Vegas buys a pig in a poke; Culinary defeated

Congratulations, Las Vegas, you are now a major-league city … If by “major league” you mean “hosed right up the ass.” In the defining accomplishment of his administration, Nevada Gov. Brian Sandoval (R) strapped on a special session of the Legislature and rammed through a $1.9 billion financing package — the largest in NFL history — for Sheldon Adelson‘s stadium project. While the ostensible beneficiary is [your city here] Raiders owner Mark Davis, He Who Must Be Obeyed will do the majority of booking for his vanity stadium, a white elephant that will be paid for you, the tourist, in the form of increased room taxes. Since one-third of Raiders tickets are expected to be sold to out-of-town fans (yes, they expect tens of thousands of pigskin partisans to descend upon Vegas for an average three-plus days apiece, spending $375 million), the cost of the stadium will largely be borne by those it is supposed to attract. The presence of a brass band and Pom-Pom-shaking cheerleaders was indicative of the gravitas of the bill-signing ceremony.

The Adelson Stadium is predicated upon a scary number of “ifs,” such as if two-thirds of NFL owners vote to move the Raiders, especially if the San Diego Chargers bolt to Los Angeles. Or if the league loans construction money to Davis and if a private partnership headed by Ronnie Lott doesn’t come up with the funds to keep the Raiders in Oakland. Ten Raider games and six guaranteed UNLV games get the stadium only a small way to the break-even point of 46 big events per year. But labor unions were threatening to open a can of electoral whup-ass on Democrats who voted against the deal (many did, anyway), so the pressure not to ask too many questions was high. One of those who stood tall was Teresa Benitez-Thompson (D), who told The Associated Press, “We’re funding luxury items before we’re taking care of our needs.”

It gets better. According to details unearthed by the New York Times, a number of dicey assumptions were baked into the recommendation sent to Carson City. These included luring the Academy Awards to Sin City and attracting the Republican National Convention. (S&G called that one a long time ago.) Getting one-sixth of neutral-site college football games is another underlying assumption. Davis gets all the gate revenue, parking fees and other cash flow, as well the naming rights fee. Oh, and just by the way, an additional $900 million will have to be found to pay for highway improvements around Adelson Stadium. Designated number-cruncher Jeremy Aguero told the AP the stadium would draw 451,000 new visitors a year. Similar things were said about CityCenter when it was new and you don’t hear that talk anymore. (In case you’re wondering, MGM Resorts International CEO Jim Murren has quaffed deeply of the Adelson Kool-Aid on the stadium issue. He and Steve Wynn are like Sheldon’s Stepford husbands.

University of Nevada-Reno history professor Richard Davies nailed the driving force behind the Lege’s gullibility, telling the Grey Lady, “There is a huge inferiority complex in Las Vegas.” Giving the event a slightly more charitable spin, Davies’ UNLV counterpart, Michael Green, likened it to that nodal moment when the Brooklyn Dodgers relocated to L.A. While a preposterous number of construction jobs are posited — 25,000 — Deutsche Bank analyst Carlo Santarelli places the likely total closer to 1,800, which he predicts will redound to the benefit of Station Casinos (and presumably to Boyd Gaming as well).

In the rush to gift-wrap a stadium for Adelson, legislators left begging the question of how a $400 million shortfall in the state budget will be bridged. “Let the people with money build it,” said Clark County Commissioner Chris Giunchigliani said of Sandoval’s Folly. “Don’t put us on the hook with bonds.”

Stanford University economics professor Roger Noll told Global Gaming Business, “This is the worst deal for a city I have ever seen. It’s not just that it’s $750 million but the underlying economic study that attempts to justify the subsidy is the weakest I’ve ever seen. Selling one-third of the tickets to tourists might work if you’re playing the Rams but if you’re playing Tampa do you expect 22,000 people to fly in from Tampa … If you pull out that component of the economic impact study you’re left with basically a financial disaster.”

Well, if we don’t land the Raiders maybe Sheldon can race up and down the field in his motorized scooter while visiting football teams try to tackle him. I’d pay to see that.

* Caesars Entertainment has $1.1 billion in walking-around money after selling Miracle Mile Shops in Planet Hollywood to Institutional Mall Investors, which includes CalPERS among its partners, making California schoolteachers investors in the mall, which has gone from a retail graveyard to one of the country’s 10 busiest. According to the Las Vegas Review-Journal, the deal includes the Axis showroom, so Institutional Mall Investors stands to inherit the contracts of Britney Spears, Lionel Richie and other headliners.

* Station Casinos and the Culinary Union are now 1-1. Although Boulder Station workers voted to organize, those at Palace Station rejected Culinary representation by a narrow margin. As might be expected, Station was bursting with pride over the outcome while the Culinary had sour grapes, but that’s democracy in action.

* Adding a second slot parlor in Massachusetts is looking unlikely as the election comes into the home stretch. Revere voters crushed shadowy developer Eugene McCain‘s proposal in an advisory vote, boding ill for McCain on Election Day. Even if Massachusetts voters give the idea the thumbs-up, the Massachusetts Gaming Commission is under no obligation to give McCain a license … And anybody with four acres next to a horse track, with no highway or railroad running in between can qualify. But, based on the kick in the pants he got from Revere, McCain should start looking elsewhere.

* While on the subject of elections, we should note that Penghu voters in Taiwan obliterated a proposal to allow casino gaming. This is a rare setback for Sheldon Adelson, who’s been sniffing around for casino prospects in the archipelago.