A plan to spend 0 million in public money to help pay for casino mogul Sheldon Adelson’s Las Vegas football stadium is slated to come before the Nevada Legislature this week with Gov. Brian Sandoval on board.
Sandoval called the legislature into a special session for Monday for their OK on the controversial public funding portion of the 65,000-seat domed stadium, money that would be supplied by general obligation bonds financed through an increase in the Clark County hotel room tax. The balance of the $1.9 billion project would come from $650 million pledged by a consortium led by Adelson, who is chairman, CEO and controlling shareholder of resort giant Las Vegas Sands, and $500 million from the National Football League and the league’s Oakland Raiders, who want to leave the California city to make Las Vegas their new home.
“Now is the time to capitalize on the opportunity before us to invest in Nevada’s most foundational industry, tourism,” Sandoval said in announcing the special session. “We can and must usher in a new era for tourism in the Las Vegas market.”
Normally the legislature meets only once every two years and isn’t scheduled to reconvene until February. However, stadium backers are urging quick action so that NFL owners can decide, perhaps in January, whether they’ll let the Raiders move. The November elections could be another big factor, especially if the Democrats, who are not as warm to the public funding formula, regain control of either house.
Andy Abboud, vice president of government relations and community development for Las Vegas Sands, isn’t worried. As he told The Associated Press, “The coalition that is forming behind the stadium is very strong, and I think by the time we get to the special session it will be very effective.”
Proponents say the stadium, which also would host the University of Nevada, Las Vegas football team, is the missing link in the city’s entertainment mix and will draw untapped visitor segments that will in turn spend in restaurants, casinos and shops and pump hundreds of millions of new dollars into the local economy. The core of these projections is based on the stadium hosting dozens of large-scale events a year and increasing annual visitation by a half-million people or more.
Convention, Sports & Leisure International, a consulting firm retained by the developers, say a stadium hosting 26 events annually would generate $785.6 million in economic output and $49.4 million in new tax revenue a year. Separately, a sports economist working with UNLV has estimated total economic output from 20 events at $908.9 million and new taxes at $61.7 million.
Locally based economic consultants Applied Analysis has issued more muted projections, estimating annual economic output at $620 million and $35 million annually in new tax dollars, based on the stadium hosting 46 events and drawing 451,417 new visitors. The report estimates that the stadium would create an additional 5,982 permanent jobs throughout the region, with an average annual wage of $38,500.
Critics, however, argue the projections are way overblown. They say the facility will do little to create new money and visitation but will mostly shift existing money and visitation around and in the process deter many non-stadium tourists from coming. They have a lot of support from a growing body of economists who in recent years have questioned the economic value of stadiums.
Victor Matheson, an economics professor at the College of Holy Cross, has been studying sports economics for two decades. He calls the proposed $750 million public contribution “absurd,” based on the minimal economic impact he foresees the stadium creating.
“Tourism is your big industry,” he said in an interview with news portal Vegas Inc. “What you’re going to do is take $750 million of (tourism-related revenue) and direct it toward one person’s private entertainment complex rather than public goods and services.”
Low-spending stadium visitors will displace higher-spending gamblers, he believes. Money spent on NFL tickets won’t necessarily stay in Las Vegas, he said. And when the novelty effect of the new stadium eventually wears off, attendance will fall.
“If all of these wildly optimistic things happen, it’s certainly possible the stadium makes sense,” he said, referring to the various projections. “But you have to have an unbelievable, ridiculous number of things go right.”
But Aguero contends that Las Vegas is different.
“We agree that stadiums in and of themselves are not economically beneficial for a community. They’re a public good like a park or community center. They’re a place where people can gather and come together. But in a community and economy like ours, it is very different. If we built this same stadium in Cleveland, for example, you’re not going to get the benefits.”
Clark County Commissioner Chris Giunchigliani, one of the plan’s most vocal opponents, remains skeptical.
“Stadiums never develop the economic benefit for the public that (the developers) talked about. I’m tired of people just saying that Las Vegas is unusual.”
Meanwhile, the coalition supporting the project was down one important element last week when Majestic Realty Co. said it was out. Craig Cavileer, a member of the executive team of the company, said it had become apparent that the stadium was a legacy project for Adelson. His company was under the impression it was a corporate project.
Majestic Realty has proposed a previous plan for a UNLV football stadium, but had been absent from recent pubic meetings to discuss the current stadium plan.
