June 9, 2023 - 9:00 pm
Lawmakers, the public and Review-Journal reporters have a gross misunderstanding of how tax increment financing works. All have referred to the $380 million sought by the A’s as a “handout.” This is completely untrue.
The money sought by the A’s will be generated by the stadium and will be used to retire the construction bonds. No stadium, no tax money. No construction bonds, no stadium. In other words, it cannot be construed as a handout if the money doesn’t exist, and it won’t unless the stadium is built. Further, it cannot be construed as a handout because this deal is revenue neutral to taxpayers. Eventually the $380 million will be repaid.
Las Vegas and Nevada are in a unique position in that they have an opportunity to land an Major League Baseball franchise with no competition. When MLB next expands, it will be to 32 teams — and that’s where it will end, because that is the perfect number of teams from a scheduling perspective. Las Vegas then will be competing with Montreal, Portland, Nashville, Charlotte, San Antonio-Austin and Salt Lake City — all viable candidates. There may be others. All of those cities will need to commit to building an MLB-caliber stadium and have financing in place before MLB even allows them to bid.
And consider this: The bid winners likely will be paying a franchise fee that approaches $1 billion. Those ownership groups likely will not have the financial wherewithal to contribute another $1 billion to the stadium construction, as the A’s have pledged to do. So if Las Vegas somehow manages to land an expansion franchise, taxpayers will need to contribute much more to the stadium construction than they will with the A’s deal
Moreover, the A’s have agreed to turn the ballpark over to the stadium authority and that all jobs inside the building will be union jobs. Try to get those concessions from another group.
The A’s represent the best and perhaps only bite at the apple that Las Vegas will get. Don’t blow it.