HOUSTON – Projected costs for a proposed new National Football League stadium in Las Vegas might not be as high as anticipated, leaving Oakland Raiders owner Mark Davis looking for a new investment partner but possibly needing less money to complete the project.
Davis, the franchise’s managing general partner, intends to build a $1.9 billion, 65,000-seat domed stadium on Russell Road west of Interstate 15 for the Raiders, if NFL owners approve the team’s move to Las Vegas from the Bay Area. He has filed for relocation, and a vote of league owners could come as early as March.
Clark County has committed $750 million toward the stadium project. Davis committed to a Raiders contribution of $500 million last summer. However, Davis’ negotiations with Las Vegas Sands Corp. Chairman and CEO Sheldon Adelson, whose family had pledged $650 million toward the stadium, broke down in recent weeks and the casino executive pulled out of the deal Monday.
“There’s no doubt that $750 million is a significant level of dollars from the public,’’ said Lester Bagley, executive vice president of public affairs and stadium development for the Minnesota Vikings, who last year opened U.S. Bank Stadium at a cost of $1.1 billion.
But some NFL executives, gathered in Houston for Sunday’s Super Bowl LI between the New England Patriots and the Atlanta Falcons, wonder whether the $1.9 billion price tag for a Las Vegas stadium is exorbitant.
NEW STADIUMS BUILT FOR LESS
This week, Atlanta Falcons owner Arthur Blank told the Review-Journal the stadium cost seemed high. The Falcons’ new Mercedes-Benz Stadium, which will be ready for play next season, will cost $1.5 billion, including $200 million in public money. That makes Mercedes-Benz Stadium the second-most expensive NFL stadium ever constructed.
“I was surprised, yes — it seems like a higher number than what I would anticipate,’’ said Blank, co-founder of The Home Depot. “I’m not sure what they’re building. I haven’t seen any drawings. Obviously, it is several years after most of our (stadium) expenses have gone through the process, but ($1.9 billion) seems high.”
To date, no NFL stadium has cost more than the $1.74 billion for MetLife Stadium, built in 2010 and home to the New York Giants and New York Jets, in East Rutherford, N.J.
The two most expensive stadiums built immediately after MetLife were AT&T Stadium ($1.3 billion) by the Dallas Cowboys and Levi’s Stadium ($1.2 billion) in Santa Clara, California, home to the San Francisco 49ers.
By 2018, a new NFL stadium in Inglewood, California, will be built at a cost of $2.66 billion, or what Bagley described as “the most expensive stadium in the history of the world.’’ The Los Angeles Rams and Chargers will share the grandiose facility. Groundbreaking began in November for the 80,000-seat structure.
DOME SWEET DOME
According to several NFL officials who have dealt specifically with stadium issues, the cost of such buildings are affected mostly by one feature — the roof.
So, the question becomes, what difference does $800 million make when talking stadium dollars? What does $1.9 billion get you compared with $1.1 billion?
First, it depends on whether the stadium has a retractable roof or is open-air, the latter of which NFL officials do not consider desirable for a city like Minneapolis (too cold in the winter) or Las Vegas (too hot in late summer and early autumn).
There are ways for the Las Vegas Stadium Authority to trim costs, such as reducing the number of stadium escalators and elevators. The elimination of some amenities can drive down the final cost.
It all depends on how lavish Davis wants his fixed-roof stadium.
Davis and Raiders team President Marc Badain have declined comment this weekend.
“I will say the ($1.9 billion in Las Vegas) seems high, but so much of what the actual design will be impacts costs,” said Rich McKay, president and CEO of the Falcons. “Believe me, those costs can go north of the number if you need a design like we have, with an eight-piece moving roof. Think of the most basic design: Whether or not you have a retractable roof or not makes an incredible difference in cost. So many things that go with that can drive (up) costs.
“Also, trying to compare stadiums in Dallas or Atlanta or Minneapolis, or elsewhere, is comparing apples to oranges, because of what a certain city’s economy might be at the time and things like labor costs. These are big, round numbers, but they’re usually not specific as to what the final cost will be.”
OTHER COST FACTORS
Unions are politically active in Nevada. During the public discussion leading up to the state Legislature’s vote on the stadium proposal, local trade unions were highly visible.
The Vikings’ Bagley said the franchise’s stadium project took 12 years to push through the state Legislature as a public-private partnership, followed by a four-year design/build process, a lifetime compared to the rapidity of the Las Vegas project, which emerged barely more than a year ago. In Minnesota, the public committed $498 million.
The Vikings chose a less-expensive way to build the stadium. Because they decided against building a retractable roof, they saved the project an estimated $100 million to $150 million, Bagley said. (Comparatively speaking, the Vikings’ former stadium, the all-purpose Hubert H. Humphrey Metrodome that opened in 1982, cost only $55 million.)
Instead, the south side of the U.S. Bank Stadium roof is covered with ethylene-tetrafluoroethylene — ETFE. The substance is a resin that is made into a thin film and is extremely lightweight, durable and resistant to corrosion. It was the best and most-economical solution for all concerned, particularly given Minneapolis’ climates, both political and weather.
“We built a world-class facility for $1.1 billion,” Bagley said. “But what we saw happen is the same thing that happens when stadiums go under construction. They become more costly as costs and inflation escalate even though the builders are supposed to build that into the pricing.’’
Hidden costs are impossible to predict, as McKay said. Among those costs are the fluctuating economy, potential delays in construction, labor and material costs and how much infrastructure is necessary.
In Las Vegas, the stadium plan as written into law has these proposed numbers: $1.35 billion for construction; $100 million for an NFL practice facility; $375 million for site purchase and infrastructure costs; and $100 million for contingency costs.
The Clark County hotel room tax revenue and the Raiders’ contribution leave a total of $1.25 billion on the table for the project.
All of which makes this unknown: Does Davis really need the $650 million that was coming from the Adelsons, or does he need far less to build the Las Vegas stadium?
“I would think the ($1.9 billion) might be questionable,” said Clark County Commission Chairman Steve Sisolak. “I asked that question during the process. Nobody had any answers.
“The thing is, until a final site is picked and you know for sure what infrastructure costs are going to entail, you don’t know the final number. You could have infrastructure costs that are $10,000 to $50,000 or several hundred million. Until you get some sense of what the stadium is going to look like, it’s impossible to know. It could go over the $1.9 billion and could come under by several hundred million.”
The Review-Journal is owned by the family of Las Vegas Sands Corp. Chairman and CEO Sheldon Adelson.
Jon Mark Saraceno can be reached at email@example.com. Follow @jonnysaraceno on Twitter.
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