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

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Watchdog is muzzled

For decades the Las Vegas newspaper aggressively fought for transparency in state and local government affairs, pressing for stronger public records and open meetings laws and urging vigorous enforcement of those laws — even going to court itself when necessary on behalf of the public’s right to know how its money is being spent and its affairs are being conducted.

Casino executive Sheldon Adelson, who bought the paper less than a year ago, has muzzled the watchdog.

Coiled in Senate Bill 1, just passed in a special session of the Nevada Legislature to fund $750 million for Adelson’s bid to build a domed NFL stadium, is a rattlesnake, and the Las Vegas newspaper has taken no notice of its rattle.

The bill reads in part:

Sec. 30. 1. Except as otherwise provided in subsection 3 and NRS 239.0115, 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, which is in the possession of the Stadium Authority, if the person providing the information:

(a) Submits a request in writing that the record or other document be kept confidential by the Stadium Authority; and

(b) Demonstrates to the satisfaction of the Stadium Authority that the record or other document contains proprietary or confidential information.

2. If the Stadium Authority determines that a record or other document contains proprietary or confidential information, the Chair of the Board of Directors shall attach to the file containing the record or document:

(a) A certificate signed by him or her stating that a request for confidentiality was made by the requesting entity and the date of the request;

(b) A copy of the written request submitted by the requesting entity;

(c) The documentation to support the request submitted by the requesting entity; and

(d) A copy of the decision of the Stadium Authority determining that the record or other document contains proprietary or confidential information.

3. Records and documents that are confidential pursuant to this section:

(a) Are proprietary or confidential information of the requesting entity;

(b) Are not a public record; and

(c) Must not be disclosed to any person who is not an officer or employee of the Stadium Authority unless the requesting entity consents to the disclosure.

So, not only do all the profits accrued by the “public” stadium go solely to the private investors, but the taxpayers will never know just how much that is — or much of anything else for that matter.

Will the Assembly sell out the taxpayers for the casino owners?

Possibly today we will find out whether the principles of the Republican Party — small government, lower taxes and free enterprise — have been sold out in Nevada, bought and paid for by the billionaire casino owners who want the public to foot a major part of the bill for an amenity to fill their hotel rooms.

On Tuesday, during a special session of the Legislature in Carson City the Senate voted 16-5 for Senate Bill 1 to raise room taxes in Las Vegas to pay for nearly 40 percent of the cost of a  new domed football stadium to house the Oakland Raiders and the UNLV football team and to expand the convention center.

They took the day off Wednesday for Yom Kippur but reconvene today with the focus on whether 28 Assembly members — a required two-thirds majority — will also approve SB1.

SB1 hikes the Clark County room tax rate by 0.88 of a percentage point to fund $750 million of the potential $1.9 billion, 65,000-seat stadium.  The bill also adds 0.5 of a percentage point to the room tax to raise $400 million toward a $1.4 billion upgrade of the Las Vegas Convention Center.

The stadium is being pushed by casino and newspaper owner Sheldon Adelson who promises to shell out $650 million from his rather deep pockets to pay for construction.

Oddly enough, as an alert reader has pointed out, SB1 includes a section creating a special oversight committee for the convention construction aspect of the bill, even though there already is the Las Vegas Convention and Visitors Authority.

Adelson has long opposed the expansion of the publicly funded convention center, contending it unfairly competes with his privately owned Sands Convention Center.

The Oversight Panel for Convention Facilities would consist of five “members who are executives or directors of construction for a resort hotel in the County and who have experience in managing the design, engineering, cost-estimating and construction of commercial conference or convention facilities” and two members who have experience in the financing of capital projects in the state.

Would this redundant oversight panel have veto power over the convention expansion? Might Adelson be able to stack the panel with his experienced executives? Is this a poison pill?

The bill, in fact, says if the oversight panel disapproves a request for a project it would require a two-thirds majority of the convention center board to override that decision.

Just how Machiavellian is Adelson?

Also, pay no heed to the fact that the Nevada Constitution specifically 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.”

That’s why it is being touted as a “public” stadium even though all the profits go into private hands.

Protesters oppose stadium funding.

Protesters oppose stadium funding.

 

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?

