Opponents of Adelson-backed stadium get short shrift in Adelson-owned newspaper coverage

Nevadans for Common Good conduct a press conference Wednesday.

Nevadans for Common Good conduct a press conference Wednesday.

There is something to be said for fair and balanced, but …

The front page story in today’s Las Vegas newspaper recounts the press conference Wednesday in which a group calling itself Nevadans for the Common Good spelled out the reasons why $750 million in public money should not be used to build a domed football stadium for a professional football team.

The headline and first paragraph mention that a casino group, the Nevada Resort Association, claims the concerns of the opponents have already been addressed, and the first quote in the story is from the casino group, not the stadium opponents. Fully half the story is devoted to rebuttal of the opponents.

The 5-page report, “Seven Hidden Risks in the Stadium Plan,” is boiled down to a five-and-a-half-inch sidebar omitting many salient details. Though superlatives usually warrant coverage, this line was omitted: “This is the largest amount of public money in US history to build a stadium.”

The stadium is being pushed by Sands casino executive Sheldon Adelson as a future home of the Oakland Raiders and UNLV football.

The story quotes Jan Jones Blackhurst, a Caesars Entertainment vice president who spoke on behalf of the casino association, extensively.

“All of the adverse circumstances were factored in to how we structured the bonds,” Blackhurst is quoted as saying. “If there is some cataclysmic circumstance, the payment would fall back to the county but the chances of that happening are slim and none.”

Blackhurst told the paper that the room tax revenue is calculated to be 1.5 times the amount needed to pay the general obligation bonds and currently collections are 1.87 times the necessary amount.

You have to go to the sidebar to find the opponent’s noting that room taxes fell 30 percent during the recession.

Though the paper could have provided a link to the online version of the 5-page report, it did not.

Here are some key points that could have been addressed in the paper rather than the short shrift provided by the Sheldon Adelson-owned newspaper:

1. Taxpayers bear the risk of a stadium bond default.

To raise the $750 million in public funding, Clark County will issue general obligation bonds for the full amount to be paid over 33 years. Revenue to pay off this bond will come from a .88% increase in the room tax.

But, a general obligation bond is secured by a state or local government’s pledge to use legally available resources, including tax revenues, to repay bondholders. This means that our taxes will be used to cover the bond payments if the room tax revenue is insufficient. Our property taxes could be increased to pay off the stadium debt, or services could be cut.

Residents of Cincinnati have seen a public hospital sold and mass-transit investments postponed in order to pay debt on Paul Brown Stadium, home of the Bengals. …

2. There is a huge risk that room taxes will be insufficient when the next recession occurs.

Between 2007 and 2009, room tax collections went down 30 percent. For the Las Vegas Convention and Visitors Authority (LVCVA), revenue dropped from $219,713,911 to $153,150,310, due to the recession. It took seven years, until 2014, to meet or surpass pre-recession levels of collected room tax revenue. The proposed bond issue is for 33 years. What are the chances that we will have at least one other recession in the next 33 years? …

3. By not choosing revenue bonds, the Stadium Plan places the risk on taxpayers. …

Instead of general obligation bonds, there is another type of bond that could be used, a revenue bond. This is a bond supported by revenue from a specific project like a toll bridge. These bonds are used to finance income-producing projects and are secured by a specific revenue source.

If we were to use revenue bonds for the Stadium Plan, the room tax would be the source of revenue. If there were insufficient room tax revenue, the people who bought the bonds would bear the risk. By choosing general obligation bonds instead of revenue bonds, the Stadium Plan places the risk on the taxpayers instead of the investors. …

4. 33-year bonds vastly increase the cost to the public. …

We estimate that choosing 33-year bonds instead of 20-year bonds leads to over $250 million (present day dollars) in additional interest payments by the public. …

5. The stadium bonds limit Clark County’s ability to invest in other projects. …

(I)t has a huge impact on the capacity of the county to build parks and other infrastructure for an extended period of time. This is the largest amount of public money in US history to build a stadium. …

6. History shows that a stadium is a money pit. …

Taxpayers have continued to pay off debt for years after a stadium is no longer usable or even after a stadium has been demolished.

For example, the Kingdome in Seattle was in disrepair in 1994, and the city financed the millions of dollars needed to repair and update the facility with a 20-year debt payment structure, which was set to expire at the end of 2015. The facility was imploded on March 26, 2000, and the city continued to pay on the debt until the spring of 2015. …

Finally, the likelihood of cost overruns raises the issue of the 39% cap on public funding that was removed from the Stadium Plan. The $750 million public portion is 39% of the total stadium cost of $1.9 billion. Why remove the 39% cap on public money unless you’re planning to increase the public subsidy or reduce the total cost?

7. Stadium benefits are based on unrealistic projections.

The Stadium Plan projects 46 events, but a previous study of a domed stadium for UNLV projected only 21 events. (UNLV CIAB Study, Sept. 2014) Adding ten NFL games to this total still adds up to only 31 events.

In comparison, Levi Stadium in California hosted 13 third-party events such as concerts, SuperaCross, soccer matches and rodeos in its first year of existence. It has hosted 21 total events since 2014. Met Life Stadium outside of New York City has hosted an average of nine thirdparty events per year outside of NFL games.

In the Rosentraub study submitted to the SNTIC, they include the disclaimer that “too many economic impact studies for mega-events centers performed for numerous other cities and regions have a long history of projections that were never realized …

According to University of Chicago sports economist Allen Sanderson, “There are only two things you do not want on a valuable piece of real estate. One is a cemetery, and the other is a football stadium.”

The University of Denver Sports and Entertainment Law Journal had an article in their Spring 2011 issue entitled, “The Economic Impact of New Stadiums and Arenas on Cities.” The report concluded, “Taxpayers usually do not get a positive return on their investment.” …

Conclusion

The bottom line is that the current Stadium Plan is a bad deal for the public. NCG is not against a stadium per se. But, we must negotiate a better deal with more substantial community benefits to justify the level of risk and public investment.

I don’t think anyone has really answered the question as to why the 39 percent cap on public money was removed. What if the stadium costs only $1.2 billion? Will the public foot 62 percent of the cost?

 

5 comments on “Opponents of Adelson-backed stadium get short shrift in Adelson-owned newspaper coverage

  1. Bruce Feher says:

    If you like to visit LAS VEGAS or if you live in Nevada PLEASE READ and share.
    http://www.thepetitionsite.com/900/946/876/fund-it-yourselves/?taf_id=28472301&cid=fb_na#bbfb=330123216
    Don’t let the special interests get away with making tourists pay for their stadium that will only make the rich richer. NO PUBLIC FUNDING! Please sign our petition.
    The average cost of a NFL Ticket is $62.00! Not the best seats, of course. Then there is the cost of parking and Heaven forbid, if you want a drink and something to eat then the price goes up even more! What if you wanted to bring your family?
    Now the Nevada elites want to stick our much needed tourists with a $750 Million room tax to help fund this cash cow! Sooner or later our visitors will start going to other destinations and where will that leave us?
    Also check out the link below to see why the NFL loves taxpayer dollars!

  2. nyp says:

    guess the legality of those education savings accounts wasn’t quite so clear-cut, after all.

  3. John Edwards says:

    That is really disappointing, but not surprising. We knew Adelson bought th RJ as a venue to push his business and political agendas, not to give readers fair and disinterested information on public policy. He’s not the only newspaper publisher using a newspaper’s news stories to pursue personal gain. But Adelson has so many big dealings that his own interests will undoubtedly influence RJ reporting on many major public issues in Nevada.

  4. […] Stadium opponents spell out reasons why it is a bad […]

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