Nevada: Nearly $1 billion needed for infrastructure improvements cannot foil stadium plans

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Last month, we addressed the soundness of using tax money to finance trendy development projects, like new stadiums for professional sports teams, and corporate expansion projects. One such project is casino magnate Sheldon Adelson’s ambitious dream to build a new $1.9 billion, 65,000-seat football stadium to entice the Oakland Raiders to move to Las Vegas. It is controversial, in part because the use of public money in this way may not be a good investment for taxpayers.

Nevertheless, Gov. Brian Sandal called a special session last week, in which lawmakers proceeded with infrastructure legislation that would impose a tax on lodging, of 0.88 percentage points for the stadium, and 0.5 percentage points for the convention center, and to fund the principal and interest on bonds issued to defray the costs of the projects. The Governor believes that the new tax, in combination with a companion tax of 1/10th of 1 percent for the purpose of employing and equipping additional police officers, represent a “rare opportunity to seize the moment and raise Las Vegas, already the best in the world, to the next level of entertainment and hospitality.”

However, a new traffic assessment of the possible stadium sites prepared for the Nevada Department of Transportation (NDOT) “tangled talks” in the special session, according to the Las Vegas Sun, in part because it was a surprise to lawmakers; game days and other major events could add 15,000 to 18,000 additional vehicles to the road system. 

The traffic assessment, purposed in providing a “high level overview of stadium traffic effects” on state-maintained roads, laid out $889 million of state highway infrastructure projects that have already been planned or programmed, or are in the conceptual phase, but that could or should be accelerated to support the new stadium. Examples of plans that may be considered for acceleration include the addition and/or reconstruction of high-occupancy vehicle interchanges; and monorail and pedestrian bridge and walkway extensions. 

Once the preferred stadium site is selected, follow-up studies need to be conducted to fully understand transportation improvement needs in light of the increased road usage. This follow-up will include traffic impact analysis, parking needs analysis, a traffic management plan, and plans for transit expansion during special events.

Referring to the fiscal note filed with the legislation, the Las Vegas Review-Journal explained that because the development of the transportation projects was already planned, “there is no fiscal impact above and beyond what NDOT assumed it would deliver” between 2020 and 2035. Indeed, NDOT is not seeking additional funding at this time.

Despite the glitch posed by the NDOT’s assessment, Nevada lawmakers passed the infrastructure legislation, to Gov. Sandoval’s delight: “[t]his week, legislators representing north and south, urban and rural, came together to prove we are one Nevada. It is truly exciting to see our gaming industry, labor unions, and small businesses come together with broad support for these important projects… this is the beginning of the next chapter of southern Nevada’s continued dominance in tourism, conventions and hospitality…”

Gov. Sandoval signed both bills into law earlier this week.

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