(Bloomberg) -- The U.S. is in the midst of a stadium-building blitz that doesn’t appear to be abating anytime soon. So whether you attend a game or not, get ready to pay up.
Clark County, Nevada, is selling about $648 million in tax-exempt bonds Wednesday to help finance the new 65,000-seat stadium for the National Football League’s Raiders. The Las Vegas project joins other mega muni-bond deals for professional sports stadiums, including the nearly $943 million sale in 2006 to build Yankee Stadium and a $547.4 million deal for Citi Field that same year for cross-town rival the Mets. Both issuers came to market with more project debt in the years after that, too.
More than $32 billion has been spent on 83 venues across five different professional sports leagues since 1996, according to a 2017 study of the sports market in North America by PwC. And more may come, as localities and teams look at the ease with which financing was secured in Las Vegas.
In the last year, the $3.9 trillion municipal market has financed a baseball stadium in Arlington, Texas, with a retractable roof; upgrades to the home of the Cleveland Cavaliers basketball team, and new practice facilities for college athletes in Arizona.
Wells Fargo Securities analyst Randy Gerardes said in a February report that he foresees a continuation in stadium construction, pointing to Major League Soccer as a potential area of growth.
Yet taxpayer subsidizing of professional sports stadiums has strained municipal finances across the U.S., while studies have shown that the projects don’t often produce the kind of economic output as promised.
Nevada Governor Brian Sandoval, a Republican, signed a bill that raises hotel taxes in the area to help pay for the project. The public investment in the project is capped at a whopping $750 million.
Other NFL team may look at the new, glass-domed Raiders stadium with envy and wonder if their team needs these amenities, too. Renderings of the stadium -- surrounded by palm trees near the Las Vegas Strip -- feature a giant torch and sleek lounge areas for fans.
Raiders owner Mark Davis says he wants a Hall of Fame somewhere in the state. That sort of project could be financed with municipal bonds too.
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