My (written) testimony to the Nevada Legislature on SB-1 (the stadium financing proposal).

To the members of the Nevada Legislature:

I write today to discuss with you two important aspects of this proposed legislation and underlying stadium financing.

Firstly, the notion that public funds aren’t going to the stadium developers because in fact we the public will own the stadium. In fact, under the terms of the proposed legislation, developers will own the revenue stream, and we the public will own the building. This means that they own the beneficial part of the stadium, and we own the liability. Consider the purchase of a car that you could not drive, or a house you could neither live in nor collect rents on. This is what the people are being offered in this legislation: the opportunity to take on all the liability of being a landlord, without any opportunity to collect rent.

Secondly, in regard to the economic projections and analysis advanced by the developers. It is important to realize, whenever considering such projections and analysis, that the assumptions upon which the analysis is based form the foundation of the conclusions. If the analysis is a building, the assumptions are the foundation upon which it is built. Therefore, if the assumptions are flawed, the foundation is faulty, and the building crumbles.

Assumptions are necessary, because in performing this type of analysis we are attempting to predict the future, so we must make a set of assumptions or otherwise be left with too many variables and an impossible calculation. But, it is prudent to be extremely cautious about the assumptions we make, as they are the foundation of our analysis. If we make broad or optimistic assumptions, our analysis will fail when they do. So, when the developers suggest to you that the Raiders would bring in $500–550 million in annual revenue, be skeptical. Ask, why would we expect them to bring in $200–250 million more per year than they ever have previously? When developers suggest they can sell out 46 events per year (in other words, a full NFL schedule, a full college schedule, and another 30 events), ask whether that seems likely, given the competition for entertainment dollars already present in our city, and the fact that the football games are going to occupy 10–15 of the most desirable weekends of the year — leaving us trying to sell out a 65,000 seat stadium in 110 degree heat.

As each of those assumptions fails or falls short, the projected benefits plummet along with them, leaving Nevadans to pick up the pieces.

Thank you for your time and attention. I would invite you to also consider the letter I have mailed to each of you, copies of which I will forward electronically for your convenience.

Matthew J. Rashbrook