Las Vegas Stadium Authority officials scrambled Friday to explain the significance of a proposed lease agreement in which the Raiders would pay a $1 annual rent fee as part of their relocation to southern Nevada.
The $1 rent was part of a 107-page document submitted to the board Thursday during a meeting in which Raiders president Marc Badain and executive vice president Dan Ventrelle gave an update on relocation plans.
Board liaison Jeremy Aguero said Friday the proposed $1 annual rent was irrelevant.
"The reality is the board can't receive any of that money because it would jeopardize the tax status of the bonds that we would be issuing," he said. "That is why the deal was structured the way it was."
The issue involves the building of a $1.9 billion domed stadium with a 65,000 seating capacity for the Raiders and UNLV's football team.
The current deal includes $750 million from a hotel tax approved by lawmakers and signed by Gov. Brian Sandoval. The stadium board is required to have a 30-year lease with the Raiders to oversee the project that will need $1.15 billion in private financing.
The Raiders included this clause in the lease proposal: "As payment for its occupancy and use of the Stadium, Stadium Infrastructure and the Stadium Site, the Authority acknowledges that the Team has made a substantial investment in capital expenses to construct the Stadium, and as a result the Team shall be obligated to pay the Authority the sum of One Dollar ($1.00) annually as annual rent (the "Rent Payment")."
Aguero said the clause "essentially has no meaning whatsoever from the standpoint of revenue generated by the board because the board does not participate in the revenues generated by the stadium itself."
The proposed stadium deal includes a $500 million contribution from the Raiders and NFL and a possible $650 million investment from the Adelson family, which owns the Las Vegas Sands Corporation. The relationship with billionaire Sheldon Adelson remains a hurdle because NFL rules prohibit casino owners from having an ownership stake in a team. The Adelson family wants a percentage of the Raiders as part of the stadium deal.
The Raiders have told the board that investment bank Goldman Sachs has committed to help finance the deal without the help of the casino magnate. How such a deal would be structured is not clear.
The annual rent proposal is one more question that has come out of the Raiders' desire to leave Oakland for Las Vegas. By comparison, the 49ers pay $24.5 million annually to the Santa Clara Stadium Authority as part of a lease agreement that is in arbitration because the team wants to reduce the rent by $4 million a year. According to the 49ers, the Dallas Cowboys pay $2 million a year and the Atlanta Falcons pay $2.5 million for their stadiums.
But the Raiders deal is different because the team plans to buy the land and either build the stadium or find a partner to help construct it. The private investment allows the team and its partners to share in all the revenue without paying an annual rent to a government agency.
"If the Raiders are the developers themselves and do not do it with Mr. Adelson they are negotiating with themselves because they will also be the stadium events company," said Aguero, whose economic, fiscal and policy research firm is helping guide the stadium authority.
Stadium authority board members are expected to discuss the release agreement at their next meeting in February.
The Raiders still are awaiting approval of NFL owners before they can officially move forward. They could get the go-ahead during owners meetings March 26-29 in Phoenix. The team needs support from 24 of the 32 owners.
In the meantime, the team has operated as if it were cleared for relocation. Although a stadium site has not been picked, Badain told board members Thursday the Raiders are working to acquire 62 acres across Interstate 15 from Mandalay Bay Resort and Casino. The team has an option to buy the land that extends beyond the March owners meetings. That is important if owners delay the vote until their May gathering.
"We're going to try to assemble the best in the business," Badain told the board, according to the Las Vegas Review-Journal. "We're in a good place from the timing standpoint in that, other than the Los Angeles stadium project, there really aren't a lot of NFL projects going up right now, so there are a lot of companies that have solicited us, and we're talking and meeting with all of them."
Badain also told the board the Raiders have made five presentations to either the NFL's stadium finance committee or all of the owners.
"The last few were very productive," he said. "We spent a lot of time going through the market data and the market research that we had commissioned to assess the viability of the market and the strength of the market. You may recall those were some of the questions that were coming out of the NFL headquarters. We've allayed those fears. We've gotten past that, and now we're on to the next step."
East Bay officials haven't given up on keeping the team in Oakland, although the effort hasn't received any traction in NFL circles. An investment group including former 49ers and Raiders star Ronnie Lott has proposed to build a $1.25 billion, 55,000-seat stadium at the team's present site.