Las Vegas Councilman Bob Beers Says Stadium Study Has A $4 Million Shortfall
Backers of a proposed $200 million soccer stadium in downtown Las Vegas are facing more questions about its balance sheet.
Las Vegas Councilman Bob Beers has asked city officials to look into what he is calling a “$4 million hole” in a 104-page stadium feasibility study given to council members on Sunday.
“A new detailed pro-forma income statement just released by #MLS2LV appears to have a $4 million ‘hole’ that will turn the stadium’s promised profit into a loss, and likely leave city taxpayers on the hook,” Beers said in a post on his blog.
The document was prepared by AECOM and paid for by The Cordish Cos. The report is dated Aug. 20, but was not sent to the seven-member city council until Sunday. Broken down in the report are the stadium’s first five years of revenues and expenses.
For 2017, the stadium’s first year of operations, more than half of the stadium projected revenues comes from rent of $4.46 million. The next closest revenue generator is parking with $1.15 million, with total operating revenues of $8.31 million in 2017.
“We assume that the (Major League Soccer) team will play a flat rent of $3.5 million per year, and that rent from Major Soccer Matches will be paid to the MLS team rather than the stadium entity,” according to the statement. In other words, the stadium is the landlord and the teams are the tenants, or renters.
Beers said the $3.5 million figure is the same amount the city has earmarked for helping to pay back the general obligation bonds. Las Vegas expects to borrow almost $120 million to help fund stadium construction, guaranteed by the city’s general fund revenue. Beers noted in his post that bond repayments are about $7 million per year for the first 10 years, before increasing to $8 million per year for the next 20 years.
Justin Findlay, managing partner of Findlay Sports & Entertainment was unavailable for comment. Findlay Sports and The Cordish Cos. have reached a deal with city staff on a nonbinding proposal to build a $200 million, 24,000-seat soccer stadium in Symphony Park downtown for an MLS team. The group is also lobbying the MLS to award and expansion team to Las Vegas.
The Cordish-Findlay proposal will go before the city council on Oct. 1.
Beers said the pro-forma income statement does not have expense line for a $4 million loan payment. They spend $6.5 million in the first year on salaries, utilities, repairs and maintenance, insurance and other expenses, leaving the stadium with a $1.74 million profit. Adding the loan repayment to the pro-forma would turn the stadium’s modest profit into a loss of $2.3 million in its first year, just over $2.3 million in year two, before decreasing to $1.2 million year five.
Beers said any loss would be covered by taxpayers. Meanwhile, gaming industry entrepreneur and hedge fund CEO Jason Ader is heading another group of investors looking to build a stadium and a field for the league's 24th team. Ader talked about his stadium plans and whether soccer would work in Las Vegas last month on KNPR’s State of Nevada.
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