Some residents have wondered what would happen with the construction of the Las Vegas stadium if room-tax revenue fell short of the $750 million in public contributions.
First, that’s highly unlikely, officials say.
But, even if hotel room tax revenue began to dip below required amounts for a prolonged time, a reserve fund exists to handle such a scenario. Senate Bill 1, the law increasing Strip room taxes by 0.88 percent for the $1.84 billion, 65,000-seat domed stadium for the Raiders and UNLV football, requires a reserve with at least 18 months’ worth of room tax revenue in it.
And, as a precaution, the stadium authority is working toward a safety net of two years’ worth of room tax revenue.
Public bonds, which sold out in 90 minutes in April, accounted for an initial $45.1 million in the capital reserve account. That’s enough to fund the project if Clark County didn’t see a single visitor stay in one of its hotel rooms for an entire year.
“Obviously, that’s worst-case scenario and is highly unlikely,” said Jeremy Aguero, the lead staff member of the Las Vegas Stadium Authority and principal analyst with Applied Analysis.
The lodging tax has generated almost $62 million through the first 14 months, which is 2.4 percent above the originally budgeted amount. Don Webb, chief operating officer of the Las Vegas Stadium Co., said last week that $316 million — 17 percent of the project budget — has been spent so far. When the project reaches the halfway point of completion, officials estimate $4 million of work will be done each day.
The authority is now able to report the monthly figure with year-over-year comparisons, replacing the actual versus budgeted comps previously used. May 2018 outpaced May 2017 by 5.4 percent, grossing $4.35 million, the latest room tax report showed.
“It’s a more appropriate way to look at how room taxes are trending,” Aguero said.
Since changing comparison models, two of three months have outpaced the prior year. March was the only exception, seeing 7 percent less room tax revenue than 2017.
Stadium Authority Chairman Steve Hill, who is also the chief operating officer of the Las Vegas Convention and Visitors Authority, said the March drop-off was likely due in part to ConExpo not occurring at the convention center this year. ConExpo happens once every three years, with last year’s edition drawing around 128,000 people.
“It was an expected difference,” Hill said. “What was interesting to me when starting my new (LVCVA) job is how much difference that makes. It’s more than a 7 percent difference. So, a 7 percent in that kind of comparison is actually a stronger month than what we had expected.”
The taxes collected are expected to increase in 2020 once the stadium opens because some event attendees will stay in Clark County hotel rooms. A lodging tax of 0.50 percent is collected on Clark County hotel rooms outside the corridor. Taxes will be collected through 2048; the Raiders are covering the rest of the cost, including a $200 million loan from the NFL.
The public contribution, of course, is strictly on hotel-room tax and not property tax, as some residents mistakenly believe. And the authority estimates 95 percent of those staying in Clark County hotel rooms are visitors, Aguero said.