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September 13, 2011
Majestic on $2B Vegas stadium: Read their lips, no new taxes
Majestic's proposed 40,000-seat domed stadium and basketball arena may have died in the Nevada legislature, but as we all know, stadium plans never stay dead for long. And so we have this from today's Las Vegas Sun:
The public-private partners behind a proposed on-campus stadium at UNLV say they are developing a plan to build it without raising taxes.
Since the Legislature this year rejected a special tax district to fund the $2 billion stadium/dormitory/retail project, university administrators and Majestic Realty Co. have been working on a financial formula and other changes to allow the project to move forward.
Craig Cavileer, president of Silverton resort and Majestic's representative on the project, said one idea is for UNLV to issue but not underwrite bonds to pay for construction, allowing the university to avoid liability should the project fail and investors sue. Another idea is for Majestic to fund the project.
Now, that's hand-wavy in the extreme — Majestic says it can find a way to pay for a $2 billion stadium by, um, finding a way to pay for it — but what I'm more interested in here is the headline: "Developers: A UNLV stadium could be built without raising taxes." There are basically two promises a wannabe stadium builder can make to the public: one, "no new taxes will be used"; the other, "it won't raid the general fund." These are, of course, mutually contradictory: If it's using public funds, it has to use either new tax money (which means raising taxes) or old tax money (which means taking money that was previously going to be spent on other things). But somehow you never see reporters discuss the flip side of these promises, as in "Developer promises stadium will only use existing public funds" or "Developer promises entire cost will be paid by raising taxes."
Of course, if Majestic really can fund the entire project itself, as it alludes to, then that's all well and good. (Though it'd still be using public land, and not paying any property taxes while using police and fire and other services that would need to be paid for somehow, which is less well and good.) But if they could build it themselves, then presumably they wouldn't have needed to ask the legislature for the talcum powder.
You're right Neil, those 2 promises are used over and over.
Our former city council member, now mayor, Jamie Matthews was in 49ers stadium campaign mailers with "No new taxes" "No cost to our general fund" "No cost to Santa Clara residents"
Nevermind that redevelopment dollars are property tax dollars, that by extending the RDA in time to issue bonds for stadium construction, RDA property tax dollars are diverted away from our general fund, that hotel occupancy taxes were raised by 2% for stadium construction, that our city-owned power company is spending $20Million + to move an electric substation to create parking spaces, that our city staff estimates a $67 million loss to our general fund, and that our city's consultant estimates the city will take a 2 to 1 loss on its direct subsidy.
Voters need to realize there is no 'truth in advertising' requirement in campaign ads, particularly in stadium campaign ads.
To be fair to our current mayor Mr. Matthews, I doubt he really understands issues like RDA divertments.
I feel he may had really believed what he was being told to say during the stadium election. It's a possiblity anyway.
Posted by santa clara jay on September 13, 2011 03:08 PM
SC Jay ... you are being way too generous in your comment. All tax money IS PUBLIC money, plain and simple.
Property taxes are paid to support public projects ... RDA money is money for PUBLIC projects. And, a stadium is not a PUBLIC project - unless they are going to allow the citizens who are paying for it to use it for FREE.
Any chance?
Posted by ReadyRanger on September 14, 2011 01:31 AM
In Santa Clara, the "Won't-impact-your-General-Fund" promise has already been broken by our elected officials and by the San Francisco 49ers.
The worst part of broken promises such as the two above isn't simply that a team's public mouthpiece or a city official was deceitful to begin with.
What's much worse is that electorates who fall for either of those lines end up paying big time when those promises don't materialize. By the time a misinformed electorate realizes that it's way too late to protest, a city agency or taxing district has taken on much public debt that they simply "cannot be allowed to default" without destroying the municipal bond ratings not just for this stadium or that arena, but for EVERY bit of indebtedness the city undertakes - G.O., utility, any bond.
Whether Las Vegas, or Santa Clara, CA: When it suits politicians being influenced by millionaire real estate developers or NFL team owners, the public is the group that pays for stadium stupidity.
Ask folks in Indianapolis and Cincinnati. They know.
Rgds,
Bill Bailey, Treasurer,
SantaClaraPlaysFair.org
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