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Stadium Debate: How Much Are Taxpayers Willing To Pay?

AP Photo/John Locher
AP Photo/John Locher

Oakland Raiders Owner Mark Davis, center, meets with Raiders fans after speaking at a meeting of the Southern Nevada Tourism Infrastructure Committee, Thursday, April 28, 2016, in Las Vegas.

In Gov. Brian Sandoval’s order creating the Southern Nevada Tourism Infrastructure Committee, the word “stadium” appears just once.

But that word has taken center stage in the discussion because of a proposal to foist 55 percent of the stadium's cost onto taxpayers.

Last week, Oakland Raiders owner Mark Davis, with international soccer star David Beckham at his side, painted an attractive picture of what a $1.4 billion stadium would mean to Las Vegas.

Part of the proposal is that it would require $50 million a year in tax revenues for 30 years.

There are also competing demands for expanding the Las Vegas Convention Center and providing better transportation and public safety in the tourist corridor. And no matter what happens on the NFL front, the UNLV football team still needs a new home.

Finance expert Guy Hobbs is an advisor to the infrastructure committee and helped craft parts of the proposal.

Hobbs told KNPR’s State of Nevada the committee will be making decisions about the two biggest projects: the stadium and expanded convention center facilities.

“The convention and the stadium projects are eerily similar,” Hobbs said, “They’re both designed to bring people to Las Vegas.”

But if one had to get out of the way for the other, which is more important to the Las Vegas economy? Hobbs said that question is being examined by the committee.

However, Hobbs said, conventions bring people to Las Vegas during the week, while the stadium could bring more weekend tourists, who tend to spend more money.

While supporters of the stadium idea paint a rosy picture of the economic picture, critics of public-funded stadiums tell a different tale.

One of those critics is Neil deMause. He is a journalist and the author of the book “Field of Schemes”.

deMause said he understands why people want a profession sports franchise in their city. But “innumerable economists” have found stadium projects do “virtually nothing” for the city’s tax receipts.

deMause also said that in the 1980s and '90s, public funding started rolling into stadiums, but it was only a small portion and was paid back through rent from the teams. Public spending grew through the 2000s, but that trend is reversing as fewer cities are willing to pony up big taxpayer outlays.

So the proposed stadium in Las Vegas would “be a tremendous change in direction.”

One of the big selling points from supporters, including Las Vegas Sun publisher and UNLV booster Brian Greenspun, is that fans of other teams would come to Las Vegas when their teams play here.

For instance, Greenspun said he could envision fans of the Green Bay Packers coming west in the winter taking off their coats and enjoying the Southwest’s mild temperatures.

But deMause has a problem with that business model: counting on fans from other teams to boost ticket sales.

“You’ve never had a team before that has tried to mostly sell season tickets or even individual tickets to visiting fans,” he said, “That’s never happened in the history of sports that I’m aware of.”

“If Mark Davis (owner of the Oakland Raiders) wants to do that, that’s fine, it’s his money. It’s his team, but that doesn’t necessarily mean that Nevada and Las Vegas should be talking about risky their money based on that kind of gamble,” Neil deMause added.

But Hobbs and Greenspun were both quick to point out how different Las Vegas from every other city in the country -- and actually the world.

“The stadium economics have been, in my opinion, very sound for a number of years because we’re an entertainment-oriented economy," Hobbs said. "This is what we do."

Greenspun agreed and argued that building a stadium is part of the overall effort to improve the entire infrastructure for tourism. But it also must include better forms of mass transit, such as a light rail system.

“Whether we have the football team or not I think the stadium is a good idea,” he said, “Let’s fix tourism for the 21st Century then all these other things just fall into place.”

Greenspun, though, took issue with the current plan that put the public's burden for the stadium at 55 percent versus 45 percent for private financers. He noted that the private/public split for the Smith Center for the Performing Arts was more like 35 percent public and 65 percent private.

Under the current stadium proposal, $650 million would come from a partnership between Sheldon Adelson’s Las Vegas Sands Corp., Majestic Realty and Raiders’ owner Mark Davis. The remaining $750 million would come from bonds, which would be paid off in $50 million annual increments over 30 years.  Whether those tax dollars would be from an increase in the live entertainment tax or from a bump in the room taxes is yet to be decided.

John Diaz, editorial page editor for the San Francisco Chronicle, said that level of public funding would never happen in the Bay Area.

“There is no way it would fly in Oakland, San Francisco or anywhere in the Bay Area where, really, the expectation is that sports venues for very profitable franchises should be privately financed."

Diaz said the Golden State Warriors, who had the most successful season in NBA history this year, want a new arena because they say the Oracle Arena,  renovated in 1997, is obsolete.

“I think Nevada taxpayers might want to think about that when they’re going to commit $50 million a year for 30 years," Diaz said. "How long will it be before that venue will be considered obsolete?” 

Not only is he skeptical about the financing, he’s skeptical of Mark Davis.

“I would just give this cautionary note to the people of Las Vegas and Nevada who are hearing Mark Davis talk about making a lifetime commitment to Las Vegas: Don’t be swept away by this,” Diaz said. “A lifetime commitment from the Davis family is kind of like a marriage to Liz Taylor or Larry King.”

He gave the example of the city of Inglewood that paid Mark Davis’ father, Al Davis, $10 million to move there. Al Davis pocketed the money, he said, but never moved to Inglewood.


Guy Hobbs, business consultant and adviser to the tourism committee; Neil deMause, journalist, author "Field of Schemes"; John Diaz, editorial page editor, San Francisco Chronicle; Brian Greenspun, Las Vegas Sun owner/UNLV booster

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With deep experience in journalism, politics, and the nonprofit sector, news producer Doug Puppel has built strong connections statewide that benefit the Nevada Public Radio audience.