ONN – Las Vegas Stadium Authority Has Budget Deficit As Of July 2019 Agenda
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The Las Vegas Stadium Authority is running a budget deficit of a quarter-of-a-million-dollars according to the latest report issued before the July 18th meeting of the group formed to build the Oakland Raiders and University of Nevada-Las Vegas new domed stadium.
The overall budget (or expected) revenue is at $111,405,016 versus actual revenue of $111,163,348, for a difference of a negative -$241,669 or two-tenths of one percent.
That marks the first time in the short history of the Las Vegas Stadium Authority that there has been so much of a shortage in expected hotel tax revenue that the organization could not avoid the truth that it was not taking in enough money.
According to the latest report, monthly revenue by jurisdiction is down in the largest areas of Las Vegas Valley represented in the area of hotel tax collection controlled by the Las Vegas Stadium Authority: Clark County, Las Vegas, and Henderson, and at 4.2, 4.5, and 4.1 percent for March when 2019 and March 2018 are compared.
Why Does This Las Vegas Stadium Authority Revenue Problem Exist?
So, why does this Las Vegas Stadium Authority revenue problem exist? The answer is that after a ten-year pattern of year-over-year growth in visitors to Las Vegas, the party happened to stop in 2017, the same year the NFL approved the Raiders to move from Oakland to Sin City, and the same year the Clark County Stadium Hotel Tax started to be collected and tallied.
The Raiders, then, were and still are, the victims of very bad timing. The drop of visitors and the resultant depression in stadium hotel taxes collected was something that was structural.
To put it simply, today, anyone living in any city in America is at most one-hour from a casino. That hurts Las Vegas. Add to that the nose-bleed resort fees, and many Americans have a great incentive to go somewhere else other than Las Vegas to do their gambling. And that fact extends to the rest of the World, and in particular, Asia.
When that’s considered, one would have to agree that to base the financing for the Las Vegas Stadium primarily on hotel taxes and one large private loan from Bank of America is a massive mistake. Indeed, the original financing plan for Las Vegas Stadium was to include a tax-increment-financing zone of 25 miles in diameter, but it was removed from the final legislation because Sheldon Adelson said he would pay for all “cost overruns or unanticipated shortfalls“.
Then, Adelson dropped out of the Las Vegas Stadium project on February 26th, 2017, and after claiming that Oakland Raiders managing partner Mark Davis was trying to double-cross him.
So, while Bank of America stepped in with a $600 million line of credit, it’s money the Raiders have to pay back.
The next question is how will the Las Vegas Stadium Authority Board deal with this problem, now that it’s an obvious problem?
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