What is involved in bringing a professional football team to Nevada?
Football fever has arrived, but this year it has new meaning in Nevada as the possibility of the Oakland Raiders® professional football team eventually relocating and becoming the Las Vegas Raiders™ is making national news.
Business planning attorneys must negotiate the terms of the proposed, complex deal and do local due diligence in order to make the new business venture a reality. While it involves some generally uncontested matters, such as applying for a trademark for the Las Vegas Raiders™ (believed to be in the works), other issues to resolve are more complex and challenging for negotiators.
Many of the deciding factors as to whether Las Vegas will ultimately be the Raiders® new home revolves around the location, construction, and funding of the new football stadium to house the franchise.
In deciding on a location for the stadium, local airport regulations, highway traffic patterns, and proximity to the resort sector are some of the considerations. Nine potential locations in the Las Vegas area are being considered. Two of the nine are Russel Road (the land north of Russell Road and west of Interstate 15) and Bali Hai (the northwest corner of that golf course). Russell Road seems to be the front-runner based on developer’s confirmation that a purchase-and-sale agreement for the property has been signed.
Finding funding for the construction of the stadium is more challenging than finding a suitable location. The stadium project is estimated at $1.9 billion, with construction costs alone being $1.3 billion. Who is going to pay for this?
The proposal on the table is that the cost of the stadium will be split three ways: $650 million will come from private funding; $500 million will come from the football team; and $750 million will come from public funding. It’s important to note that the stadium will be publicly-owned and governed by a stadium authority board, not privately owned. Contributions from the developers and football team will merely help offset the costs of the public stadium. UNLV football will also use this public stadium.
Threatening to walk away and seek a different venue for the team, developers are unwilling to negotiate on the $750 million number expected from the public-- effectively making rejection of this figure a deal-breaker. Not only that, but they aren’t willing to wait beyond September’s end for the project to be green-lighted.
Developers and football officials are hoping legislators on the Southern Nevada Tourism Infrastructure Committee will make a recommendation to the governor to support the deal and fund the $750 million public contribution by increasing the county hotel tax by 0.88 percent. The increase will not only eventually pay for the public contribution, but is expected to boost the local economy by $335 million per year. Once the deal is confirmed, a final hurdle would be gaining approval of the deal by 24 of the 32 NFL teams.
Business planning negotiations can be intense regardless of the size of the transaction. If you are starting, buying, or selling a business you should contact a Las Vegas business planning attorney for information today.
Stone Law Offices, Ltd. serves clients throughout Clark County, Southern NV, Las Vegas, Henderson, Boulder City, North Las Vegas, Summerlin, Carson City, Reno, Washoe County, and Nye County.