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Clark County Once more Makes use of Reserve Fund to Make Stadium Bond Fee

Posted on: June 2, 2021, 02:12h. 

Final up to date on: June 2, 2021, 02:29h.

Clark County and the Southern Nevada Tourism Infrastructure Committee as soon as promised substantial financial advantages for the area by elevating the lodge occupancy tax on on line casino resorts. This was carried out with the intention to assist fund a $1.97 billion NFL stadium close to the Strip.

However lower than a yr after the opening of Allegiant Stadium, the house of the NFL Las Vegas Raiders franchise, the county is accessing reserve funds to fulfill its obligatory bond funds.

Clark County Allegiant Stadium Raiders
Allegiant Stadium, house of the NFL Las Vegas Raiders. Clark County, Nv., made an enormous wager on lodge stays producing sufficient tax income to cowl its $750 million dedication to the $1.97 billion sports activities venue. (Picture: Las Vegas Raiders)

Clark County lured within the Raiders by pledging a $750 million dedication to constructing them an NFL stadium simply west of I-15 and Mandalay Bay. The county contributed the cash in 2017, and raised the funds by issuing bonds on behalf of the Las Vegas Stadium Authority (LVSA).

To cowl the $750 million, Clark County elevated the nightly occupancy tax on lodge room stays on the Las Vegas Strip and surrounding areas by 0.88 %. The lodge tax elevated 0.5 % on all different lodges inside 25 miles of the Clark County Authorities Middle. 

The lodge tax enhance was anticipated to cowl the compensation of the bonds, however COVID-19 modified all the things. In consequence, this week Clark County confirmed that it withdrew $11.7 million from the LVSA’s debt reserve account to finish the $18.6 million bond fee due June 1. 

Tourism Shortcomings

COVID-19 was an unimaginable disaster that led to Las Vegas’ greater than 150,000 lodge rooms being occupied simply 42.3 % of the time final yr. The common nightly charge was simply $120.36, which means the stadium tax was about $1.05 per in a single day keep. 

The June 1 bond obligation marked the second time the LVSA has dipped its hand into its reserve fund. In December, the county took $11.55 million from the account to make good on its fee.

Regardless of the withdrawals, Clark County spokesperson Dan Kulin says all is nicely.

This motion doesn’t represent a default and was anticipated in gentle of the decline in tourism to Las Vegas. Happily, the financing for the Stadium Authority bonds included the funding of a debt service reserve fund to climate financial declines just like the one Las Vegas is presently experiencing because of the pandemic,” Kulin defined.

Jeremy Aguero, a principal at Utilized Evaluation who works with the LVSA, says the reserve fund stays strong. He says the account nonetheless has greater than $54 million, a quantity that he doesn’t anticipate future withdrawals will come “wherever close to that quantity.”

Debt Reserve

When Nevada authorized laws to permit Clark County to assist construct an NFL stadium with tax cash from lodge stays, the invoice mandated {that a} reserve fund be initiated. Income collected by way of the room tax enhance is used to pay down the bond money owed, and likewise fund the reserve. 

Whereas the financing for the stadium stays sound, the headlines of Clark County utilizing a reserve fund to pay the bond obligations may generate extra critics. The MLB Oakland A’s are contemplating following their former Oakland counterpart to Southern Nevada, and mentioned this week a brand new ballpark would price within the neighborhood of $1 billion.

“No extra sports activities groups. Put that cash into schooling,” a On line casino.org reader lately commented on the A’s relocation rumors. 

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