Stadium Public Policy: One-On-One With Stadium Public Financing Expert Mark Rosentraub About Raiders And A’s Stadiums In Las Vegas
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By Alan Snel, LVSportsBiz.com Publisher-Writer
LAS VEGAS, Nevada — When major league sports teams were entering the political arena to get government subsidies to build stadiums about a quarter-century ago, one of my go-to sources was Mark Rosentraub, who wrote books on the topic and went on to even work as a consultant for UNLV on a proposed campus stadium project more than a decade ago.
I recently re-connected with Rosentraub, professor of Sport Management and director of the Center for Sports Venues & Real Estate Development (formerly the Center for Sport & Policy) at the University of Michigan School of Kinesiology.
Rosentraub also was a professor and dean at the Maxine Goodman Levin College of Urban Affairs in Cleveland State University and the campus dean of Indiana University’s School of Public and Environmental Affairs (Indianapolis). He completed his PhD at the University of Southern California.
We go with five questions with Rosentraub.
LVSportsBiz.com: What do you think about the A’s stadium location on the Strip?
Mark Rosentraub: I think there were other locations that would have arguably lend themselves to more benefits for the public sector. I do have concerns with the depth of the market and the dependency on tourists to fill seats. What works for the NFL is not a useful guide for baseball teams. Similarly, the success of the Knights created a wonderful honeymoon and perhaps their success (and the success of T Mobile Arena) is what the As think is a precursor to their success. I have a less optimistic view so I do not see either benefits for the public sector or harbingers of longer term economic success for the team.
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Raiders doing work on the Al Davis torch at their new stadium in Las Vegas. Photo credit: LVSportsBiz.com
LVSB: How do you look at Southern Nevada’s public contribution of $750 million to help build the Raiders stadium and $380 million to help build the A’s stadium?
MR: The (Raiders stadium) tax that supports the building of the stadium is mostly paid by tourists. If there is no change to visitors’ other spending levels, then the tax is essentially exported. What that means is that residents get the benefits (the team’s presence and other indoor stadium events including games and concerts) and residents of Clark County paid nothing for the stadium and the team’s presence. In addition, the additional visitors also pay other taxes that create new revenues for Clark County residents. I know that some think it is wrong to tax visitors since they might not benefit from the stadium but the job of elected officials is to give their constituents the most benefits for the least taxes. Allegiant Stadium fulfills their responsibilities even if some public finance principles are compromised.
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LVSB: With Las Vegas’ economy so tourism-based, are public investments in sports facilities and LVCVA sponsorships a wise decision?
MR: The economy of Las Vegas rises and falls on tourism. Tourists expect unique and affordable hotel experiences and live entertainment events. That is why they come to Las Vegas as opposed to other casinos located closer to their homes. To continue to attract visitors, Las Vegas actually needs more events and (likely) an additional hotel.
Photo credit: Daniel Clark/LVSportsBiz.com
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LVSB: Bring us up to date on what you’ve been doing and what are your thoughts on some of the recent stadium subsidy issues like ones in Kansas City and even Nashville and Buffalo where new NFL stadiums are planned?
MR: When communities decide to invest in a venue they are essentially planning for the production of tangible and intangible benefits. The tangible benefits come from new development and the taxes generated by the teams and what I refer to asset-anchored real estate development. The intangible benefits of having a team in the community. When we think about Nashville and Buffalo the fair question to ask is what are the tangible benefits. I tend to think there will be little new development in Buffalo and that makes the success of the project linked solely to the intangible benefits. Those benefits might not be enough to offset the costs. Similarly, for Nashville there is anticipation that there will be some real estate development. Again, the question for that community is, “Are the intangible benefit sufficient to warrant what is being invested IF the real estate development does not occur.
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LVSB: I enjoyed reading your books, Major League Losers and Major League Winners. Which book would you use to classify Las Vegas for the Raiders stadium and the A’s ballpark?”
MR: As I noted above, I think the stadium was a “slam dunk” for Clark County and Nevada. Yes, on that deal, Las Vegas is a Major League Winner. With regard to the As and their new ballpark, I have some reservations. First, the location means there will be no new real estate development so I don’t foresee any new taxes from asset-anchored development. Second, I am not sure how the financing will be exported; I know there is hope that tourists will attend games (and that attendance will not be at the expense of another show), but I have some reservations with regard to that assumption. Allegiant made some events possible in Las Vegas that could not take place without the stadium. Hence there are new events and new spending. A ballpark does not create a similarly unique environment and as a result I think the taxes will be paid by residents. So now the question is whether or not residents really want MLB and the intangible benefits of a team’s presence. I think it likely that the intangible benefits will be sufficient to offset the public sector’s investment.
Alan Snel: Alan Snel brings decades of sports-business reporting experience to LVSportsBiz.com.
Snel covered the business side of sports for the South Florida (Fort Lauderdale) Sun-Sentinel, the Tampa Tribune and Las Vegas Review-Journal. As a city hall beat reporter, Snel also covered stadium deals in Denver and Seattle.
In 2000, Snel launched a sport-business website for FoxSports.com called FoxSportsBiz.com.
After reporting sports-business for the RJ, Snel wrote hard-hitting stories on the Raiders stadium for the Desert Companion magazine in Las Vegas and The Nevada Independent.
Snel is also one of the top bicycle advocates in the country.