A’s ballpark proposal in Las Vegas receives approval from Nevada Senate

By Casey Harrison (contact)

Published Tuesday, June 13, 2023 | 2:14 p.m.

Updated Tuesday, June 13, 2023 | 5:31 p.m.

The Nevada Senate voted to advance a $380 million public financing package for a Major League Baseball stadium near the Las Vegas Strip in a decisive win for the Oakland Athletics in their pursuit to relocate from Northern California.

The Senate today adopted a pair of amendments to Senate Bill 1 of the 35th Special Session to revive bills a pair of bills that were vetoed by the Republican Gov. Joe Lombardo at the end of the legislative session to score a key win for legislative Democrats.

Passage of the amendments came by a 12-7 margin with eight Democrats and four Republicans voting in favor, with two Senators, Ira Hansen, R-Sparks, and Robin Titus, R-Wellington, absent.

The Senate ultimately passed the bill 13-8, winning over Sen. Jeff Stone, R-Henderson, who criticized the Democrat-backed amendments as dirtying an otherwise “clean” version of the bill. But ultimately, he said, the deal represents an eventual return on investment for taxpayers that will leave the public with a state-of-the-art asset.

"The taxpayers of the state of Nevada will own the stadium and, ultimately, will own the land that the stadium is sitting on," Stone, who noted the A’s own investment of $1.1 billion for the project represents one of the largest private sector pledges for a ballpark. "The citizens of Nevada, north and south, will forever derive significant income from establishing the team here for decades. That’s billions of dollars."

The Senate ultimately passed the bill 13-8, winning over Sen. Jeff Stone, R-Henderson, who criticized the Democrat-backed amendments as dirtying an otherwise “clean” version of the bill. But ultimately, he said, the deal represents an eventual return on investment for taxpayers that will leave the public with a state-of-the-art asset.

The measure now heads to the Assembly, which heard an informational hearing on the legislation this morning. The lower body spent nearly seven hours hearing testimony and public comment, and agreed to convene at 11 a.m. Wednesday to consider further action on the bill.

The amendments would establish 12 weeks of paid medical or family leave for businesses of at least 50 employees moving into the state or expanding and seeking certain tax abatements approved by the Governor’s Office of Economic Development.

The paid leave, initially sought in SB 429, would be available to employees who have been at a business for at least a year, and the rate of pay would be at least 55% of the employee’s regular wage.

The amendments also carve out a provision requiring workers on a railroad or monorail project contracted by the state earn a prevailing wage.

The prevailing wage is the rate of pay earned by other workers in the same profession, usually determined by organized labor agreements.

Lawmakers in the Democratic-controlled Legislature tried to get the measure passed through SB 299. The bill was vetoed by Lombardo, an opponent of prevailing wage requirements for state projects.

Among other things, the amendments passed today clarify the definition of the bonds Clark County can distribute and adds language requiring the stadium be built at the southeast corner of Las Vegas Boulevard and Tropicana Avenue, where the Tropicana sits.

The amendments also allow lawmakers to later redraw the boundaries of a special sports and entertainment improvement tax district that would be created for the stadium, but the district may not include any hotel or licensed gaming establishment. Should lawmakers change the makeup of the tax district down the road, the amendments prohibit making any changes that would impair the issuing of bonds for the construction of the stadium.

The amendments also make various changes to the community benefits package the A’s would agree to for the passage of the project.

Those include a $500,000 annual donation to community initiatives until the completion of the ballpark. The A’s would then donate $1.5 million annually, or 1% of ticket revenues, whichever is greater.

The benefits package also includes workforce diversity requirements for the construction of the ballpark, as well as among subcontractors, vendors and stadium employees.

The A’s would also be required to pay a “living wage” to employees of the stadium project, though the bill does not specify any amounts.

“Ensuring that public works projects are built by skilled labor making fair wages and requiring that companies provide paid leave as a condition of receiving state tax incentives are major priorities for Senate Democrats,” a spokesperson for the caucus told the Sun in a statement. “Including those provisions was important to many members, along with other changes to increase oversight and accountability regarding the stadium project.”

The amendments also establish community engagement requirements that mandate participation by A’s players in community and education programs, as well as provisions for the donations of tickets and a ballpark suite for charitable, community or economic development organizations and programs aimed at supporting youth baseball in underserved communities.

Further, the A’s would enter into partnerships with local colleges and universities to provide workforce development programs in the sports industry, as well as provide scholarship and internship programs.

To ensure the A’s and the stadium developer are hitting key benchmarks for the project, a seven-member oversight body would be created.

It would consist of two board members of the Clark County Stadium Authority and two people appointed by the Clark County Commission. The governor, Assembly speaker and state Senate majority leader would each appoint one member.