 

Editorial: Lawmakers should reject public funding for football stadium

Stadium rendering via RJ

Billionaire casino and newspaper owner Sheldon Adelson is threatening to take his football and go home if Nevada legislators don’t raise room taxes in Clark County to provide $750 million toward construction costs of his proposed $1.9 billion domed football stadium that would become home to the Las Vegas Raiders and UNLV football teams.

To which we reply: Don’t forget your ball on the way out, Sheldon.

At a meeting of the Southern Nevada Tourism Infrastructure Committee this past week, Las Vegas Sands President Rob Goldstein, who indicated he was speaking on behalf of Sands owner Adelson, reportedly said, “Not to be difficult, but we’re not negotiable. If we can’t get 750, we respectfully thank you but we’re going to move on.”

According to press accounts of the meeting, various stadium supporters went out of their way to emphasize that the tax would be paid by tourists and not residents and the room tax would increase by just less than 1 percent, costing most tourists about a dollar a night.

Yes, a dollar a night 750 million times.

Money is fungible. That $750 million could be spent on a stadium or something else. According to a 2014 economic impact study for the Las Vegas Convention and Visitors Authority, $140 million of Clark County’s room tax went into the statewide distributive school account, $130 million for parks, recreation and transportation and nearly $80 million to Clark County schools. Fully 39 percent of the room tax revenues went to fund education.

By comparison, $750 million is about half the tax hike approved by the 2015 Legislature — the largest in history.

Some casino executives have warned that raising the room tax could make Las Vegas less competitive in the lucrative convention business. The Clark County room tax rate currently tops out at 12 percent, while top competitor Orlando’s rate is 12.5 percent. There are already plans to increase the Clark County rate by half a percent to pay for a convention center expansion. Adding another point to that makes the rate nearly 13.5 percent, and might result in reduced visitor volume and thus less revenue. Visitors have budgets, and money spent on rooms is not spent on gambling, dining and merchandise — all of which are taxed by the state.

Strangely enough, stadium backers are now making the pitch that the tax money would not be supporting a privately owned stadium but a publicly owned stadium.

“There’s been a lot of conversation on why are we giving money to billionaires,” Steve Hill, chair of the infrastructure committee and head of the Governor’s Office of Economic Development, was quoted as saying. “The public is not making a contribution to a privately owned stadium.”

Great, the public will be on the hook for capitalizing the project and will take the hit if the stadium operations lose money. What can possibly go wrong?

Even Adelson admitted in an interview with his own paper Sunday that stadiums don’t make a lot of money: “The amount of money that can be made by this stadium is so small that we [Las Vegas Sands], as the largest gaming operator in the world, make that same amount of money in one or two days, maybe three sometimes.”

The stadium proponents want the governor to call a special session of the Legislature in September to pass the tax hike and create a public stadium board of directors, though some lawmakers reportedly want to wait until after the November election.

Not that anyone is trying to sway them, mind you, unless you find nefarious motives in a leaked email from an editor to reporters covering legislative races for the Adelson owned Las Vegas Review-Journal. The email, posted online by political blogger Jon Ralston, reportedly instructs reporters to ask candidates whether they support using room tax money to build a stadium, but also pointedly states that this information will not be published. Then why ask, pray tell? To determine to whom contribution checks should go?

Also, football teams are quite fickle. The Raiders moved to Los Angeles in 1982 and back to Oakland in 1995. Oakland is still paying for the stadium renovations completed to lure the Raiders back. Now the team owners are courting Las Vegas for a new home, at least until the paint on a new stadium begins to fade and before the mortgage is paid off.

“NFL stadiums do not generate significant local economic growth, and the incremental tax revenue is not sufficient to cover any significant financial contribution by the city,” says Roger Noll, an economics professor at Stanford University.

Public funding for football stadiums is a notoriously bad economic investment — creating part-time, minimum wage jobs that are more of a drain on a state than a boost.

Nevada lawmakers should take a pass on this terrible sports bet.

A version of this editorial appeared this week in some of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel,  Sparks Tribune and the Lincoln County Record.

Update: An RJ editor now says the paper always intended to publish the answers by lawmakers as to whether they support public money for a stadium.

Finally, having two newspapers in one bag fills in both sides of the story

Sheldon Adelson (R-J file photo)

Ronald Reagan said during a 1980 primary debate in New Hampshire, “I am paying for this microphone.”

