Q & A on Las Vegas Ballpark bill: Gov. Lombardo’s office answers questions
LAS VEGAS, Nev. (FOX5) - After state lawmakers and Governor Joe Lombardo announced a tentative agreement for a ballpark, FOX5 had a number of follow-up questions on the proposal.
E-mailed answers came from Communications Director Elizabeth Ray.
(Questions are edited/condensed for clarity)
Question: Why has there been no stadium rendering released to the public?
(Reader note: FOX5 has asked A’s management for renderings twice this week, with no reply.)
Answer: “I would refer you to the A’s organization for this question.”
Question: The office had previously stated the Governor’s office is not leading or spearheading this effort?
Answer: “The Governor’s office is not spearheading this effort, like previously stated. The Governor’s office has been involved in negotiations with all partners and stakeholders in this project – including Treasurer Conine’s office, Speaker Yeager, Senate Majority Leader Cannizzaro, Clark County officials, and the Clark County Commissioners.”
“The release came from our office since it was a release from “local and state leaders,” and Governor Lombardo is the state’s most senior government official.
Question: What is being done to address locals’ concerns over potential property tax ramifications, if the A’s can’t generate tax revenue to pay their debts?
(Reader note: A Clark County source that first raised concerns earlier this week now states that they feel “comfortable” with the current bonding agreement to prevent that scenario. )
Answer: “This question is problematic on a number of levels.”
“First, the revenue streams generated by the stadium project have been reviewed for reasonableness (and adjusted where appropriate to do so) by Applied Analysis; Goldman Sachs; Hobbs, Ong and Associates; CSL; and PFM. Notably, PFM reviewed the estimates on behalf of the Clark County and found that they were reasonable.”
“Second, the sports and entertainment improvement district (i.e., the tax district) will require a combined coverage ratio of not less than 2.0x. This mean that two times the amount of the principal an interest payable on the bonds will need to exist for every one dollar pledged to the repayment of the bonds. This includes a state line of credit that, if utilized in any year, must be repaid from tax revenues generated by the project.”
“Third, the MLB stadium bonds will require a full year’s worth of reserves be deposited into a bank account the day bonds are initially issued and an accelerated allocation of waterfall funds to create a second year’s reserve fund. As structured, the project will essentially have a four-year reserve in place, meaning that the project would need to generate zero tax dollars for four years before Clark County’s general obligation (i.e., county general fund dollars) would be required to cover any shortfall. By all accounts this is a conservative approach, and the likelihood that the County general obligation would be required is remote.”
“Fourth, Clark County has experienced and thoughtful financial staff as well as outside experts who have been working with the A’s and other state and local elected leaders to develop and design and fiscally responsible public-private funding strategy.”
“Fifth, the notion that anyone on the Governor’s staff who has been working on this initiative and is somehow “uninformed” is simply inaccurate. The state can and has set boundaries for bond issuances (see, e.g., the requirement that the Raiders’ stadium bonds were issued with 1.5 times coverage).”
“Sixth, the suggestion that by the County issuing general obligation bonds is somehow violating the Governor’s pledge against increasing taxes reflects a complete misunderstanding of what general obligation bonds are and how they work. Every time the state, local government and even school district issue bonds they pledge the full faith and credit of the state or local government as security for those bonds. This is standard practice in Nevada and across the country and is far from any form of tax increase. Clark County and Nevada issue these bonds all the time and maintain some of the highest bond ratings possible.”
Question: From low attendance to Oakland stadium disrepair, what is the confidence from the Governor’s office that the team will be a good steward of state and county bonds, market the team to lure in locals, and ensure enough tax revenue to cover debt payments?
(Reader note: FOX5 has also asked the A’s this question, and has not heard back)
Answer: “If you have infrastructure questions about the A’s current ballpark, I would direct you to the A’s organization to speak to those concerns. State and local officials will ensure that this tentative agreement is responsible, sustainable, and accountable. In the last few years, we’ve seen the Raiders, Golden Knights, and Aces all thrive in Las Vegas. There is a growing market and vibrant pathway for professional sports teams in Las Vegas.”
Question: A lot of locals voiced concerns to FOX5 that a deal is being rushed, without locals getting a full understanding of the traffic, financial and potential tax impact. What does the office have to say?
Answer: “Legislative leadership has pledged to ensure a thorough public vetting of the proposal and receive input from community members.”
“All state and local government officials are committed to ensuring this deal is executed in a fiscally responsible manner for all Nevada taxpayers.”
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