Time to end those NFL tax subsidies?

Nearly entire Raiders team sits for national anthem.

Before you poke someone in the eye, you should take your hand out of his pocket.

Michelle Malkin’s column posted at Townhall points out that those NFL players kneeling during the national anthem are doing so on turf paid for by taxpayers, not just ticket holders.

“Over the past decade, new tax-supported NFL stadiums rose up for the Indianapolis Colts (the $720 million Lucas Oil Stadium), the Dallas Cowboys (the $1.15 billion AT&T Stadium) the New York Jets and Giants (the $1.6 billion MetLife Stadium, the Minnesota Vikings (the $1.1 billion U.S. Bank Stadium), the Atlanta Falcons (the $1.5 billion Mercedes-Benz Stadium), and the San Francisco 49ers (the $1.3 billion Levi’s Stadium in Santa Clara),” Malkin notes.

She also reports that there soon will be a $2.6 billion stadium for the Los Angeles Chargers and Rams, as well as a $1.9 billion stadium for the Oakland Raiders when they move to Las Vegas. Though she neglects to point out that $750 million of that Raider stadium will be covered by room taxes, she does note that there is an $83 million taxpayer debt on two-decade-old renovations to the Alameda County Coliseum that the Raiders are abandoning.

Malkin also noted that a majority of economists say providing state and local subsidies to build stadiums for professional sports teams usually costs taxpayers more than any economic benefits.

So team players and owners are sticking it to taxpayers figuratively and literally.

If you just can’t wait till Thursday’s newspaper for Wayne Allyn Root’s predictable pro-Trump screed on this topic, it is already posted at Townhall. He argues that the NFL is committing economic suicide.

“It’s time for a nationwide boycott,” Root cheer leads. “It’s time for 63 million Trump fans to stop watching. Turn off NFL games on your TV for the next month. Watch the owners cry. Watch them panic. Watch them beg. Watch them order an end to all kneeling or disrespect for the national anthem. Watch them sing a whole new tune.”

He, too, gets around the taxpayer aspect and suggests that people call their governors and demand an end to all subsidies for the NFL.

Brent Bozell, also posted at Townhall, points out the liberal media jumped all over Trump’s tweets about the anthem kneeling equating them to racism and censorship, spurring “cowardly NFL teams” up the ante on Sunday with bigger displays of disrespect.

“The liberal media are shameless hypocrites when they polarize the country and then complain the country is polarized,” Bozell writes. “They have honored (Colin) Kaepernick as some kind of ‘star-spangled’ patriot and pushed his radical racial agenda. They have pressured the NFL and every other televised sports league to take liberal stands on everything from race to gun control to imposing transgender bathrooms.”

Local newspaper columnist Victor Joecks also weighed in on the NFL tax subsidy boondoggle today.

He noted how Gov. Brian Sandoval boasted that the Raider stadium would be a boon to the state’s economy. There were projections that the stadium would produce almost 6,000 annual jobs, total wages of $230 million and an increase of 1 million visitors annually.

“By putting taxpayers on the hook for a significant portion of the stadium’s cost, Raiders’ owner Mark Davis reduced his risk and directly benefits from a $750 million subsidy.  That makes sense for him. It never made financial sense for you,” Joecks writes. “The NFL protests are just another reminder of why government shouldn’t pick winners and losers in the economy.”

 

 

 

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How far will people have to walk to an exhibition football game in August?

The Clark County Unified Development Code states:

The regulations in this Chapter establish minimum parking requirements. The property owner shall be responsible for ensuring that adequate parking is provided for resident, guest, customer, employee, delivery vehicle parking, and/or company vehicle parking if additional spaces in excess of the minimum requirements are necessary.

A 7-Eleven without adequate parking would be rejected.

Though all animals are equal, some are more equal than others.

The 65,000-seat Raiders football stadium has parking for only 15 percent of the cars needed.

How far will people have to walk to an exhibition football game in August? Well, there are plans for a 30-foot pedestrian bridge over Interstate 15 connecting the Strip to the stadium. Yeah, that’s the $750 million ticket.

Plans for football stadium are presented to a planning board. (R-J pix)

Adelson threatens to walk away from stadium deal

According to a Reuters report out of Tel Aviv, Sheldon Adelson, casino and newspaper owner, is willing to walk away from the stadium construction deal if the Raiders don’t meet his terms.

And you thought it was a “public” stadium being funded with $750 million in room tax money.

“They want so much,” Adelson was quoted as saying. “So I told my people, ‘Tell them I could live with the deal, I could live without the deal. Here’s the way it’s gonna go down. If they don’t want it, bye-bye.'”

And why shouldn’t he? He got what he really wanted — that poison pill clause in the law that creates an oversight panel for the convention center expansion that apparently has the power to veto the whole expansion and kill the competition for his privately owned Sands Expo.

