Las Vegas Sun

March 28, 2024

Lawmakers should vote yes on stadium, convention center expansion

Cashman rendering

City of Las Vegas

This rendering shows how Las Vegas city officials envision the Cashman Center site looking if it becomes home to an NFL stadium. Officials say a soccer stadium, 18-story boutique hotel and entertainment district could surround the stadium and revitalize the area north of downtown.

In “Unify, Regionalize, Diversify: An Economic Development Agenda for Nevada,” a 2011 Brookings Institution report that undergirds the state’s current economic development plan, the authors detailed the need for Southern Nevada to strengthen its core economy of gaming/tourism/conventions and to economically diversify within that sector. Thanks in large part to the diligent work of the Southern Nevada Tourism Infrastructure Committee, led by Steve Hill, executive director of the Governor’s Office of Economic Development, and Len Jessup, president of UNLV, two key infrastructure projects will be placed before legislators in a special session called by Gov. Brian Sandoval. We strongly encourage legislators to vote in favor of the bill to upgrade the Las Vegas Convention Center and build a 65,000-seat stadium. Both projects are absolutely necessary for Las Vegas to maintain its standing as the nation’s leading tourist economy.

Southern Nevada has a history of using tourist taxes for much-needed infrastructure assets. The Smith Center, a major concert venue in downtown Las Vegas, is financed, in part, by a car rental tax. The Smith Center, while certainly a worthy project, is less critical as tourist infrastructure than a convention center or a stadium. The Smith Center is in essence a regional asset, and its audiences are made up largely of local residents. Large-scale tourist assets such as the convention center and stadium will attract a majority of their visitors from outside our region. These visitors bring new dollars to our economy. A Las Vegas stadium, unlike others across the nation, will be filled with visitors supporting our most basic export industry: tourism.

In big cities across the nation, the majority of funds raised by tourist taxes are reserved for infrastructure needs within the county. Some critics of the proposed infrastructure projects for Southern Nevada argue that such taxes should be allocated to our schools. In fact, a large portion of these taxes are already applied to public schools — and not just in Clark County, but across the state. Tourists visiting Las Vegas pay for teachers in Reno, and convention attendees fund schools in Elko. Some opposition to the construction of these Southern Nevada assets, as expressed in a recent Reno Gazette-Journal opinion piece, argues the Las Vegas local economy should continue its statewide school subsidy and not add a new tax increment on hotel rooms to build out its tourist infrastructure. Yet we can do both.

It also should be noted that most other metropolitan tourist markets do not work this way. Consider Orlando, Fla., and remember its recent efforts to lure the National Rodeo Finals from Las Vegas. The Orlando suburb of Kissimmee planned to use local tourist taxes to build a state-of-the-art facility dedicated to host the rodeo. Kissimmee can easily consider such a venture as it retains 100 percent of its tourist taxes within Osceola County. In fact, Orlando’s tourist taxes are dedicated for three purposes: (1) promotion of the Orlando region as a tourist/convention destination; (2) construction and maintenance of convention facilities; and, (3) construction of sports and entertainment venues.

Understand that Orlando does not send one penny of its bed tax out of Orange County. The entire bed tax is reinvested in the local tourist economy. Orlando actually taxes tourists less than Las Vegas. Yet it has more resources to build tourist assets because it limits its tax use to promoting the industry.

By contrast, tourist taxes in Las Vegas are defined as state-level taxes with some local carve-outs. In some cases, the state claims the entire local tourist tax. Nevada generates over $150 million per year in a Live Entertainment Tax that comes overwhelmingly from the Las Vegas Strip. All revenue from that tax is sent to the state and added to the general fund. Based on Nevada’s local formula allocation, Clark County forgoes about a third of its revenue from the tax, or by our estimates over $40 million per year.

Local tourist taxes also build non-tourist infrastructure in Las Vegas. Southern Nevadans may recall that in the previous decade, legislators earmarked $600 million of hotel room taxes to widen Interstate 15 along the tourist corridor from the 215 Beltway interchange to Sahara Avenue. NDOT chose not to invest transportation dollars for this improvement, even though the Strip is by far the most important economic asset in Nevada and would certainly justify state expenditures for mobility upgrades.

Southern Nevada can easily accumulate the funds necessary for the convention center and stadium projects. Building essential tourist infrastructure is an entirely appropriate and common use of hotel room taxes. A public-private stadium or an upgraded convention center is a more deserving use of tourist taxes than local road improvements that NDOT should fund.

Our competitors for tourism and convention dollars are closely watching how Las Vegas proceeds. More than 42 million annual visitors also will notice what action Nevada’s leadership takes. Our core economy and the region’s standing as a global tourist and convention destination are in play. We hope Nevada’s political leaders recognize the high stakes and choose to double down on the Las Vegas tourist economy.

Robert Lang is co-director of Brookings Mountain West and was one of the authors of “Unify, Regionalize, Diversify: An Economic Development Agenda for Nevada.” William Brown is UNLV director of Brookings Mountain West.

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