Las Vegas gambles $750 million on Raiders
Public is financing large share of move, but it may not pay off
LAS VEGAS — When Sheryl Thornton-Burnham moved to Las Vegas in 1995, she didn’t think the Raiders would someday follow.
ThorntonBurnham had worked for the Raiders for several years in Los Angeles. She was aware of the NFL’s long resistance to basing a team in Las Vegas, a hub for legal sports gambling.
Now, however, ThorntonBurnham need only look at the framework of the nearly $2 billion stadium going up near the Strip to be reminded that in less than a year, this city will become the new home of the Raiders, who are playing out their expected final season in Oakland.
“People are excited,” said ThorntonBurn
ham, who leads a Raiders booster club here. “There are people who are not Raider fans who are still excited about it because they know what the influx of a team will do for a city.
“Las Vegas is turning into a worldclass city. It’s not Sin City anymore. It’s a bona fide city that can compete with anybody.”
Optimism about the impact — civic and economic — of bringing an NFL team to Las Vegas spurred Nevada to approve $750 million in public funds for a new stadium. That, in turn, led NFL owners to approve the move and the Raiders to plan an exit from Oakland, their home for the last 25 seasons and 47 of their 60 seasons overall.
As the move grows imminent, proponents say the new stadium will be a tourism asset for Las Vegas and an exciting upgrade for the Raiders from the outmoded Coliseum.
Others, meanwhile, question using public money for a stadium — something Oakland officials proved reluctant to do with the Raiders — and whether it is a gamble that might not pay off in the long run.
Rising alongside a freeway, at the south end of the Strip, Allegiant Stadium figures to be quite a sight when completed. With a capacity of 65,000, the stadium will feature a translucent roof, sliding doors that open to a view of the Strip and a large exterior video screen. The field will be on a tray, allowing the Raiders to roll in natural grass for their games.
Officials last week said the stadium is roughly 58% complete and on track to be finished by July 31, with a current total budget of $1.97 billion. In an email, NFL spokesman Brian McCarthy said the league has been receiving positive updates on stadium progress and ticket and suite sales.
“All indications are that there is tremendous fan and corporate support for the team’s arrival in what should be a fantastic stadium for players and spectators,” McCarthy said.
The public contribution, covering more than onethird of the project, comes from a hotel tax of 0.88% on properties along the Strip and 0.5% on properties in surrounding areas of the Las Vegas Valley. Steve Hill, chairman of the Las Vegas Stadium Authority, said the idea is that the tax will be paid mostly by tourists, lessening the burden on residents, and will help fund a venue that will allow Las Vegas to attract events it previously could not.
“What we presented, and I think was a pretty conservative set of data, was the stadium itself will produce more in tax revenue in what it does and the spinoff of everything that will happen in the stadium than the money that is being invested — not a lot more, but some more,” Hill said. “So we feel like that revenue will still be generated.”
An early study by the Southern Nevada Tourism Infrastructure Committee forecast the stadium would generate $620 million in annual economic impact and bring in 450,000 visitors who otherwise would not have come to in Las Vegas. Officials said just under half of attendees at all stadium events are expected to be nonresident consumers, with about 23% in town specifically for that event.
Those projections, as they pertain to Raiders games, are a sticking point for Stanford economist Roger Noll.
“There is no NFL team in the country that has more than about 3 or 4% of tourists in the stands,” Noll said. “So it would have to be the case that this would be more than an order of magnitude increase.”
A model would be the NHL’s Vegas Golden Knights, who filled nearby TMobile Arena to more than 100% of capacity in their 201718 inaugural season. (Unlike the Raiders’ new stadium, the Knights’ arena was built without public funding.) Stephen Miller, director of UNLV’s Center for Business and Economic Research, said while Las Vegas quickly adopted the Knights, many outoftown fans also go to games.
“They come specifically to attend the game,” Miller said, “and then they stick around and have fun in Las Vegas.”
Las Vegas, which the city’s Convention and Visitors Authority said attracted more than 42 million visitors last year, is close to a large Raiders fan base still in Southern California — the team played in Los Angeles in 198294 and won the franchise’s last Super Bowl there at the end of the 1983 season — and figures to attract fans of visiting teams in a way other cities would not. The NFL has already announced its 2020 draft will be held in Las Vegas, and officials hope the stadium will eventually host a Super Bowl and NCAA Final Four in addition to concerts, corporate events and home games for the Raiders and UNLV.
“In order to continue to stimulate growth in Las Vegas, we need to keep adding reasons for people to come,” Hill said. “So it’s certainly helpful along those lines.”
Noll remains skeptical.
“I think this is a financial catastrophe for the city looming,” Noll said. “But that’s because I don’t believe the tourism assumption, I don’t see there’s any basis for it. If it turns out to be true, then I’m wrong. We’ll just have to wait and see.”