Las Vegas Sands Chairman and CEO Sheldon Adelson is paying for his microphone, which happens to be a front-page printed news story in the Las Vegas newspaper today and the lede position of the paper’s website for the dissemination of his “statement” calling on fellow casino executive MGM Resorts International Chairman and CEO Jim Murren to support his proposed football stadium, apparently along with a big chunk of public funding. The current request stands at $750 million via room tax rate hikes.

The obligatory disclaimer at the end of the story reveals: “The Review-Journal is owned by the family of Las Vegas Sands Chairman and CEO Sheldon Adelson.”

The R-J dutifully reported this morning, “Murren declined to respond to Adelson’s comments Monday, but Murren is on record as favoring the stadium if less public money is contributed to the project.” The Adelson statement reportedly disputes what it describes as  “Murren’s position” — that a convention center expansion is a “must-have” tourism addition, while a stadium would be merely “nice to have.”

The Oakland Raiders have expressed an interest in relocating to Las Vegas if a stadium is built.

But, as Mark Twain is incorrectly credited with saying, “If you don’t read the newspaper, you’re uninformed. If you read the newspaper, you’re misinformed,” only in this case you have to read two newspapers to be fully misinformed.

You see, delivered in the same bag on the driveway today is the Las Vegas Sun section, which happens to have a front-page story on how Murren views a number of topics, including the proposed stadium. The piece was actually posted online this past Friday, but not deemed worthy of print until today.

The article recounts:

Murren said that, as a football fan, he would love to see an NFL team in Las Vegas and that some level of public funding is appropriate. However, he said he doesn’t have enough information to be able to say what that level should be — the cost of the stadium, other infrastructure costs, how the capital will be pulled together, or what the burden is on the taxpayer.

“Without all that information it’s difficult to say I’m a big fan,” Murren said.

Plus, he said that he chafes at the suggestion that the public wouldn’t be paying for the stadium by virtue of tourists covering the room tax, since a significant chunk of the money goes toward education as well as other funds across the state.

The paper said Murren supports a special session of the state Legislature to approve a room tax hike to pay for the convention center expansion. He also was quoted as saying he does not want to raise the room tax so much that it becomes a disadvantage in competing with other cities for conventions.

In December, as Adelson was taking control of the newspaper, the R-J published an editorial explaining how his ownership might alter some of the newspaper’s long-standing editorial positions. It included this observation about the convention center expansion plans:

Mr. Adelson considers the convention authority, which is funded by room taxes and operates the Las Vegas Convention Center, a publicly subsidized competitor to his company’s Sands Expo and Convention Center. His company opposes the authority’s $2.3 billion convention center expansion plan. The Review-Journal supports it.

Potential change in position: Complete reversal.

Looks like the battle of the casino titans will be played out on the microphones each chooses.

Jim Murren (Sun file photo)

 

 

Dueling polls but not dueling newspapers on question of stadium funding

On Thursday the morning newspaper and VegasInc reported on polls conducted by MGM and the Sands on the topic of public support for a new stadium and/or a convention center. Today the Sun insert in the morning paper printed a version of the VegasInc story.

“Las Vegas Sands, which commissioned Washington-based Morning Consult for its poll, said 70 percent of Nevada voters support relocating an NFL team to the Las Vegas area, with 60 percent supporting construction of a retractable-roof stadium funded by room taxes,” reported the Review-Journal, which dutifully noted that it is owned by the family that owns the Sands.

VegasInc related:

Morning Consult said its poll found that 67 percent of Nevada voters backed relocating an NFL team to Las Vegas, and 62 percent supported building a “new retractable roof stadium for football and other events” in the area.

“There is majority support for a new stadium among men and women alike, across all age groups, and at all income levels,” the Morning Consult statement said. “Moreover, nearly six in 10 (55%) Nevadans are more likely to support building a new stadium if much of the funding comes from a room-tax paid by visitors.”

Indeed, a document posted at morningconsult.com shows:

roomtax

But it also asked this question, which does not appear to be reported by either newspaper:

funding

Today’s R-J, reporting on a committee meeting discussing tourism funding says the current stadium proposal is for $780 million in public funding and $420 million in private funding, “though Las Vegas Sands has said those numbers are not final and are likely to change.”

Sands rendering of Stadium posted on R-J website.