The Las Vegas Raiders have found a deal the rest of us could never imagine on Craigslist: a rent-free, $1.9 billion home. The latest lease agreement being considered between the NFL franchise and the city grants the team the rights to play in the partially tax-funded stadium at no cost.
The Las Vegas Stadium Authority (LVSA) met this week to discuss a multitude of issues surrounding the $1.9 billion, 65,000-seat stadium. The focal subject is coming to terms on a lease agreement between the two sides, and deciding how much the Raiders will pay Las Vegas to call the city its home.
Raiders owner Mark Davis had previously proposed an annual rent payment of $1. The bargain drew criticism from some, as the Nevada Legislature has approved earmarking $750 million in hotel occupancy taxes to help build the football venue.
But this week the $1 proposal got even cheaper, with a rent-free lease now being recommended.
“It’s based on the fact that the Raiders are going to be investing up to $1.15 billion and certainly taking the risk for any overruns,” LVSA Chairman Steve Hill said. “In order to make that agreement make financial sense, the revenue from the stadium needed to flow to those investors.”
The Raiders currently play Oakland $3.5 million each year to play at Oakland Coliseum.
Not Exactly Free
The Raiders are seemingly getting the deal of a lifetime from Las Vegas, as the city is betting on increased tourism, gaming, dining, and an all-around economic upsurge in exchange for its $750 million investment. But Davis’ NFL organization is certainly taking on the bulk of the risk.
After Las Vegas Sands billionaire Sheldon Adelson backed out of the project, a $1.15 billion funding gap emerged due to the casino tycoon keeping his $650 million pledge in his pocket, and Goldman Sachs’ subsequent financing withdrawal. Davis found a new partner in Bank of America, which agreed to bankroll the outstanding capital after reportedly being persuaded by Dallas Cowboys owner Jerry Jones.
While Las Vegas’ $750 million tax dollars commitment enticed Davis to file for relocation with the NFL, the Raiders, and the stadium operator it enters into a contract with, will be responsible for the annual operations of the venue, and be on the hook for making sure it turns a profit.
The Oakland Raiders are expected to stay in the Bay Area for the next three years, with the goal of playing in front of Sin City fans at the start of the 2020 season. In order for that to become a reality, Clark County Commission Chairman Steve Sisolak says the city and franchise must stay on a strict schedule.
“It’s tight, there’s no wiggle room,” Sisolak said after the LVSA meeting. “There’s no room for error, but it can be done in time. I’m confident we can make it happen.”
Another condition of the stadium is that the UNLV college football team can play its games in the facility. The Rebels’ current home, the aging 40,000-seat Sam Boyd Stadium, could play home for the Raiders should Oakland fans abandon the team.