Stadium financing info emerges

A’s provide details on development agreement

By Mick Akers - Las Vegas Review-Journal

< black; font-family: Arial; font-size: 12px;">The Oakland Athletics draft development agreement with the Las Vegas Athletics is shedding light on how the Major League Baseball team will finance its planned $1.5 billion Strip ballpark and how the construction process will play out.

< black; font-family: Arial; font-size: 12px;">< 12px;">The 90-page development agreement intorduced Thursday with the Las Vegas Stadium Authority defines the conditions that are needed in order for up to $380 million in public funding to be used on the project and the rate that the money will be in fused into it, which is relative to how quickly private money comes in on the project.

< black; font-family: Arial; font-size: 12px;">The ballpark will be financed by a combination of up to $380 million in public funds — although the team forecasts the number will land around $350 million —along with $300 million in debt financing to be taken on by the A’s and $850 million in equity from team owner John Fisher’s family, according to A’s executive Sandy Dean.

< black; font-family: Arial; font-size: 12px;">“We’re in good shape with the financing,” Dean said. “It’s something we’ve been working on for a long time.” The A’s financing plan was reviewed as part of the relocation process with MLB, which saw unanimous approval by team owners late last year. It was not included in the development agreement.

< black; font-family: Arial; font-size: 12px;">The team will still pursue potential local investors to fund a portion of the project, which would reduce the equity contribution required from the Fisher family. Those potential investors would be given a minority ownership stake in the team, Dean said.
The A's were waiting for the draft development agreement to be introduced and for the stadium design process to be further along before gauging interest from potential investors.

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Stadium Authority Chairman, Steve Hill, said the board is confident in the team’s financing plan.

< black; font-family: Arial; font-size: 12px;">"We’ve said all along that the Fishers have the ability to do that," Hill said following Thursday’s meeting. "Major League Baseball has certified that and looked at it as well."

< black; font-family: Arial; font-size: 12px;">As set forth by Senate Bill 1, the A’s must spend the first $100 million on the stadium project in order to unlock the up to $380 million in public funding. Additionally, the last $50 million in public money to be used will be reserved for closing out the project.
The public money will come in via bonding authority by Clark County and transferable tax credits from the state.

< black; font-family: Arial; font-size: 12px;">Language in the development agreement would allow the A’s to sell personal seat licenses — like the Raiders did with Allegiant Stadium, raising $540 million — to fans interested in securing season tickets at the ballpark. The team hasn’t yet decided if they will utilize PSL for the stadium, but that will be discussed in the coming months, Dean said.

< black; font-family: Arial; font-size: 12px;">The agreement also notes that $380 million is the maximum amount of public money that can be used on the project, and that before that funding can be used on the project, the A's must dedicate and transfer ownership of the ballpark land to the stadium authority.< black; font-family: Arial; font-size: 12px;">
Other aspects include that the design of the stadium be completed, that the team enters into a maximum guaranteed contract and that the public money being used on the project must be allocated in equal portions in relation to the A's private investment in the project.< black; font-family: Arial; font-size: 12px;">
The A’s will be responsible for any cost overruns on the project's $1.5 billion budget.< black; font-family: Arial; font-size: 12px;">The A’s will need to enter into a separate development agreement with Clark County, which will define various conditions associated with the entitlements for the stadium. Those will include aspects such as parking, offsite traffic improvements and fire and police considerations.

< black; font-family: Arial; font-size: 12px;">The stadium authority also formed Athletics StadCo., an entity in which the team will invest its private capital to fund the private portion of the ballpark project. The process is a common one in stadium financing — one which the Raiders also did ahead of construction of Allegiant Stadium.< black; font-family: Arial; font-size: 12px;">Nonrelocation update

< black; font-family: Arial; font-size: 12px;">The A’s draft nonrelocation agreement was also updated at the meeting, slashing the number of out-of-market "home" games the team could play away from Las Vegas.< black; font-family: Arial; font-size: 12px;">When introduced in May, the maximum number was set at seven games per MLB season. The updated figure is now up to seven games every two years, not to exceed four games in a season. Such games would include international or one-off games such as the Field of Dreams games the league has been hosting over the past few years.

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The number of games per two seasons would have 16 MLB teams with more potential games to be played outside of their home market than the A's in Las Vegas.< black; font-family: Arial; font-size: 12px;">
With the 30-year nonrelocation agreement and MLB continuously adding additional nontraditional games, the A's wanted to have some sort of hard number in the agreement as a placeholder for potential future developments.< black; font-family: Arial; font-size: 12px;">
With the amount of time, effort and money being put into the ballpark project, the A's are looking to maximize the use of the stadium.< black; font-family: Arial; font-size: 12px;">Now, with the draft development agreement discussed Thursday, all four major agreements the A's need to have approved have been introduced.

< black; font-family: Arial; font-size: 12px;">The community benefits agreement has already been approved by the stadium authority. The nonrelocation, lease agreements and the development agreement introduced still need to be approved.< black; font-family: Arial; font-size: 12px;">
The earliest the three outstanding agreements could be voted on for approval is the planned Aug. 15 stadium authority meeting. But Hill said it is likely the trio of agreements will be refined over the next several months and will likely be up for approval in December.< black; font-family: Arial; font-size: 12px;">
All agreements with the stadium authority and the county must be approved before construction begins on the A's ballpark, to be located on 9 acres of the 35-acre Tropicana site.< black; font-family: Arial; font-size: 12px;">
Tropicana's owner, Bally's Corp., is in the process of demolishing the former Rat Pack-era resort, with plans to implode the skeletons of the two hotel towers in October.< black; font-family: Arial; font-size: 12px;">
The A's plan to begin construction on the ballpark in April, with the facility scheduled to be completed in early 2028, to be ready for that year's MLB season.
Jessie Rio