesses

Mick Akers / Las Vegas Sun

Workers survey land on Russell Road near the Strip where a $1.9 billion football stadium is proposed for the Oakland Raiders and UNLV football.

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Decades of study and debate over the economic benefits of taxpayer-funded stadiums often show a deep divide between what supporters promise and what balance sheets deliver.

Less often doubted is the short-term boost to a city’s construction and development industries, a jolt for Southern Nevada already underway as hundreds of contractors vie for a piece of the $1.9 billion Raiders stadium and practice facility projects.

Estimates run for the Southern Nevada Tourism and Infrastructure Committee — the board set up in 2015 by Gov. Brian Sandoval to study the viability of the stadium effort — show anticipated one-time impacts of 10,829 jobs and $612 million in wages directly related to the project during construction.

Senate Bill 1, the law passed in an October 2016 special session of the Nevada Legislature authorizing $750 million in new tax money for the stadium, outlines two initiatives designed to maximize local involvement in building and operating the 65,000-seat facility.

Legislators amended the bill during the session to include requirements that at least 15 percent of stadium construction be subcontracted to “small local businesses” and that a community benefits plan be developed.

The bill explicitly lays out the qualifications for such a small local business: the company must be financially and operationally independent from any other business; have operated for at least four years within the state before entering into any stadium contract or agreement; have its principal place of business as a fixed location within Nevada; and meet a set of annual revenue limits based on the type of projects it has completed.

Those gross-revenue limits are:

• $20 million for public works projects

• $10 million for any other construction projects

• $10 million for any goods, materials, equipment and general service contracts

• $3.5 million for trucking

• $2.5 million for professional services, including architectural and engineering

General contractors Mortenson and McCarthy emphasized these requirements at a June introductory session with potential contractors at Green Valley Ranch that drew more than 1,000 attendees, as well as the first bid package meeting in July. Mortenson, an experienced stadium builder based in Minnesota, employs Lynn Littlejohn, a community benefits manager entrusted with tracking both the 15 percent requirement and the benefits plan as it relates to construction. McCarthy boasts local roots dating back to 1973 and represents the local general contractor on the project.

A database maintained by the general contractors shows 857 registered vendors as of Oct. 13. Of those, 659 (77 percent) list Nevada addresses and 370 (43 percent) identify themselves as small local businesses meeting the law’s requirements. These small businesses range in expertise from the expected in concrete and HVAC to the less traditional, such as the “Dude Where’s My Hotdog” food truck.

Even those versed in the project’s details often conflate the 15 percent requirement with the community benefits plan laid out in a different section of the law. The Legislature separately required the Raiders and any partner to develop a community benefits plan “to ensure the greatest possible participation by all segments of the local community in the economic opportunities available in connection with the design, construction and operation of the National Football League stadium project.”

Inserted at a time when casino magnate Sheldon Adelson was expected to contribute $650 million toward the stadium and act as the events company partner, the community benefits plan lingered in operational purgatory after Adelson withdrew from the project. Its nebulously defined concept spurred contention with some community groups in recent months.

“The community has not been shy about telling us what they think should be included,” said Jeremy Aguero, principal of Applied Analysis and the lead staff member for the authority. “Those have been heard and they have been understood relative to what those expectations are.”

The plan appears fleshed out by the Raiders and close to endorsement by the Las Vegas Stadium Authority board at its next scheduled meeting in November. Plan initiator state Sen. Aaron Ford, D-Las Vegas, and fellow legislators relayed concerns from various community interests while the Raiders and Stadium Authority board also conferred to produce an outline introduced in September.

“Between where we were in advance of the (board) meeting in October and where we are now, there’s no doubt that progress has been made,” Aguero said.

Littlejohn sought to assure community groups and businesses concerned about the availability of stadium construction jobs during the August and September authority board meetings that no plan yet had been agreed upon or enacted.

“People are thinking they’re behind the eight-ball, that they and their company have been left out; I just want to assure the board and everybody here that’s not the case,” Littlejohn said. “There have been no workforce opportunities that have been missed.”

She added that bidders had been informed of the available pool of contractors who meet the requirement as a qualified small business. The next bid package, including earthwork, site utilities, deep foundations, structural excavation, backfill and subdrainage, hydrotherapy equipment, and systems and miscellaneous metals, is due by Oct. 31.

Aguero added that his “marching orders” from Las Vegas Stadium Authority Chairman Steve Hill are to have the plan ready for potential sign-off at the board’s November meeting. The board technically does not have the power to approve the plan, but it will maintain some oversight of its execution over the construction and operation of the stadium.

“The Raiders are getting input from the stadium authority board because they want to make sure they’re doing the right thing,” Aguero said.

According to the September outline, the Raiders will manage a portfolio of efforts to involve minorities, women, veterans, unions, faith-based groups and the LGBT community in workforce development and job opportunities. This could include apprenticeship programs and even needs as basic as providing work clothes, boots and tools for disadvantaged people seeking employment. The team will develop an accelerated payment process for small businesses to ease cash flow issues.

Partners could include the Latin Chamber of Commerce, National Association of Minority Contractors, Women Business Enterprise Council, Nevada Contractors Association, Western Region Minority Supplier Development Council, Urban Chamber, Asian Chamber of Commerce, and the Gay and Lesbian Chamber of Commerce Nevada.

The Raiders also will “encourage and support community programs for veterans and military families, disadvantaged and at-risk youth, and low-income residents, including … discounted ticket opportunities for these groups.” Internships could be available to high school and college students as part of the plan as well.

“Some of the qualitative benefits are hard to define,” Aguero said. “How do you measure the benefit of an internship for disadvantaged youth?”

An appointed seven-member oversight panel will watch over these efforts, including receiving monthly reports on local small-business hiring and quarterly reports on all hiring targets.

Official groundbreaking on the 62-acre Russell Road site southwest of the Strip is expected to take place in early December, but site preparation work began weeks ago. The 31-month construction schedule should make the stadium available to the Raiders for the 2020 season.