The oversight committee would report at least once a year if the A’s and the stadium developer are in compliance with the provisions of the community benefits agreement.

If the team or stadium developer fails to meet the benchmarks, it could initiate legal proceedings or other enforcement mechanisms.

Sen. Edgar Flores, D-Las Vegas, voted in favor of the bill after initially being skeptical. What changed for him, he said, was a willingness from the A’s to meet lawmakers halfway and add community benefits provisions that weren’t in the initial version of the legislation.

“During the hearing (last week), every single request I made was fulfilled,” Flores said in remarks prior to the general floor vote. “I cannot pretend after all I requested took place that I could turn around and not support this.”

Even opponents of the bill, such as Sen. Dina Neal, D-North Las Vegas, who said certain members of her conference, including herself, simply don’t want to hand out public dollars for stadium projects, said she appreciates the progress that was made.

“It was also not easy to push forward and bring us to what I believe is a better bill than the original version that was presented to us,” Neal said. “I think there's a fundamental philosophical difference around (whether) should we be funding using public money to fund stadiums.

Others, like Sen. Ira Hansen, R-Sparks, agreed.

“Somehow we couldn't come up with $32 million for 3,000 public school teachers in the charter school system, but here we are coming up with I don't know how many hundreds of millions of tax credit dollars that could be used for all sorts of thing,” Hansen said. “I think our priorities are messed up.”

What happens if the county can’t pay?

Jeremy Aguero, principal analyst of the Las Vegas-based economic research firm Applied Analysis who is representing the A’s, said it would take four years of the project generating $0 in revenue before Clark County would need to tap into its general fund to back the stadium bonds.

The bill is structured so that the state would pay up to $180 million in transferable tax credits, in which $120 million could be made refundable. That’s paired with roughly $125 million in general obligation bonds issued by Clark County. The county would also invest a separate $25 million for infrastructure surrounding the stadium.

Until $45 million of those tax credits are repaid by revenues generated by the project, 90% of the proceeds remaining after the payments would be refunded to the state with the last 10% going to a homelessness prevention fund managed by Clark County and nearby cities.

That turns into an 80-20% split once $60 million has been recuperated by the state.

As amended, the bill establishes a so-called waterfall of fail-safes that would be triggered in the event Clark County is unable to back its bonds. The bonds will be funded by 17 taxes, including sales tax, live entertainment taxes and payroll taxes, Aguero said.

For every dollar dedicated to the principal and interest payments of the bonds, another dollar must be available for the project.

Half of that coverage would come from cash backed by the county, and the other half would come from a state-backed line of credit, Aguero said.

The bill requires that for every dollar dedicated to the principal and interest payments of the bonds, another dollar must be available for the project itself. Half that coverage would come from cash backed by the county, and the other half would come from a state-backed line of credit, Aguero said. Those sources of coverage would be the first two mechanisms triggered.

If those sources prove insufficient to back the bonds, the county would then use two “reserves” as a backstop: the first round of the average annual debt service (AADS) funding would be backed by Clark County upon issuing the bonds, and the second year of reserves would be generated by tax revenue flowing into the project. In any event, reserves that come from AADS would stay in a bank account that could only be used if Clark County is unable to pay its debt obligation.

Prior to the amendments, the bill required the state to make a one-time appropriation of $25 million to the State Infrastructure Bank to make a credit enhancement to back the bonds issued for the project.

That commitment dwindles to a one-time appropriation of $14 million. The state is also unable to assume Clark County’s debt for the project if they are unable to meet its fiscal obligations.

Rather, Clark County — only in the event it is unable to back its bonds — would have to raise taxes to meet its obligations.

Oakland fans rally against ownership

News of the vote comes the same day as fans in Oakland are staging what they’re calling a reverse boycott, by trying to sell out the 63,000-seat Oakland Coliseum for Tuesday’s game against the Tampa Bay Rays to voice displeasure with the team’s ownership group. The A’s rank dead last in baseball for average attendance at about 8,555 per game, according to figures kept by ESPN.

The A’s for years have maintained the facilities at the Coliseum are untenable and have sought for ballpark options throughout California, and have explored ballpark options in Fremont, Sacramento and, most notably, a waterfront stadium along the San Francisco Bay as part of a $12 billion-plus development in Oakland.

Those options have faltered, but officials in Oakland have shown a willingness to restart negotiations if lawmakers here are unable to pass a deal. Other cities, such as Portland, Ore., Nashville, Tenn., Salt Lake City and others have been floated as potential options for the A’s or landing a possible expansion team.

“If Nevada were to say no, I know Mr. Fisher, the owner of the team, has backup cities salivating in their hope of securing this team away from our projected subsidy,” Stone said.