Nevada Gov. Joe Lombardo signed into law last week a measure paving the way for the Oakland Athletics MLB team to move to Las Vegas. After a week of special sessions by the state Senate and Assembly, the Senate voted 13-8 in favor of Senate Bill 1. The Assembly followed with a 25-15 vote approving the legislation.
SB1 will give the Oakland A’s up to $380 million in public financial assistance should the team receive permission to move to Las Vegas. While the public financing debate is over, MLB still has to approve the A’s move to Vegas.
That is expected to happen in the near future. The process of the A’s actually moving to Las Vegas, however, has a long way to go.
Overwhelming majority of public against stadium deal
Nevada sports betting has included MLB games since its inception, well before online became a thing. If the A’s relocate to Las Vegas, however, it would be the first time Nevadans could wager on a home-state team.
The funding from Nevada will help the A’s pay for the $1.5 billion baseball stadium on part of the land the Tropicana Hotel and Casino has operated since 1957. The A’s will pay the remaining $1.1 billion for the 30,000-seat baseball stadium.
The bill did not receive much public support. Despite that, there was never any doubt that Lombardo would sign the bill.
“This is an incredible opportunity to bring the A’s to Nevada, and this legislation reflects months of negotiations between the team, the state, the county and the league. Las Vegas’ position as a global sports destination is only growing, and Major League Baseball is another tremendous asset for the city.”
The current public approval rating of SB1 is just 12%. The bill is opposed by 87% of the voters.
Inside the public financing deal signed by Lombardi
SB1 gives the A’s financial support from Nevada to help the team pay for a new Las Vegas baseball stadium. This isn’t exactly a direct exchange of cash.
There are three parts of financial support from Nevada:
- Up to $180 million in transferable tax credits issued by the state
- $120 million in bonds from Clark County
- A $25 million credit from Clark County for infrastructure and development costs
A’s owner John Fisher is required to put $1 billion toward the stadium before funding from Nevada would kick in.
Tax credits
The A’s could use the tax credits or sell them to another business looking to reduce their tax expenses. For example, in 2016, MGM Resorts purchased transferable tax credits at a discount from Tesla. The A’s can flip the transferable tax credits to another business for cash.
According to Treasurer Zach Conine, Nevada will see a return of $120 million if the stadium generates the projected revenue.
Bonds
The $120 million in bonds from Clark County is essentially a loan to the A’s. This will be repaid from taxes generated in the area. Clark County commissioners will create a sports and entertainment district around the stadium. The tax revenue and other fees generated in this district will repay the bonds.
Tax revenue from everything around the stadium will go toward repaying the bonds. The revenue will begin with construction and continue when the stadium opens, with taxes on tickets, concessions and more.
The Las Vegas Raiders have a similar deal as part of the financing provided by Nevada when the NFL team moved to Vegas from Oakland.
Development credit
The A’s will receive a $25 million credit from Clark County for infrastructure and development costs related to the stadium. Roads near the stadium will likely be widened and re-routed to improve access to the stadium.
Even though the A’s say 70% of the fans attending games will be locals, there won’t be much, if any, on-site parking. There should be multiple new bus stops added to the area around the stadium.
Pedestrian bridges may need to be widened for fans walking to the stadium from parking garages at nearby casinos such as MGM Grand, Excalibur, New York- New York and more.
Examining the financial upside of an A’s Vegas stadium
Funding the stadium will result in entertainment for baseball fans and jobs for Nevada residents. As previously mentioned, the A’s expect that 70% of fans at games in Las Vegas will be locals watching their local team play.
The A’s expect to create around 15,000 jobs building the stadium. Once the team takes the field in Las Vegas, the A’s expect the stadium will employ approximately 8,000 full-time and part-time workers.
One of the final sticking points before SB1 was approved was the A’s contribution to Las Vegas. The team agreed to sign a community benefits agreement.
There are 13 points in this community benefits agreement, including:
- Hiring a diverse workforce to build and operate the stadium
- Appreciation nights for certain communities like Pride and certain heritages
- Improving local baseball fields
- Creating an employee relief fund for those with financial problems
Prior to the stadium opening, the A’s will contribute $500,000 per year to causes such as healthcare access, domestic violence, veterans services and more.
Once the stadium is open, the team will donate at least 1% of annual ticket sales to the community.