In Oakland, officials resisted using public money to finance a new stadium for the Raiders. At the time the team was finalizing its move in 2017, Oakland and Alameda County were still paying off stadium bonds that expanded the Coliseum to bring the Raiders back from Los Angeles in 1995 — a total debt of $350 million not scheduled to be paid off until 2025.
Miller, the UNLV professor, said the general view among economists is that putting public funds into stadiums is “not a good investment for the taxpayer.”
“My view on that is it depends on the city,” Miller said. “And Las Vegas is now pitching itself as not only the entertainment, but also a sports capital of the world.”
Miller said the Raiders will have to attract some outside visitors in order to have a positive economic impact for Las Vegas. He likened the team’s arrival to that of the Golden Knights, saying that “if they come in and become good community citizens, that’s going to help the adoption process and stimulate the fan base here.”
“On the other hand, it’s not rocket science,” Miller said. “If you win, people will be very pleased to support you.”
Jon Ralston, a longtime journalist who launched The Nevada Independent news site in 2017, said in an email that he received “endless guff from people” when he wrote that the public money aspect of the Las Vegas stadium was “a joke.”
“The homogeneous thought on this is comical,” Ralston wrote. “I have never seen such cheerleading for a team before it even arrived, especially by the newspapers and TV stations. No one knows what will happen, although the zeal to have pro sports may allow the Raiders to suck for a few years and still draw crowds.”
On a recent episode of the “Silver and Black Today” radio show, Raiders President Marc Badain said the team is on pace to sell out personal seat licenses at Allegiant Stadium by Thanksgiving. The Las Vegas ReviewJournal reported 55,000 seats will be under license. Badain said about twothirds of PSLs had been sold to Nevada buyers and the other third to buyers in California and the rest of the country.
Citing PSL sales, the Raiders added $130 million in upgrades to the stadium budget in recent months. Along with the $750 million in public money, the budget includes a $600 million loan from Bank of America and a $200 million loan from the NFL, with the Raiders expected to cover the remainder of costs through sales of PSLs, sponsorships and other deals.
To the eager, the “Raiders Preview Center” at a mall a short drive from the Strip offers a taste of Raiders history in a curved room lined with memorabilia and photos. On a recent weekday, Paul Nunn, a Las Vegas resident, was inside looking at a virtual layout of Allegiant Stadium.
Nunn said he bought four seat licenses at the stadium. He expects the Raiders and their new home to be a popular draw.
“The theory is if I sell two seats, those two seats will pay for the other two seats,” Nunn said. “I think fans are going to be coming from everywhere.”
Cisco Ortega, a Raiders fan from the Bay Area who now lives in Las Vegas, worries the Raiders could lose an element of homefield advantage when they leave the Coliseum.
“Here, I’ve already heard a lot of the casinos bought tickets to entertain their highend clients,” Ortega said. “So the stadium won’t be predominantly, 95% Raider fans . ... I think it might be like 5050, maybe 60% Raider fans. I don’t know. I hope I’m wrong.”
Ortega said he wasn’t happy about the Raiders leaving Oakland. He believes the team’s “fan base will still be there. But the culture, what makes the Raiders the Raiders, that won’t be the same.” He is also confident that “the tailgating is definitely not going to be the same.”
Questions about parking were raised early; the stadium will have only about 2,500 spots onsite. This month, the Raiders reportedly spent $28 million to purchase several future offsite parking areas that will provide an additional 2,700 spots. The Stadium Authority’s Hill said other options could include nearby businesses or lots a couple miles south of the stadium that will shuttle fans to the stadium on game days.
Noll, the Stanford economist, questioned the effectiveness of those solutions and said it could lead to a “traffic nightmare.” Badain, to “Silver and Black Today,” said the stadium is “obviously going to have tailgating” and that concerns otherwise were “unfounded.”
Long without majorleague sports, Las Vegas will add the Raiders to a roster that now counts the Golden Knights and the WNBA’s Aces among its professional teams. A new stadium opened last season in nearby Summerlin for the Aviators, the TripleA affiliate of the Oakland A’s.
It is a different scenario in Oakland, which has seen the NBA’s Warriors move into a new arena in San Francisco and known of the Raiders’ departure for several years.
Chris Dobbins, a cofounder of the Save Oakland Sports fan group and former Coliseum Authority board member, said the impact of losing the Raiders is “immeasurable.” Dobbins said he knows of some Bay Area fans that will follow the team next season but does not include himself among them.
“I’m going to support the Raiders this year, but after that I’m not supporting them again,” said Dobbins. “And I’m never — I say never, but I don’t think I’ll ever go to a game or watch them or support them next year.”