Nevada has enacted a major tax incentives package to bring the Oakland Athletics to Las Vegas.
The new law, S.B. 1, provides legislative authorization for a deal including up to $380 million in state and local support to help pay for a new Las Vegas stadium for the team, a key step in securing a decision by the A's and Major League Baseball to relocate the team from California. The bill was signed June 16 by Gov. Joe Lombardo (R), who had backed it and called a special session on June 6 after the regular session ended without approval of an incentives package for the stadium.
“This is an incredible opportunity to bring the A’s to Nevada, and this legislation reflects months of negotiations between the team, the state, the county, and the league,” Lombardo said in a June 15 statement. “Las Vegas’ position as a global sports destination is only growing, and Major League Baseball is another tremendous asset for the city.”
S.B. 1 was initially passed by the Senate 13 to 8 on June 13. The Assembly passed it with amendments 25 to 15 on June 14, with the Senate concurring with the Assembly changes the same day.
The bill approves up to $180 million in transferable state tax credits, allowing them to be provided to the team by the Clark County Stadium Authority in amounts of up to $36 million per year. The county has also agreed to provide $120 million in general obligation bonds and $25 million toward improvements. A special sports and entertainment improvement district will be created to generate tax revenue, including to pay bond debt. The Athletics organization is required to invest at least $1.1 billion to build the roughly $1.5 billion stadium on nine acres in the downtown area, near the T-Mobile Arena, home of the Golden Knights hockey team, and just a few blocks from Allegiant Stadium, where the Raiders football team relocated from Oakland. The stadium will be publicly owned and leased to the team by the stadium authority, and the A’s agreed to stay in Las Vegas for 30 years or else pay off outstanding bond debt and a portion of the tax credits.
The legislation also requires the team to make donations to the local government of money and in-kind services equal to at least $2 million annually once the stadium is finished and operating.
Before the Assembly vote, Revenue Committee Chair Shea Backus (D) said that despite the cost, the incentives authorized by the legislation would ultimately benefit the state.
“The required public investment in the A’s stadium, as required by Major League Baseball, will yield an economic benefit to our state as we have seen with the Allegiant Stadium,” Backus said, adding that “the investment by our state for S.B. 1 is less than that requested [for] Allegiant Stadium.”
Backus also said that the stadium’s construction will generate a projected 14,000 jobs.
However, Assembly member Selena La Rue Hatch (D) argued that the bill represents a giveaway of “millions of public dollars to a billionaire,” a reference to the A’s co-owner, John Fisher. “No amount of spin or changing of the numbers will change the fact that we are giving $36 million a year in public funds in exchange for maybe $2 million in in-kind donations,” she added.
“That math doesn't add up to me," La Rue Hatch said, particularly in light of other challenges facing the state, including the ratio of students to teachers in public schools and the lack of universal pre-kindergarten. “We still have people sleeping on the streets,” she said. “Our constituents are telling us they don't want this and our constituents are asking us to invest in their communities.”
The new law was praised by the Athletics, which said in a June 15 statement, “We are excited about Southern Nevada's dynamic and vibrant professional sports scene, and we look forward to becoming a valued community member through jobs, economic development, and the quality of life and civic pride of a Major League Baseball team.”
The A’s said the organization will next seek approval from MLB for the move. Meanwhile, the office of Oakland Mayor Sheng Thao criticized comments by MLB Commissioner Rob Manfred that the city had failed to provide the team with an offer to entice it to stay, arguing instead that the A’s had demanded too much from the city.
“The reality is the A's ownership had insisted on a multibillion-dollar, 55-acre project that included a ballpark, [and] residential, commercial, and retail space,” according to a statement provided by a spokesperson to Tax Notes. “In Las Vegas, for whatever reason, they seem satisfied with a 9-acre leased ballpark on leased land. If they had proposed a similar project in Oakland, we feel confident a new ballpark would already be under construction.”