Las Vegas Sun

March 29, 2024

Sticking points remain in crafting final Raiders lease

UNLV football, Raiders new home

Courtesy of MANICA Architecture

A look at the proposed $1.9 billion domed football stadium for the Oakland Raiders and UNLV football in Las Vegas.

First, fill in the bubble for every question to which you know the correct answer. When a tough one pops up, skip it and come back later.

That basic test-taking strategy serves many students well throughout their schooling. It also explains how the Raiders and the Las Vegas Stadium Authority proceeded in lease negotiations over the past three months.

Today’s lease draft spells out most of what needs to be done for the Raiders to build and occupy their new $1.9 billion stadium that will be owned by the authority. That progress allows stadium authority board chairman Steve Hill to characterize the lease as 75 percent completed, yet key areas of the document still read as “pending” or “insert formula.”

This is not unusual but it points to heavy remaining work. Agreeing on exactly how to meet those needs presents the trickier 25 percent that will test the negotiating resolve of both the Raiders and the authority. Thorny discussions remain for both sides to meet a September deadline for completing the lease and 11 related documents, even with the guidance of Senate Bill 1, the public financing vehicle that provides $750 million in tax money for stadium construction.

Stadium authority counsel Mark Arnold and board staff worked with the Raiders since January to overhaul the first draft submitted by the team. They did so to bring the document closer to the intent of SB1, Hill said last week.

Here are some key takeaways from Thursday’s meeting of the stadium authority board and its discussion about the latest lease draft:

Capital improvements

Hill and Clark County Commissioner Steve Sisolak swatted away last month national reports of a major potential increase on the $750 million public contribution to the stadium allowed by SB1. Deep in the legislation and the lease details, though, lies a capital improvements issue that could at least edge public money past that cap over the years.

The current draft clearly places financial responsibility for capital improvements to the stadium on the stadium events company, which will be an outfit contracted by the Raiders to attract events to and manage the facility. Much speculation swirls around the potential for Dallas Cowboys owner Jerry Jones to win the contract for his Legends Entertainment group, especially following revelations about the depth of Jones’ involvement in the Raiders move.

The events company — called StadCo in the lease — must contribute money into a capital fund each year to prepare for eventual construction and repair needs as the stadium ages. The money must be “in an annual amount so that amounts on deposit in the StadCo Capital Projects Fund are sufficient to pay the expenses necessary for StadCo to perform its obligations under this Agreement as to Capital Matters pursuant to the following formula.”

The following formula does not exist yet though. Its place in Section 7.8 reads “INSERT FORMULA.”

From the authority side, money generated by SB1’s increased hotel room tax will in part fund an annual $5 million contribution toward a stadium capital improvement reserve. Despite the Raiders holding primary responsibility for funding improvements, Hill identified the need to clarify who contributes what money toward future capital projects as an important open issue.

“That includes the thought that the (authority) capital fund would contribute toward the maintenance,” Hill said. “I think it’s important the stadium authority address the broad disparity in how those decisions can be made moving forward.”

Renewal rights

This section received little mention Thursday but represents one of the clearer differences from the first draft to the current one. The Raiders proposed in January reserving an option to renew the original 30-year lease for four consecutive terms of five years for a total of 20 years.

While Arnold said Thursday that a 20-year renewal horizon remains in play, Section 2.5 of the interim lease lists renewal rights only as “pending.” SB1 requires the initial lease to cover 30 years; if fulfilled, that would make Las Vegas the longest consecutively tenured Raiders home in franchise history.

Arbitration

Arnold mentioned what is referred to in the lease as “alternative dispute resolution” as another outstanding area for the Raiders and the stadium authority. The question stems from whether Section 19.12 would cover only monetary disputes or other areas where the sides might not agree.

If the sides could not resolve an issue, it would go before a panel of three arbitrators, who would issue a decision. Earlier in the lease, potential emergency repairs to the stadium paid for by the authority fell into this bucket. If the Raiders did not agree with a repair or its cost, they could initiate the arbitration process under the terms of the lease.

UNLV

Drafts of a potential shared-use agreement between UNLV and the Raiders have been exchanged, Arnold said at the meeting. That agreement is required as part of the lease arrangement.

Jeremy Aguero of board staff firm Applied Analysis listed the UNLV agreement as one of three vital considerations within the lease, along with preservation of the stadium over time and maximizing the use of the facility — “largely the number of butts in seats,” Aguero said.

SB1 requires the Raiders to share the stadium with UNLV’s football team for the school’s six home games each year. The authority retains the power to mediate any issues that arise between the team and the university.

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