New Financing Rejuvenates Las Vegas Stadium

With public financing and a new investor on board, the NFL team's plan to build a new stadium still in play

  • by Bridget Manley
  • Published: March 15, 2017

Rendering of the proposed 65,000-seat Raiders' Las Vegas Stadium. (Photo Credit: MANICA Architecture)

If all goes according to the new plan, the Oakland Raiders could have a new home in Las Vegas. And they would have taxpayers partially to thank for it.

Last year, the Nevada Legislature approved an 0.88 percent increase in hotel occupancy taxes that will raise $750 million for the project, said Jeremy Aguero, a principal analyst with Applied Analysis, a firm The Las Vegas Stadium Authority has retained to study the proposed stadium.

Construction of the 65,000-seat stadium, along with a proposed expansion of the Las Vegas Convention Center and securing ongoing funding for police, is part of the city's bid to solidify its position as a prime tourism destination, according to the Nevada Governor's Office of Economic Development.

“We have before us the opportunity to invest in Nevada’s most foundational industry, tourism, by providing for the infrastructure and public safety needs of the 21st century," Nevada Gov. Brian Sandoval said in a statement. "We can and must usher in a new era for tourism in the Las Vegas market, while keeping our citizens and visitors safe, and ensuring our position as the global leader in entertainment and hospitality.”

The stadium project hit choppy waters in January when casino magnate Sheldon Adelson backed out of his $650-million investment pledge. Adelson's exit triggered the withdrawal of Goldman Sachs, the project's backup investor.

However, Bank of America has committed to fill the gap. The $650 million they plan to invest in the stadium's construction will augment tax-generated revenue and the Raiders' $500 million investment in the project, Aguero said.

Even if all goes according to plan, the Raiders probably won't be moving anytime soon. Based on current projections, the earliest the proposed stadium could be ready to host NFL football would be the 2020 season, according to the Stadium Authority.

Calls to the Oakland Raiders were not returned by press time.

The stadium's estimated $1.9 billion pricetag includes a $100-million practice facility. Another $100 million is earmarked for contingencies, a common line item for many large-scale projects, Aguero said. 

"Generally, anytime you have a major construction project, particularly one at some point in the future, the cost of materials could change," he said. "The cost of offsite or onsite infrastructure could change. There are just unknowns relative to the project."

The total cost to build the stadium is set at roughly $1.3 billion. Land, infrastructure and siting expenses are estimated to cost roughly $375 million, according to the Stadium Authority.
The State of Nevada has several interests in the development of an National Football League stadium.

The venue is expected to create jobs and boost local wages. It's also expected to increase tourism, which will in turn create a surge in visitor spending and business output. State officials also expect the uptick in visitors will generate additional revenues through room, gaming, sales and use taxes, the Stadium Authority's website reported.

The venue won't only benefit the Raiders. If plans for its construction come to fruition, it will also host the University of Nevada - Las Vegas football team. This will eliminate the need to build an additional collegiate stadium.

The venue has more hurdles to clear before breaking ground in the Silver State. The NFL owners are expected to review the team's relocation application at a meeting later this month, Aguero said.

Once the owners give their blessing, the project must pass muster on several findings. These include whether the team "formally elected" to relocate and whether it has demonstrated financial capability to build the stadium itself, Aguero said. 

Finally, two key agreements must be reached. The first is a development agreement for the venue's construction. The second is a 30-year stadium operating lease, Aguero said.

No anticipated groundbreaking date has been set, he added.

  • by Bridget Manley
  • Published: March 15, 2017