Las Vegas loves to do big things. They love their casinos, and they really love handing over millions of taxpayer dollars to rich owners of professional sports teams. With the most recent news of the Oakland A’s wanting taxpayer money from the city of Las Vegas, I thought I would quickly go over some of their most recent deals to build sports teams a new home. To be fair to Las Vegas, they haven’t followed through on ALL of these stadium ideas. Still, they have spent quite a bit of public money on sports buildings and could have even spent more if they had gotten more reckless with taxpayer money.
Recently, the Oakland A’s announced that they had acquired land in Las Vegas and intended to relocate there. Considering the owner of the Oakland A’s is well known to take “cheapness to another level”, I was curious how much money the A’s would want from Las Vegas. Now we have somewhat of an answer thanks to the Las Vegas Review Journal, who wrote an article on the A’s wanting at least $500 million in public money from the city/state. However, the Las Vegas Sun has also reported that the A’s want two extra revenue streams using taxpayer money. They want not only additional “transferrable tax credits”, but a third level of public money through “development tax incentives”.
Both articles in the Review-Journal and Sun mention several important aspects of the deal:
- A’s propose getting the money through special tax districts
- A’s are willing to put $1 billion of their money to make the “project work”
- A’s President believes that this “public-private partnership” is a “win for everyone” and “create(s) economic value to the community”
- A’s want a number of tax credits and tax incentives.
Here are my responses to these statements:
- TIF (Tax-Incremental Financing) Districts rarely, if ever, end up working for the local community
- The A’s will not put in anywhere near $1 billion of their own money into the ballpark, nor will they spend that type of money on nearby real estate. They will want even more public money for this.
- Vegas taxpayers are receiving nothing direct from this deal, so the idea that it is a partnership or creates any sort of economic value is laughable.
- Like the Raiders, they want as many tax credits, abatements, or exemptions as they can possibly get. None of which will help the area economy.
Las Vegas 51s or now-known as Aviators
All of this comes just several years after Las Vegas gave its minor league team $80 million in taxpayer money for so-called naming rights when the team was moving into a new ballpark in 2019. I say so-called naming rights because this clearly was a way to subsidize the new ballpark without actually doing it so publicly. The naming rights run for 20 years, and some city council members defended doing such a deal.
One of the two city council members who voted down this deal did so because he wasn’t provided any evidence as to how or why this would be a job-creator. But maybe they were just doing what everyone else was doing. Right? Well, about that…
“USA Today reported last year that naming rights for most minor league baseball stadiums cost $50,000 to $300,000 a year. For $4 million a year, the LVCVA could have bought naming rights for almost every one of the 15 other ballparks in the Pacific Coast League. The total cost of the six known PCL stadium-naming deals, which includes the Fresno Grizzlies’, is just $2.6 million. Four stadiums don’t even have a naming rights deal.”
– Yahoo Sports, 10/16/17
So, it is a terrible deal for taxpayers. Just call it what it is.
But arguably when it comes to sports and Las Vegas, anyone who follows sports, even if just a little, probably remembers when Las Vegas gave the Oakland Raiders $750 million in public money to relocate. This is frankly one of the worst deals ever negotiated between a city/state and a sports team. This was the largest public subsidy ever given for a sports stadium. When you factor in interest payments over 30 years, the real cost to the city/state is $1.3 billion to build Allegiant Stadium.
Neither the city nor state receives a penny in any stadium revenue under this agreement. As the Nevada Independent points out, let’s not forget that OUTSIDE of the $750 million in taxpayer money, the team ALSO RECEIVES significant tax abatements and subsidies that equal to $500,000 per year. Oh, did I mention that neither the city nor state can impose any new taxes on the team for the next 30 years? If Nevada were so bold as to treat the Raiders like every other business in the state, the Raiders could contractually relocate at will.
To be fair, the Raiders also spent a significant amount of money building this new stadium. Nevermind, the Raiders only contributed “about $50 million” of their own money.
Las Vegas has tried several times to lure a Major League Soccer (MLS) team here with taxpayer funded options. In 2015, MLS passed on putting a new team in Las Vegas due to questions and issues about the proposed new and publicly funded stadium. To start with, the amount that the city would need to provide often changed due to confusion with MLS2LV, the group trying to make the soccer team expansion happen in Las Vegas.
One request by MLS2LV had the city giving $50 million to the group. Then there was a request for the city to contribute “$3m annually for 30 years” and “$14m on infrastructure costs” and “$22m for a new Tourism Improvement District”. Not to worry, though, as the team claimed that sales taxes would cover all this. Haven’t I heard that before?
Virtually every part of this deal was terrible. When Las Vegas considered using hotel tax money to pay the $3 million annual payment over 30 years, a local official had to point out that by doing this, the city’s general fund likely had to be used as a secondary source of payment, in case hotel tax money didn’t cover it. A city’s general fund is one of their most important sources of money, since it is how that city pays their bills.
In 2016, the University of Nevada, Las Vegas (UNLV) proposed a $1.2 billion stadium with close to $800 million coming from the public. That is a lot of taxpayer money. Thankfully, the new stadium would have covered all of these public expenses. According to the developers at the time, a new stadium would provide “$600 million to $800 million in total annual economic benefit, including $200 million in direct construction wages and $300 million annually for Las Vegas resort and retail sector”.
I could not find a single piece of evidence from anywhere online about how these numbers were put together. The idea that a new stadium for a local college football team would bring in almost a billion dollars in economic benefits is frankly insane. We have seen numerous studies and stories detailing how LITTLE sports arenas, ballparks, and stadiums do for local economies. As one economist told the Investigative Post, sports homes are a “money pit for taxpayers”.