Clark County is tapping into a reserve fund in order to make its upcoming scheduled bond payment for Allegiant Stadium.
Due to reduced tax revenue from hotel stays amid the COVID-19 pandemic, Clark County officials say they’re short on cash for its $16.06 million bond payment scheduled for December 1. As a result, the county is drawing from its reserves to make good on the payment.
Clark County Public Communications Director Erik Pappa revealed that $11.55 million has been withdrawn from the “Reserve 2018A Bond Proceeds Subaccount of the Reserve Account” to cover the shortfall. Following the transaction, the account has a balance of $57.25 million.
[The withdrawal] was expected in light of the decline in tourism to Las Vegas. Fortunately, the financing for the Stadium Authority bonds included the funding of a debt service reserve fund to weather economic declines like the one Las Vegas is currently experiencing due to the pandemic,” Pappa explained.
The $1.9 billion Allegiant Stadium was partially funded with $750 million generated by a 0.88 percent hotel occupancy room tax increase on stays within Clark County. The Raiders NFL franchise, which now calls Las Vegas and Allegiant Stadium home, is covering the remaining cost.
In 2016, the Nevada Legislature passed legislation that approved the 0.88 percent hotel tax increase on Clark County stays. Casino resorts are responsible for collecting the additional revenue and sending it to the county government.
Four years ago, government officials hyped the economic benefits of building an NFL stadium and relocating a franchise to Southern Nevada. Las Vegas-based Applied Analysis was hired by the Southern Nevada Tourism Infrastructure Committee (SNTIC) to research how a 65,000-seat domed venue would impact the region.
Researchers concluded that the stadium would bring more than 451,000 incremental visitors to Las Vegas each year, and create an annual economic output of $620 million. The stadium was forecast to generate $22.5 million in new local tax dollars for Clark County.
Casinos would benefit from increased guests, who would be expected to gamble, eat and drink, shop, and attend shows. The $750 million investment seemed like a no-brainer at the time. Then COVID-19 came.
Allegiant Stadium opened its $1.9 billion dollars with little fanfare — actually, with no fans at all. Raiders owner Mark Davis said the entirety of the team’s home games this year will be played without fans in attendance.
Casinos continue to collect the 0.88 percent occupancy surcharge on their guests. But those visitors aren’t in Las Vegas to attend an NFL game in-person.
2020 Las Vegas visitor volume amid the pandemic is down more than 54 percent through October. Strip casino operators are struggling, as crowds remain thin.
Nevada Gov. Steve Sisolak (D) has ordered a “Statewide Pause,” as new coronavirus cases continue to climb. During the pause, casinos are limited to 25 percent capacity on their gaming floors.