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Will Las Vegas Bet on a $1.4 Billion Sports Stadium?

Posted May 9, 2016

John L. Smith The Daily Beast

 

Everyone loves a parade, and lately multibillionaire casino mogul Sheldon Adelson has been leading one as his Las Vegas Sands Corp. presses ahead for a $1.4 billion domed stadium plan that includes luring the restless Oakland Raiders to a town hungry for a professional sports franchise.

But in Las Vegas, there’s always an angle. The Sands stadium deal, in partnership with California billionaire Ed Roski’s Majestic Realty, includes real estate owned by the University of Nevada Las Vegas (UNLV), and $750 million of hotel room tax revenue—a move critics contend is Adelson’s way of undercutting his longtime rivals at the Las Vegas Convention and Visitors Authority (LVCVA.)

There’s been a conspicuous lack of skepticism in the local press, which with few exceptions has obsessed on the odds of the Raiders’ arrival instead of the audacity of the stadium’s financing plan. Only political journalist Jon Ralston has consistently questioned the deal’s leaps of faith and lack of transparency. The stadium announcement comes just weeks after the Adelson family’s controversial purchase of the Las Vegas Review-Journal, the state’s largest newspaper and until recently a consistent critic of similar stadium proposals using a stack of public dollars.

 

But, hey, let’s not rain on that parade just yet. When the Southern Nevada Tourism Infrastructure Committee met in late April to hear details of Raiders owner Mark Davis’s plan to move the team from Oakland, it also heard enthusiastic support for the project from Las Vegas Mayor Carolyn Goodman and retired international soccer star David Beckham. Their conclusions sounded far more like cheerleading than sober financial analysis, and that’s only part of the problem with the concerted effort to push through the stadium approval. One local observer said the gathering was “a pompom and marching band short of starting a pep rally.”

And an expensive one at that. At this stage, it’s easy to bend the financial realities like Beckham. Cheering along the parade route is the simple part. For officials pausing long enough to consider such things, the greater hurdle is balancing the needs of a community with underperforming schools, increasing crime, and challenged infrastructure with the desires of its sports fans and local billionaires.

The stadium deal recently added the vocal public support of casino billionaire Steve Wynn, who helped craft the idea with Adelson more than three yeas ago. Wynn fell short of admitting he’s willing to invest in the deal, but enthused to entertainment columnist Norm Clarke, “Well, Sheldon and I are both very strong supporters of it, and how it plays out is something we’ve got to see… the one thing that Las Vegas should have in its arsenal that’s missing is a great stadium and an NFL team.”

Although Davis said the team was willing to ante up $500 million for its end of the deal, even a cursory check of the numbers reveals the total includes a $200 million loan from the league. The Raiders have been frustrated for years in their attempts to see a new stadium built in Oakland, a city with formidable financial woes and no extra cash for such extravagances. While Las Vegas tourists would largely be responsible for paying room tax dollars used for building the stadium, the Raiders’ end of the deal would go toward construction of its near-Strip headquarters, locker rooms, a practice facility, and even an income-generating Hall of Fame.

The stadium push comes at a moment some consider intriguing given the fact the LVCVA, long in the sights of Adelson’s casino company, owns the Venetian and Palazzo resorts on the Strip that rely heavily on convention traffic at the massive Sands Expo center. The convention authority made an unprecedented decision in February 2015 to spend $190 million to purchase and demolish the careworn Riviera Hotel to clear the way for a planned $2.3 billion Las Vegas Global Business District.

The deal would be a score for Sands and Majestic, which at least preliminarily would have only $150 million invested on the front end and enjoy a public subsidy that would rank among the largest in NFL history.

 

Clark County Commissioner Steve Sisolak has been one of few public officials vocally skeptical of the stadium plan. Although he says he’s “a huge sports fan” and knows there’s vast support from local Raiders fans, “I don’t think the stadium is viable without an NFL team.”

And while Davis has shown the Sands stadium option is more than a negotiating strategy to win concessions from officials in cash-strapped Oakland, for all its glitz and visitors a Las Vegas franchise would rank as a small market in the NFL.

Sisolak is clearly looking for at least a discussion of revenue sharing and a better deal for a community still recovering from recession. “If the public is going to put up half the money, I don’t think it’s fair to say the team gets the concessions, parking, naming rights and so on,” the commissioner said. “That’s not a very good deal for the taxpayer… I understand why football fans want a stadium at any cost. I want the Raiders, but I don’t want the stadium at any cost.”

The history of public-private sports stadium partnerships has become such a common scandal it plays tired in the headlines. Tales and broken promises of lusty economic boosts, job opportunities, and community redevelopment litter the national playing field. That side of the story, however, to date has received precious little analysis in the Las Vegas Review-Journal, which the Adelson family secretly purchased in December for $140 million—twice what the state’s largest daily was worth. It immediately set skeptics to wonder why a fellow so business savvy would overspend. Some increasingly wonder whether carving out the stadium deal and undercutting the competition at the LVCVA might make the newspaper’s sale price appear a bargain.

Bend it like Beckham?

In Vegas these days, no one spins it like Sheldon.