The draft development agreement between the Oakland Athletics and the Las Vegas Athletics details how the Major League Baseball team will finance its planned $1.5 billion stadium on the Las Vegas Strip and how the construction process will unfold.
The 90-page development agreement filed Thursday with the Las Vegas Stadium Authority outlines the conditions for up to $380 million in public financing to be used on the project and the pace at which the money will be injected, which will depend on how quickly private money flows into the project.
The stadium will be financed with a combination of up to $380 million in public funds — though the team predicts the figure will be around $350 million — $300 million in debt financing to be assumed by the A’s and $850 million in equity from the family of team owner John Fisher, according to A’s executive Sandy Dean.
“We’re in good shape with funding,” 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 from team owners late last year. It was not included in the development agreement.
The team will continue to seek potential local investors to fund a portion of the project, which would reduce the capital contribution required from the Fisher family. According to Dean, potential investors would have a minority stake in the team.
The A’s were waiting for the draft development agreement to be submitted and for the stadium design process to be further along before gauging interest from potential investors.
Stadium Authority Chairman Steve Hill said the board is confident in the team’s financing plan.
“We’ve said all along that the Fishers have the ability to do it,” Hill said after Thursday’s meeting. “Major League Baseball has certified it and has also vetted it.”
Under Senate Bill 1, the A’s must spend the first $100 million on the stadium project to unlock up to $380 million in public funding. In addition, the final $50 million of public money used would be reserved to close out the project.
Public funding will come through Clark County bond authorization and state transferable tax credits.
The development agreement would allow the A’s to sell personal seat licenses — as the Raiders did with Allegiant Stadium, raising $540 million — to fans interested in getting season tickets at the stadium. The team has not yet decided whether it would use PSL for the stadium, but that will be discussed in the coming months, Dean said.
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 stadium land to the stadium authority.
Other considerations include the completion of the stadium design, the signing of a maximum guarantee contract by the team and the allocation of public money used for the project in equal parts in relation to the A’s private investment in the project.
The A’s will be responsible for any cost overruns on the project’s $1.5 billion budget.
The A’s will have to sign a separate development agreement with Clark County that will outline several conditions associated with stadium rights. These will include parking, off-site traffic improvements and fire and police considerations. READ FULL STORY HERE>>>CLICK HERE TO CONTINUE READING>>>
The stadium authority also formed Athletics StadCo, an entity into which the team will invest its private capital to finance the private portion of the stadium project. This is a standard process in stadium financing, which the Raiders also undertook before building Allegiant Stadium.
Non-relocation update
The meeting also updated the A’s draft non-relocation agreement, cutting the number of out-of-market “home” games the team could play outside of Las Vegas.
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, with no more than four games in a season. These games would include international or one-off games, such as the Field of Dreams the league has hosted in recent years.
With that many games over two seasons, 16 MLB teams would have a better chance of playing outside their home market than the A’s would in Las Vegas.
With the 30-year no-relocation agreement in place and MLB continually adding additional non-traditional games, the A’s wanted to have some sort of set number in the agreement as a placeholder for potential future developments.
With the amount of time, effort and money being invested in the project, the A’s want to maximize the use of the stadium.
Now, with the development agreement draft debated Thursday, the four major agreements the A’s need to see approved have been introduced.
The community benefits agreement has already been approved by the stadium authority. The non-relocation, lease and development agreements remain to be approved.
The earliest the three pending agreements could be voted on for approval is the stadium authority meeting scheduled for Aug. 15. But Hill said the trio of agreements are likely to be finalized in the coming months and submitted for approval in December.
All agreements with the stadium authority and the county must be approved before construction begins on the A’s stadium, which will be located on 9 acres of the 35-acre Tropicana site.
Tropicana owner Bally’s Corp is demolishing the former Rat Pack-era resort, with the skeletons of the hotel’s two towers set to come down in October.
The A’s plan to begin construction on the stadium in April and finish in early 2028, ready for the MLB season that year.
2024-07-19 15:44:40
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