The “lease heard ‘round the world” arrived publicly with a leaden thud Jan. 26, an inch-thick paperweight drafted by the Raiders and preferred by few.
The Las Vegas Stadium Authority saw the need for a total rewrite to align it with state legislation that provided $750 million in public money toward the facility. Casino magnate Sheldon Adelson saw nothing — he did not know the Raiders planned to submit a lease he had not reviewed and just days later withdrew his $650 million investment in the $1.9 billion project.
Nearly four months of negotiations and a few sleepless nights later, an overhauled lease earned unanimous approval from the Stadium Authority board Thursday afternoon. The revised agreement between the authority and the Raiders-designated stadium events company now goes before NFL owners for approval at their spring meeting next week in Chicago.
No one expects a problem in the Windy City because NFL representatives weighed in with the league’s requirements throughout the negotiations. Lease approval was the only contingency owners placed on their March blessing of the Raiders move to Las Vegas beginning in 2020.
“We’ve been looking forward to getting a stadium project done for more than a decade, and we took a big step today,” Raiders President Marc Badain said.
That step avoids the pitfall of a yearlong delay in the Raiders' arrival that emerged as a possibility at last week’s Stadium Authority meeting. If the sides could not send an approved lease to NFL owners for their May 22-23 meeting, a “distinct possibility” existed the team would not move to Las Vegas until 2021, Badain said.
Dodging one final impediment after months of roadblocks proved little problem for the authority and the Raiders during a comparatively uneventful final week of discussions.
“We got to the finish line in time, but we didn’t start real well,” board Chairman Steve Hill said. “Obviously that kind of set off some events. We lost six weeks in the process, but we made up for it and the Raiders made up for it, and we’re here today where we need to be.”
That false start threw into question whether the Raiders would move to Las Vegas at all, but it also formed a needed base for negotiating the remaining 11 documents needed to begin construction on the stadium by the end of the year. The initial draft submitted by the Raiders cribbed in part from a Minnesota Vikings stadium lease that did not face some of the stringent requirements outlined by Senate Bill 1, Nevada’s stadium funding mechanism.
Authority staff led by Jeremy Aguero and counsel Mark Arnold began working with Raiders attorney Dan Ventrelle to rewrite the first draft soon after its arrival. They needed to address board concerns about maintaining UNLV’s interest in the stadium and maximizing the use of the facility to help meet tourism projections that justify the largest public stadium investment in U.S. history.
Simply coordinating among the Raiders in Oakland, their law firm in Boston, the Stadium Authority in Las Vegas and its law firm in Houston presented logistical challenges that slowed the negotiation process.
“We started with a lease that was not well-received when it came out,” Hill said. “We traded documents back and forth more than we should have, versus let’s sit down and make sure we are at least conceptually on the same page. We’re doing that a little differently moving forward.”
Hill said a meeting already is set with UNLV representatives and the Raiders to compose a broad outline of the joint-use agreement between the tenants of the 65,000-seat domed stadium. He hopes that process will move more efficiently by discussing issues important to both sides before committing them to paper.
SB1 lays out some of the terms of how UNLV and the Raiders will share the stadium, just as it details the major points of the lease agreement. Understanding that the stadium events company controls all stadium revenues, for instance, removes a major point of debate.
Even with legislative guardrails, Hill said much still remained for the team, the NFL, the Stadium Authority, Clark County and Raiders lender Bank of America to negotiate in recent months.
“Frankly, a surprising amount,” Hill said. “The parameters of what was available to discuss is certainly outlined by the law, so we have to follow that law. But there’s a lot of room inside of that. You saw different drafts, different interpretations even in the past week making sure that we tied down those things.”
“Now the major items in the agreement are reflected in the law, but exactly how that is reflected in the lease, there’s certainly been a lot of conversation about that in the last month or so.”
The Stadium Authority board will meet again Monday morning to review and approve its budget for FY 2018. The budget includes tax revenue projections based on historical visitation data from the Las Vegas Convention and Visitors Authority. Collections for the first two months of the increased room tax that funds public investment in the stadium outpaced budget projections, bringing in $8.32 million.
The budget estimates $14.8 million in revenue during fiscal year 2017, which ends June 30.
The projection for 2018 includes a slight bump for growth to get to $49.9 million.