A’s struggle in Carson City as Golden Knights advance to Stanley Cup
(Nevada Current) The legislative spotlight Monday night was meant for the Oakland Athletics, but it was the Vegas Golden Knights, vying to advance to the Stanley Cup Finals, that garnered the positive vibes in Carson City.
“Go Knights, let’s get it done tonight,” said Steve Hill, president of the Las Vegas Convention and Visitors Authority, as a hearing began late on Memorial Day on Senate Bill 509, Gov. Joe Lombardo’s bid to award up to $380 million in incentives, bonds, and transferable tax credits from the state and Clark County toward the construction of a $1.5 billion, 30,000-seat major league baseball stadium for the A’s where the Tropicana now stands.
But unlike the A’s proposed stadium, or Allegiant Stadium, which Hill oversees in his role on the Stadium Authority board, the VGK and its home, the T-Mobile Arena, receive no public money.
Opponents of the measure pleaded with lawmakers not to award public financing “to a California billionaire” while inadequately funding essential services such as education and mental health. The A’s team is owned by John Fisher, heir of the family that owns the Gap clothing stores.
Assemblywoman Michelle Gorelow, a Democrat, addressed what she called “the elephant in the room. We’ve got a lot of constituents emailing us. ‘Don’t give our money to a ballpark.’”
“To regular citizens who are going to work every day, this doesn’t make sense to do a second publicly funded stadium,” Senator Dina Neal, a Democrat from North Las Vegas, said during the marathon joint hearing of the Senate Finance Committee and Assembly Committee on Ways and Means. The Legislature approved $750 million in public funding for Allegiant Stadium during a 2016 special session.
Neal noted the incongruity of “having a conversation and discussion around funding a stadium, but yet we don’t have enough revenue to give a 20% increase to teachers in the state of Nevada.” She added Clark County officials recently testified the county has a structural deficit and “can’t take care of foster care…”
Jeremy Aguero, a principal of Applied Analysis and consultant to the A’s, told Neal that Allegiant Stadium will have principal and interest payments on its bonds of about $36 million this year but will generate more than $70 million in tax revenue. “That means there is more money that goes to school construction. There’s more money that goes to teacher salaries as a result of the investment.”
Clark County Commission chairman Jim Gibson testified the county’s “commitment to issue $120 million in general obligation-backed bonds was not considered lightly.” The county will spend about $25 million to improve the area around the stadium.
Hill called the proposed facility the “most walkable stadium of any in the world,” and estimated a third of attendees will walk.
The A’s stadium is expected to generate about $360 million a year in revenue for state and local governments,
“If we’re going to have a state-of-the-art stadium, I want to have a state-of-the-art community benefits plan,” said Assemblyman Howard Watts.
Hill said unlike Allegiant Stadium, which has a community benefit plan, the A’s would have a negotiated agreement that would include a provision requiring that 15% of construction be awarded to local subcontractors.
In the event the stadium overperforms, a “waterfall” of repayment and community benefit mechanisms would kick in, Aguero said, including approximately $5 million for a vaguely-described “resort corridor for the homeless.”
“Are you going to make sure they (the homeless) don’t stay there?” asked Sen. Robin Titus, a Republican.
Aguero said he was unsure how the money would be spent or how much would be available. “The project will have to overperform for those dollars to make it into that account,” he said.
Overperformance may be a reach. The A’s, the last-place team in their league with a record of 11 wins and 45 losses, lack the legacy of the Raiders. Nor do they enjoy the good will bestowed on the VGK.
“I’ve got family that live in the area,” Assemblywoman Danielle Monroe Moreno said of Oakland. “They hate the A’s. What did they do for the community? The Golden Knights didn’t cost us a dime. Apples and oranges.”
T-Mobile Stadium, home of the VGK, was built by MGM Resorts International without public funding.
“We can better spend that money on firefighters, teachers, and policemen,” Knights’ owner Bill Foley said in 2017.
Assembly Speaker Steve Yeager noted a successful project requires “a competitive, winning team,” and asked whether Aguero’s projections rely on locals attending the games. Aguero says the projections anticipate that about 70 percent of attendees will be local. He said the team intends to “drive scarcity” and achieve a higher occupancy rate by building the smallest baseball arena in the nation.
Lombardo’s chief of staff, Ben Kieckhefer, testified Las Vegas has proved itself as a professional sports town. He said the proposal is fiscally sound, does not raise taxes, and noted the team’s owners are investing more capital than any team in baseball.
“If this team wants a stadium, their billionaire owner can build it with his own money and not use our public dollars, like he promised to do over and over to the city of Oakland,” Annette Magnus of Battle Born Progress told lawmakers. “I also would like to know where the A’s management is tonight and why they are not here since we’re discussing Nevadans giving them this handout.”
$380 million or bust
The A’s, which are drawing less than 9,000 fans a game – the worst in major league baseball “by a wide margin” according to Sports Illustrated – will “look at other cities,” said Hill of the LVCVA, if Nevada refuses to pony up the public financing.
The project relies on a “broad cross-section of taxes generated solely by the project,” according to Aguero, that will “flow into the sports entertainment district” and offset the bonds. Additionally, the A’s would receive up to $180 million in tax credits, which the A’s can sell to other companies to offset their tax liabilities.
State Treasurer Zach Conine said the revenue generated by the stadium will be twice its debt service, greater than the 1.5 times debt service of Allegiant Stadium.
Hill noted the baseball season, which stretches out over the summer, would be “beneficial to workers” because it’s “much more year-round.”
The stadium is expected to draw 405,000 additional visitors a year, who would generate $900 million a year in revenue.
Dozens of union officials and members, including many from Culinary Local 226, testified in support of the measure. The Culinary recently negotiated an agreement to unionize the facility’s workers.
Aguero said the stadium is projected to generate 14,639 direct, indirect, and induced “person- years of employment” during its four years of construction, with wages of $898 million.
State lawmakers who voted in 2016 to sink $750 million into Allegiant Stadium said at the time they were sold on projections for the construction jobs the project would generate — 11,000 direct “person-years of employment” to build the stadium itself.
“My question was not answered,” Assemblywoman Sarah Peters said as she pressed Hill and Aguero for Allegiant’s actual direct construction employment data. They did not provide it.
According to data from the Stadium Authority, Allegiant’s construction resulted in 2,719 full-time equivalent jobs, or approximately 900 in each of the three years of construction, far less than the projected number.
The baseball arena is projected to employ about 8,010 people a year, directly and indirectly, with wages of $437 million and annual economic output of $1.3 billion.
Bally’s, which owns the land slated for the development, intends to donate the nine acre parcel. Additional development is expected on the surrounding land.
As was the case with the Raiders, the As financial dealings would be confidential under a provision of the bill.
The bill’s presenters said the MLB may vote on the A’s relocation bid next month. The first game, if the proposal is approved, would take place in Spring 2028.