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March 28, 2017

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Las Vegas Stadium Authority to tackle Raiders’ revised lease proposal next week

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Steve Marcus

State Assemblyman Mark Manendo holds a Raiders cap during a bill signing ceremony at UNLV Monday, Oct. 17, 2016. The bill will increase hotel room tax to help finance a $1.9 billion stadium.

With its next milepost less than a week away, the Las Vegas Stadium Authority Board awaits a restructured lease agreement proposal from the Oakland Raiders after outlining to the team concerns about the original document’s structure.

Amid a climate of questions surrounding stadium financing, the board meets Thursday in Las Vegas and will discuss progress on the proposed lease after much upheaval around the Raiders’ original draft. Casino magnate Sheldon Adelson withdrew his pledged $650 million investment in the project in January after the team submitted the lease proposal to the board without informing Adelson of its existence.

Adelson’s decision also triggered investment bank Goldman Sachs, which was lined up as a backup, to step aside. Raiders officials insist they secured funding to replace Adelson’s commitment last month but thus far have declined to detail who the new investors are or what the structure of their financing might look like in the $1.9 billion project. Oakland’s relocation application to the National Football League will be considered by team owners at the annual league meeting March 26-29 in Phoenix.

“You kind of get the impression that Raiders ownership is trying to nonchalant the whole thing,” said Daniel Etna, partner and co-chair of Sports Law Group at Herrick, Feinstein LLP, a law firm with experience advising major stadium transactions. “At the end of the day, it’s one thing to talk about it and it’s another thing to actually have another financing commitment in hand.”

Etna’s firm previously worked on a proposed development of a sports and entertainment complex in California for the Raiders, as well as the financing and development of Yankee Stadium in New York.

“Perhaps the Raiders have found somebody that’s prepared to provide the required financing and they’re just going like the hammers of hell trying to get something put in place,” Etna said. “I’ve been viewing this with kind of a jaded lens when they say everything is OK.”

Board chairman Steve Hill reiterated Thursday that Raiders officials express to him nothing but optimism in the stadium financing component of the deal.

“They feel confident that they can put the financing in place in order to move forward with their application,” Hill said. “I think they’re making good progress with that.”

Progress on the proposed lease includes the authority outlining for Raiders officials what changes need to be made for the document to be in compliance with Senate Bill 1, the legislation passed in an October special session of the Nevada Legislature authorizing the state’s $750 million tax increase to provide a public component of the deal.

“The way that document was structured, it was not really in conformance with the agreements that are outlined in SB 1,” Hill said. “From the lease standpoint, the stadium authority board will enter into an agreement with the stadium events company.”

Hill said this set of problems led to some of the initial confusion regarding the terms of the draft proposal.

In SB 1, the stadium events company is defined as “a person whose business is organized under the laws of this state for the purpose of leasing the National Football League project from the Stadium Authority and owned by: the (NFL) team or its affiliate; a developer partner or its affiliate; or the (NFL) team or its affiliate and a developer partner or an affiliate of a developer partner.”

Hill sees the Raiders potentially stepping into that role now, changing the landscape under which the agreement would be negotiated and signed.

“When we envisioned it at the time, the Raiders obviously thought they would have had the Adelsons as a partner in the stadium events company,” Hill said. “There’s a reasonable likelihood that the Raiders will be both the team and the stadium events company.”

Raiders representatives did not return a request for comment Thursday.

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