A’s Stadium Deal: Public Input or Public Put Out?

Staff

It is ironic that the construction of mammoth facilities for community use does not involve public input, but is often funded through public funds.

Consider sports stadiums in Las Vegas. Even at the neighborhood level, construction often runs roughshod over residents who prefer peace, or at least to be compensated for the loss.

The Athletics baseball team’s stadium was a done deal for a site north of Allegiant Stadium, where the Raiders football team plays. That was in April 2023.

Less than a month later, the deal had fallen through. The Nevada legislature did not approve it in time. So, the stadium site is now planned for the Tropicana property south of the Strip. It’s hard for residents and businesses to prepare for rapid changes of plan.

overhead view of Nevada Legislature in Carson City
Funding an A’s stadium in Las Vegas was discussed during Nevada’s 2023 legislative session

Neil deMause, the author of Field of Schemes, a book about similar stadium deals, told The Nevada Independent that stadium “plans” often respond to exigencies of the moment.

“Every financing package is unique because they are all kind of geared toward avoiding whatever the particular red flags are that will cause problems in that particular state Legislature,” he said.

A’s Stadium Won’t Raise Taxes?

In Nevada’s case, the stipulation came from Governor Joe Lombardo, who said he would not raise taxes to build the Athletics stadium.

Lombardo’s Chief of Staff Ben Kieckhefer told The Independent last spring that the governor’s plan “contains no new taxes imposed against the residents of Nevada or our guests.”

But it seems odd that Lombardo abandoned the tool used to finance the Allegiant Stadium – the hotel room tax. The Stadium Authority Room Tax was said to be paid mainly by out-of-towners.

The new scheme seemed calculated to avoid the appearance of raising taxes, although raising taxes is precisely what it did.

For example, the bill offered a 30-year exemption from property taxes. (In fact, most stadiums around the country built for the owner(s) of professional sports teams exempt them from property taxes.) The A’s bill proposed bonds that taxpayers would eventually have to pay off.

Tax Credits Used to Fund the A’s Stadium Deal

Transferable tax credits were an unusual feature of the former Bay Area baseball team stadium plans.

Nevada would set up a special district around the stadium. All tax revenues generated in that district would pay for building the stadium. The Sagebrush State would also provide The A’s up to $180 million in tax credits.

A tax credit is subtracted from an individual’s or business’s taxes. If your tax credit is $1,000, then you pay $1,000 less in taxes. This differs from a tax deduction, which reduces the income on which you must pay taxes.

Nevada could use up to $90 million of the district’s tax revenues to offset these credits. In other words, the A’s could see a net gain of $90 million in credits, because had the district not spent $90 million in revenues to offset the As’s credits, the A’s would have benefited by this amount being spent on its stadium rather than having to cough up $90 million itself. Because the credits are for gaming taxes, the A’s could not use the credits to cut its tax bill, but it could sell them to gaming enterprises at a discount.

Should public funds be going to support public needs or private corporations?

In effect, gaming tax revenues would be sacrificed for the A’s. For example, suppose the A’s sell $90 million in credits to casinos at a 10 percent discount. The A’s will receive $81 million. Casino tax revenues will fall by $90 million.

The effect of this scheme is to disguise two facts:

• Tax revenues not earned by the stadium are indeed spent on it because Nevada gives up casino tax revenues to build the stadium, and

• The A’s can make straight money on the scheme. In June, the legislature cut the net gain possible for the new Las Vegas baseball team from $90 million to $60 million. But the principle remained the same.

The point is this: Any public subsidy of stadiums claims tax money could have been spent on public uses such as education and health care, or it could have remained in the pockets of those who earned it.

The former are “truly public “because they benefit all Nevadans.

Funding Tax Subsidies by Robbing the Community

In theory, spending public resources on public education or health care helps the community. And, of course, allowing Nevadans to keep more of their hard-earned money by taxing them less gives them more opportunities.

In contrast, most stadium tax subsidies enrich the owner and, by extension, team players, nearly all of whom are at least millionaires. At best, they benefit only Nevadans who are fans of that team.

It is worth noting that a small portion of stadium subsidies do benefit the public.

Anyone, not just fans, can use new roads around the stadium that connect to main routes. Nevadans may also take pride in their team (although it’s hard to see why anyone would take pride in the A’s at present).

“These are typically just gigantic giveaways to billionaire owners at the expense of taxpayers,” Victor Matheson, a sports economist at College of the Holy Cross, told The Independent last June.

“It’s the sort of thing we generally wouldn’t do for other types of entertainment venues, other types of retail venues.”

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