Reuters photo of Sheldon Adelson

Reuters photo of Sheldon Adelson

Newspaper column: Lawmakers hand out unconstitutional corporate gift to another billionaire

Gov. Brian Sandoval signs a bill giving public tax money to build a football stadium. (AP photo by John Locher)

Gov. Brian Sandoval signs a bill giving public tax money to build a football stadium. (AP photo by John Locher)

Meeting in special session in Carson City this past week Nevada lawmakers opened the windows and threw caution and tax money to the wind, voting to raise the room tax rate in much of Clark County by 0.88 of a percentage point in order to contribute $750 million toward construction of a 65,000-seat domed football stadium estimated to cost $1.9 billion.

The measure, Senate Bill 1, passed by the constitutionally mandated two-thirds majority in both the Senate and Assembly – 16-5 in the Senate and 28-13 in the Assembly.

The stadium is being pushed by billionaire casino and newspaper owner Sheldon Adelson who promises to shell out $650 million from his rather deep pockets to pay for construction. The National Football League and the Oakland Raiders are supposed to contribute $500 million toward construction. The $750 million public sop is the largest ever by any public entity for a sports facility in this country.

All profits from stadium operations accrue strictly to the private investors.

At one point during the Assembly hearings, Assemblyman Ira Hansen of Sparks asked what happens if the stadium comes in under the $1.9 billion estimate. Would the taxpayers still be on the hook for the full $750 million?

Steve Hill of the Governor’s Office of Economic Development, which had touted the project, replied: “Technically that’s correct.”

Before Hill could elaborate, Hansen cut him off with a terse: “Thank you.”

So, if the project comes in closer to the original estimate of $1 billion, the taxpayers will pick up 75 percent of the cost and the billionaires keep their money.

One of those testifying against the public spending for a football stadium for the Raiders was former Las Vegas City Councilman Frank Hawkins, who noted that he played seven seasons for the Raiders, including winning a Super Bowl. Hawkins said billionaires don’t need the public tax money to fund 40 percent of their stadium. He also noted that Raiders owner Mark Davis had called to try to change his mind by agreeing to no television blackouts locally for games that are not sellouts.

SB1 creates a stadium authority to build and operate the stadium, exempts the authority from any legal requirements for competitive bidding and makes just about every financial deal cut by the authority exempt from public records laws.

The bill says “the Stadium Authority shall keep confidential any record or other document provided to the Stadium Authority by a developer partner, the National Football League team or the Stadium Events Company,” if asked to do so. The public will be kept in the dark about whether their “public” stadium is providing valuable public assets to a favored few at below market value.

The Legislature certainly has the power to create exemptions to existing laws.

What it does not have is the power to create exemptions to the state Constitution. That document has a Gift Clause, which states, “The State shall not donate or loan money, or its credit, subscribe to or be, interested in the Stock of any company, association, or corporation, except corporations formed for educational or charitable purposes.”

Self-styled economic development advocates have tried three times to amend the Constitution and remove the Gift Clause. The voters rejected those attempts all three times — in 1992, 1996 and again in 2000 by wide majorities.

The state Supreme Court has said that when the state provides something to a private entity without getting adequate compensation for the value, that is a gift and thus a violation of the Constitution.

Nevada’s high court has cited an Arizona Supreme Court ruling on that state’s nearly identical Gift Clause. The Arizona court said its Gift Clause “represents the reaction of public opinion to the orgies of extravagant dissipation of public funds by counties, townships, cities, and towns in aid of the construction of railways, canals, and other like undertakings during the half century preceding 1880, and it was designed primarily to prevent the use of public funds raised by general taxation in aid of enterprises apparently devoted to quasi public purposes, but actually engaged in private business.”

Professional football hardly qualifies as even a quasi public purpose unless you include “bread and circuses.”

This was the third special session in as many years. The previous two handed out billions in tax breaks and abatements to the billionaire owners of electric car companies Tesla and Faraday Future.

Perhaps some public spirited group will ask the courts to take a look at this latest generous gift and determine whether it truly is for a public purpose.

A version of this column appeared this week in many of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel and the Lincoln County Record — and the Elko Daily Free Press.

Update: Space was insufficient to provide this quote from a Nebraska court ruling:

“Every new business, manufacturing plant, or industrial plant which may be established in a municipality will be of some benefit to the municipality. A new super market, a new department store, a new meat market, a steel mill, a crate manufacturing plant, a pulp mill, or other establishments which could be named without end, may be of material benefit to the growth, progress, development and prosperity of a municipality. But these considerations do not make the acquisition of land and the erection of buildings, for such purposes, a municipal purpose. Our organic law prohibits the expenditure of public money for a private purpose. It does not matter whether the money is derived by ad valorem taxes, by gift, or otherwise. It is public money and under our organic law public money cannot be appropriated for a private purpose or used for the purpose of acquiring property for the benefit of a private concern. It does not matter what such undertakings may be called or how worthwhile they may appear to be at the passing moment. The financing of private enterprises by means of public funds is entirely foreign to a proper concept of our constitutional system. Experience has shown that such encroachments will lead inevitably to the ultimate destruction of the private enterprise system.”

This and the Arizona court ruling were cited by the the Nevada Policy Research Institute’s Center for Justice and Constitutional Litigation in its case against the Governor’s Office of Economic Development for handing out state gifts to companies such as SolarCity.

 

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?