Is Nevada Interested in Soccer?

The fellow across the street was out watering his trees this morning when Sarah and I got home from Trader Joe’s. He waved me over for an update on our new grandchild. Then he started in on my about the soccer stadium.

He quickly pronounced soccer the most boring spectator sport of all time, recalling the double-overtime game he had once watched on TV that ended 1-0.

How popular is soccer in Nevada? I found a soccer fan-blogger-statistician who used Google Trends to try to compare the states’ interests in various sports. It is an interesting read.

Google Trends says Nevada is about average.

 

Ticket Pricing Comparison

One of the ways to compare the MLS Soccer Stadium proposal is by focusing in on how much the team plans to charge for tickets. If the price point is too low, the team generate enough sales to pay its rents… if it is too high, then not enough people will buy tickets and the team won’t generate enough sales to pay its rents.

This article explores ticket pricing throughout the MLS. Where will the proposed Las Vegas team’s prices be set?

Psst – hey taxpayer, wanna buy a stadium?

Details were released today on the proposed downtown arena.

The total cost of the project is $200-million. Of that, the developer (a partnership of Cordish and the Findlay family) will pay $44.25-million. Taxpayers are responsible for the rest, but it’s complicated.

There are four sources of taxpayer funding for the remaining $155.75 million (78% of the total funding, and a little more than $250 for each of the 600,000 men, women and children in the City of Las Vegas proper):

  1. $14-million – this is cash the city already has on hand. It could be used for many other things. The city is giving this money to the project, and not asking the developer to pay any of it back.
  2. $5-million – this cash is not in the bank. It’s complicated, but the federal government issues local governments tens of millions of dollars of coupons to sell to rich people.  Local governments auction them off to high-income taxpayers. The rich people buy them for less than face value and use the coupons, instead of money, to pay their income tax bills.  City staff estimates that if we could latch on to about $25-million of those coupons, after paying all the middle men and women it would raise $5-million in cash. The cost would be the federal government losing out on $25-million in income tax. Apparently, the federal government thinks that’s no problem .
  3. $22-million – this cash would be borrowed. Again, it’s complicated. This part has the City creating a STAR district – “Sales Tax Additional Revenue”. Within the district, which would include all the undeveloped land in Symphony Park plus the almost-built expansion of the Factory Outlet Mall, all sales tax would be treated differently. Normally, sales tax goes into a big bucket and is distributed to local governments based on population. With a STAR district, that sales tax would all go to the City of Las Vegas for 20 years. The pledge of those dollars to pay the bonds back gives rich people enough comfort to loan the City money in the first place. The opposition would include all other local governments in Clark County, who lose out on their usual portion of this money.
  4. $115-million – this is the largest chunk and the plan is to borrow it, pledging all city revenues toward the obligation to pay it back. Drill down, and the city plans to redirect about $3-million a year from park maintenance funds for 30 years, plus another $4-million a year from soccer team profits (for the first ten years) and $5-million a year from soccer team profits (for the twenty years after the first ten) to make the loan payments. That’s only a plan – if the soccer team decides it isn’t making enough profits to make those payments, then city taxpayers are on the hook. Either taxes will be raised, or the city will stop delivering $4- to $5-million per year of existing services (in addition to the $3-million of park maintenance) in order to make up the difference.

So, in the final analysis, the City is planning on funding stadium construction by making the developer pay $44-million (22%), giving the developer $19-million (9.5%) and borrowing $137-million (68.5%). The borrowing will be paid back mostly by profits of the stadium (few American arena/stadiums end up with any) and by not performing park maintenance. If the profits fall short, unidentified current city services will be cut.

And as a “bonus”, the City “gets to own it” meaning no property tax revenue will be generated.

And not included in the above discussion is the land in Symphony Park that the City is giving the developers. The City has already spent ten or so million getting the site of the old UP train wash to the point where it is today. That money was borrowed, and the City continues to make payments (and rack up interest expense).

Has Sacto Pulled Out of MLS Quest?

Some of the folks down at City Hall read this article that I tweeted on August 16 and read that the group trying to bring the last MLS expansion team to Sacramento had withdrawn from the competition, increasing the chances that Las Vegas might get the league’s nod. That’s now how I read it, so I went back and read it again this morning.

The article quotes Sacramento’s mayor as saying no public money will go into a new soccer stadium to house any new team.

The Las Vegas promoters, on the other hand, have asked Las Vegas taxpayers (not Clark County, Henderson or North Las Vegas taxpayers) to fund about 70% of a downtown soccer-specific stadium. It would be available for other things besides soccer, but it would be built to MLS standards, specifically for soccer.

But the rest of the article claims the Sacramento soccer stadium can be built with private dollars.

Here’s the full quote from Sac’s mayor:

“I do not have an appetite to provide tax dollars to build a soccer stadium,” the mayor said. “Can it be built without it? It’s possible. Other cities have privately financed soccer stadiums.”

More importantly, the story notes that Republic FC, the leading contender in Sac hasn’t been asking for any public money. Republic FC, which already runs a successful, smaller-league soccer team, proposed a sales tax increase earlier this year, but withdrew the plan after it proved unpopular. So the group has been making its plans using private capital instead.

Sacramento’s mayor notes that California already has two MLS stadiums with no public dollars: one in San Jose, under construction, and The StubHub Center in Carson, which hosts two MLS teams.

Republic FC is still very much in the hunt for the last franchise, it seems.

From Beavers To Chihuahuas

Members of the Las Vegas City Council have been offered a taxpayer-paid trip to Portland, OR to visit a MLS game there, and learn how Portland has benefited from its city-owned stadium. I thought it might be cheaper to research the topic online.

The MLS team in Portland plays at Providence Stadium, which was built in 1926 with private funds. The city of Portland bought it in 1966 for $2-million – about $15-million in today’s inflation-adjusted dollars. It was the home of the Portland Beavers, Oregon’s Triple-A minor league baseball team, for longer than the Stars/51s have been at Cashman Field. In 2010, after talking about finding the Beavers a new facility and converting the stadium to a soccer facility, the Portland City Council ditched the “find the Beavers a new home” part and converted the stadium, evicting the Beavers. The cast-off Beavers today have morphed into a minor league team in Texas called the El Paso Chihuahuas. Portland now has a single-A team called the HIllsboro Hops.

The conversion of the facility to soccer cost $36-million dollars, with a complicated financing scheme that seems to put most of the burden on Portland taxpayers, if you read enough about it. Inside talk at Las Vegas City Hall suggest round numbers for the proposed Cordish deal are quite a bit larger – $300-million with half paid for by Las Vegas taxpayers.

It will be interesting to see if any of the council members who make the trip come back thinking how comparatively inexpensive it would be to convert Cashman Field into a soccer stadium.

For more on the Portland MLS stadium: