‘Public financing’ for A’s stadium is as certain as it is foolish

23 April 2023

It’s not the first time a wealthy sports mogul from Oakland has lobbied Nevada lawmakers to subsidize a new playground for their team in the Mojave Desert — and, like last time, the ultimate outcome probably isn’t too hard to predict.  

Last week, new details were shed on the Oakland A’s efforts to secure an “incentive package” that would facilitate the building of a new ballpark near the Las Vegas Strip. According to The Nevada Independent, the team is lobbying lawmakers to create a public-funding mechanism estimated to be worth around $500 million.

Certainly, the proposed concept isn’t as massive as the $750 million gift Nevada gave the last professional sports team to flee Oakland — but that doesn’t mean it isn’t an equally foolish thing for lawmakers to consider. 

To give credit where it is due, Gov. Joe Lombardo’s administration has made it a priority to ensure there are no new taxes involved — a promise that feels vaguely reminiscent of things we’ve heard from politicians before. Instead, the A’s and the governor’s office seem to be considering a program in which tax dollars created by the stadium and its surrounding amenities would be directed into a special fund that would pay off public bonds used to subsidize a portion of the project’s cost. 

It would also include an unspecified amount of transferable tax credits — a form of corporate welfare only slightly less irresponsible than allowing the treasury department to give the team wheelbarrows full of cash. 

The practical implication of the special tax district would mean Clark County and the state wouldn’t actually see any tax revenue directly from the stadium for at least 30 years. And that feels like a steep price, considering the fact that Las Vegas isn’t exactly lacking the private capital (or incentive) to build world-class tourist attractions that actually contribute to state revenue streams. 

Much like the team’s previous plans for a grandiose development in Oakland, the Las Vegas project would include more than a mere stadium. It would be an entire entertainment district that could even connect to Park Avenue — where T-Mobile Arena and Park MGM Resort are located. 

Certainly, tying the stadium in with Park Avenue would be a savvy business decision, which should make lawmakers question why any publicly financed incentive package is necessary in the first place. After all, MGM built the area around T-Mobile (including the arena) without begging taxpayers for public financing. What is it about a baseball stadium that requires $500 million in public assistance? 

Proponents of the deal argue such a public cost is justified because of the sheer volume of visitors it will attract. 

A’s President David Kaval, for example, told The Nevada Independent a feasibility study done for the team estimated 400,000 annual incremental new tourists to Nevada as a result of the project. And while the county and state won’t see any direct revenue from the stadium itself for the next few decades, Jeremy Aguero, founder of Las Vegas advisory firm Applied Analysis, says government coffers will benefit from the “incremental money” spent by visitors such as room, sales and retail taxes at locations away from the stadium.

However, none of this is as much of a selling point as it might initially seem. Are we supposed to believe that without some massively subsidized ballpark in the area, Vegas is in danger of no longer attracting new tourists? That would be a hard narrative to accept, given that all those shiny buildings up and down the resort corridor are currently spending plenty of their own capital to do precisely that — and, of course, they’re doing it without a special tax scheme to funnel public dollars into their back pockets. 

For better or for worse, Southern Nevada’s economy is heavily dependent on tourism. And while that might make some people uncomfortable about the economic stability of the region, it comes with an upside: There’s a massive industrial engine at work in the private sector to continue attracting the kind of growth in tourism we’ve seen during the past several decades. 

One might imagine Kaval and his team could find whatever financial assistance they need without leaning on lawmakers to hand out special favors. There are likely countless businesses that would be more than happy to invest in such a project for a portion of the profits it could potentially generate over the years. 

Of course, that sharing part is precisely why sports teams are increasingly disinterested in depending on private investors. What makes public financing so attractive is that recipients don’t have to share profits with governments the way they otherwise would with private business partners. After all, what share of the A’s profits will this public “investment” earn taxpayers? (Obviously, none.)

As the Berkley Economic Review describes it, public money allow teams to “socialize the costs” and privatize their profits.

As of yet, the Legislature still doesn’t have a bill drafted to grant the A’s their dream stadium on the Strip — but the lack of a bill doesn’t necessarily represent any substantive opposition from lawmakers. Judging by the way stadium deals have unfolded elsewhere in recent years, it’s quite likely a last-minute bill will be rushed through (with broad support) near the end of the legislative session — or that a special session will be convened with little time for public scrutiny of any agreement’s final details. 

And just like the 2016 special session to give the Raiders a new home, the outcome of that session will likely be a foregone conclusion long before lawmakers arrive in Carson City.

Indeed, even broad public opposition usually isn’t enough to stop such crony arrangements. And, considering the way Nevada officials gleefully shell out hundreds of millions of dollars every time a wealthy out-of-state billionaire flirts with investing in the state, it seems quite likely the A’s will end up being the second sports team from Oakland to socialize their costs in the Silver State. 

Michael Schaus is a communications and branding expert based in Las Vegas, Nevada, and founder of Schaus Creative LLC — an agency dedicated to helping organizations, businesses and activists tell their story and motivate change. He has more than a decade of experience in public affairs commentary, having worked as a news director, columnist, political humorist, and most recently as the director of communications for a public policy think tank. Follow him at SchausCreative.com or on Twitter at @schausmichael.

The post ‘Public financing’ for A’s stadium is as certain as it is foolish appeared first on The Nevada Independent.

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