The Secret $195M Real Estate Deal In Las Vegas

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Friends,

The Las Vegas Raiders broke in their new $2 billion stadium last night with a 10-point upset win over the New Orleans Saints.

It was a great game, but football performance aside, the new Allegiant Stadium is amazing. I think it’s one of the nicest stadiums in the NFL, right up there with AT&T Stadium (Cowboys), U.S. Bank Stadium (Vikings), Mercedes-Benz Stadium (Falcons), and the new SoFi Stadium in LA (Rams & Chargers) - in no particular order.

Here is a list of the top 5 most expensive stadiums in the world, four of which are NFL stadiums (Source).

1. SoFi Stadium (LA Rams/Chargers) - $4.9 billion

2. Allegiant Stadium (LV Raiders/UNLV) - $1.9 billion

3. MetLife Stadium (NY Giants/Jets) - $1.7 billion

4. Mercedes-Benz Stadium (Atlanta Falcons/United) - $1.5 billion

5. Yankee Stadium (NY Yankees/FC) - $1.5 billion

But for as much praise as the stadium has received, why is no one mentioning the absurdity that went on behind the scenes when the Raiders acquired the land beneath it?

(📸 Credit: Las Vegas Raiders)

We could spend days debating the overall concept of publicly funded stadiums, and whether the economic benefit is actually worth the cost (it’s typically not), but today we’ll stick to the more unusual part of the deal.

Let’s keep it simple - years ago, with relocation on the horizon, the Raiders went looking for potential land in Las Vegas to house their stadium, training complex, and team offices. What they found was even better - a sweetheart backdoor deal.

The Raiders set their eyes on 55.6 acres of land minutes from the Las Vegas Strip, currently owned by the city of Henderson, Nevada. Within months the two brokered an agreement to trade the land for about $6M, a considerable undervaluation at the time of the deal (Source).

Fast forward two years, and the land exchanged hands again - this time at a nice profit.

In February 2020, two years after purchasing the land for $6M, the Las Vegas Raiders sold the unfinished project to Chicago-based Mesirow Financial, immediately entering into a potential 99-year ground lease agreement following the sale (Source).

The purchase price?

$191 million, or over 30x what they paid for it, turning a $185M profit in two years.

As Jon Ralston of The Nevada Independent said (Source):

From a stadium perspective, Las Vegas officials put together a plan which included a 0.88% hotel tax increase to assure local residents they weren’t footing the Raiders bill for Allegiant Stadium.

Even with the pandemic bringing tourism all but to a complete stop, the city has already collected over $62M from the tax - not to mention it’s scheduled to be in place for the next 20+ years.

So what’s the problem?

The problem is that a local government also has a fiduciary responsible to taxpayers through real estate, which they completed neglected by providing the Las Vegas Raiders a sweetheart deal to help facilitate their relocation.

But then again, when it comes to the lack of NFL teams looking to relocate, we’ve seen time and time again that potential cities are willing to do just about anything.

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Extra Credit

Want to see more of the new Raiders facility?

Check out these pictures of the stadium, locker room, weight room, and more.

(📸 Credit: Raiders)

(📸 Credit: Raiders)

(📸 Credit: Mick Akers)

(📸 Credit: Mick Akers)

(📸 Credit: Raiders)

(📸 Credit: Raiders)

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