Assumption of a national brand … the Raiders rather than the Dallas Cowboys may soon be America’s Team
The history of this deal has many issues none the least of which is the informal economy of wagering in a sport that penalizes wagering.
Las Vegas apparently can now afford the luxury of being the brand that might intersect the real interests of the NFL considering that 31 of 32 owners voted for it, and it was clear that the benefits to the Oakland community were always expendable, even as the rationalizations emerge, like the Raiders “being closer to Los Angeles” and its fans from its time there.
- Some cities forego future property tax revenue for a pro stadium, or
- issue tax-free bonds paid off by the teams themselves, or
- contribute complimentary infrastructure like utility work or a nearby train station.
But Las Vegas will pay for the thing itself—and with a tax on hotel rooms, something it already has. (Bonds will be repaid over 30 years with the tax revenue.)
The state’s figures to justify that new tax are… ambitious.
- Its forecasts suggest 450,000 new visitors every year drawn by the 65,000-seat stadium, spending an average of 3.2 nights per visit.
- About a third of tickets are supposed to be purchased by tourists, although no other city manages 10 percent.
- Why half a million people would fly across the country to watch a team that no one wants to pay $20 to see in Oakland is not clear.
A reminder from Brookings’ big September report on taxpayer subsidies for stadiums:
A tax on hotel rooms at first seems to be an affair for the tourism industry.
Hotel owners testified in its favor.
And so we have a battle between two interconnected ideas:
- Taxes go up, tourism goes down.
- Stadium goes up, tourism goes up.
But it’s not just a problem for the tourism industry.
It’s true that the Clark County room tax was originally intended to fund bonds for the Las Vegas Convention Center in the ‘50s, and continued to support the Las Vegas Convention and Visitors Authority, the marketing arm of a city that lives and dies on marketing. (They are responsible for the “What Happens in Vegas” campaign.)
But these days, about half the room tax goes to support state schools and county transportation. So if the new tax on hotel rooms directed to the stadium does drive room prices down, the money comes out of schools and buses. In fiscal year 2015, a quarter of the tax paid for Nevada education, another 14 percent for the Clark County School District, and 9 percent for Clark County Transportation.
“So much of this action was premature and rushed through,” Chris Giunchigliani, the lone dissenting official on the Clark County Commission, told the Las Vegas Review-Journal after the measure was approved in November.
“It’s bad public policy to take public tax dollars, especially the largest subsidy (for a stadium project) in the United States, and claim it’s going to benefit economic development.”
- Schools : we need $10M to upgrade facilities and get better equipment
- Politicians : sorry, we're broke
- Residents : the roads are a mess, can you fix them? And we could use some more cops.
- If occupancy rates and room prices are resilient to tax increases, then Nevada might otherwise have funneled that money into solving the CCSD’s chronic teacher turnover problem. But maybe the teachers will be more excited to stay in Las Vegas when the Raiders (who have not won a playoff game since 2002) come to town.