For over 50 years, Bloomberg Tax’s renowned flagship daily news service, Daily Tax Report® has helped leading practitioners and policymakers stay on the cutting edge of taxation and...
Oct. 11 — The NFL’s Oakland Raiders, as a condition of relocating to Las Vegas, would be required to sign a 30-year stadium lease, to have “financial skin in the game,” as one official put it.
The team would be subject to a lawsuit if it were to break the lease.
That is one provision contained in Nevada’s proposal to use room tax hikes to build an NFL-ready, 65,000-seat stadium for the Raiders. New details were unveiled Oct. 10 during the first day of a special legislative session called to consider the stadium proposal and how to fund it.
Questions continued into Oct. 11, as taxpayers expressed opposition to the public financing provisions, claiming that the deal would put them on the hook if revenue didn't match expectations.
The stadium, as well as a proposed expansion of the existing Las Vegas Convention Center, are critical for Las Vegas to maintain its place as an international tourism and convention destination, said Steve Hill, director of the Governor’s Office of Economic Development and chairman of the Southern Nevada Tourism Infrastructure Committee created by Gov. Brian Sandoval (R). Hill and Sandoval both back the proposal.
Total maximum investment in the stadium and convention center is $1.17 billion, or $750 million for the stadium, and $420 million for convention center. The stadium’s fate is expected to be decided by the 63 lawmakers by week’s end.
If the Raiders relocated, it would be the second professional sports team to move to Las Vegas in the last year—an expansion National Hockey League team is scheduled to open play in 2017-18.
S.B. 1 is the major legislative vehicle for the proposal.
Hill walked senators through the particulars of the bill, how much it would raise, and protections for Clark County taxpayers who could be left holding the bag if the economy tanks and room taxes become insufficient to cover the debt.
According to Hill, the stadium/convention center project would create 14,000 permanent jobs on site and in the community with the average annual wage projected to be $39,000.
The terms state that the Oakland Raiders must commit to Vegas before the stadium is built. Hill said: “It’s not ‘build it and they will come.'”
The NFL would be required to pay rent to use the Vegas stadium, subject to negotiations that would probably result in $2.5 million to $3 million for 10 games each season.
The state’s modified business tax would be levied on NFL players’ salaries. Hill estimates it could conceivably be $1 million to $1.5 million per year.
S.B. 1 calls for a 0.88 percentage-point room tax increase in the Clark County, Nev., room tax to finance $750 million in bonds over 30 years for the stadium.
Another 0.5 percentage-point room tax increase would finance $400 million of a $1.4 billion upgrade and expansion of the Las Vegas Convention Center.
The family of Sheldon Adelson, Las Vegas Sands Corp. chairman and chief executive, pledges $650 million toward the deal. The Raiders have committed $500 million. The Adelsons would cover any cost overruns.
S.B. 1 would require a two-thirds majority vote in both chambers.
During the Oct. 10 hearing, the plan also received support from some of the state’s casino operators.
Steve Wynn, chairman and chief executive of Wynn Resorts Ltd., and Jim Murren, chairman and chief executive of MGM Resorts International, were among the big names testifying in favor of the multibillion-dollar projects.
An influential group, the Nevada Taxpayers Association, changed its position on the stadium deal from opposed to no official position.
The project has gained visibility—and controversy nationally—over the use of public financing.
Indeed, criticism of the project appeared to run high among the public in two days of hearings. Citizens showed up to voice their opposition during a video conference between the Legislature in Carson City, the state capital, and participants in Las Vegas.
To contact the reporter on this story: William H. Carlile in Phoenix at firstname.lastname@example.org
To contact the editor responsible for this story: Ryan C. Tuck at email@example.com
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)