The jail and courthouse that’s planned for the Oakland Raiders Las Vegas NFL stadium might be the right thing to have considering what should be the criminal act of allowing a stadium hotel tax rate that’s not large enough to cover bond debt, thus eventually soaking Clark County taxpayers with paying for the shortfall.
There is no excuse for allowing hundreds of Clark County, Nevada school employees and teachers to be laid off just to build a new football stadium, and in a city who’s very culture centers around flashing cash.
The problem posed by the giant $750 million subsidy that Oakland Raiders Owner Mark Davis and Las Vegas Sands Founder Sheldon Adelson insisted on having was known to politicians and consultants from the start of talks in early 2016 and during the meetings of the Southern Nevada Tourism and Infrastructure Committee (SNTIC).
Rather than stick with a smaller stadium subsidy of $550 million or have a stadium hotel tax rate of 1 percent, as the consultants suggested, elected officials from the Governor of Nevada Brian Sandoval to Clark County Commission Chair Steve Sisolak insisted on the higher subsidy number and the lower tax rate.
The consultants were even told by Sisolak that it wasn’t their proposal in the first place, so the lower $550 million subsidy should be removed from plans and the $750 million mark, the focus.
Then, in an effort to placate the Nevada Legislature, a stadium hotel tax rate of less than one percent was asked for by the same elected officials – first as low as 7-tenths of one percent, then eventually set at 88-100ths of one percent. And, according to Jeremy Arguelo, the staff for the Las Vegas Stadium Authority and once one of the SNTIC consultants, that will not be changed:
The SNTIC consultants used a too-low-bond-interest-rate of two percent in their spreadsheet presentation charts combined with a rosy picture of future Las Vegas hotel revenue growth to give the impression that bond debt could be paid for, when in reality an interest rate at or near three percent put the bond debt over the mark of affordability for the stadium hotel tax rate the politicians insisted on.
Now, the stadium hotel tax revenue is short of the bond debt, the Las Vegas economy is sufferring a visitor shortfall not forceen by the consultants, Clark County’s General Fund will feel the difference, and the school system’s General Fund-dependant finances will constinue to be gutted, all while a giant party goes on in that new stadium in the near future.
That stadium jail and courthouse was a good idea – Clark County taxpayers may wind up putting the elected officials who pushed for this failed financing plan in it.
Stay tuned.