Did las Vegas get to excited about getting a professional football team, especially one that had no place to go? The Big Winner so far is the Raiders.
The stadium the Raiders play in is supposed to be paid for with money from an added room tax at Las Vegas Hotels. Problem is the Las Vegas strip is operating at about a 25% occupancy rate and rooms that are so cheap very little money is being raised.
As a result of a shortfall in tax revenue, Clark County had to withdraw $11.55 million from a debt reserve account to help make December’s scheduled bond payment for Allegiant Stadium. The Las Vegas Stadium Authority was transferred ownership of the stadium from the Raiders, following the completion of the building’s construction.
Money was pulled from the reserve account was used toward the $16.06 million bond payment due Dec. 1 , according to Clark County, which issued the bonds and handled the debt reserve transfer and payment.
Fiscal Year ‘21 room tax collections are insufficient to pay the debt service payment due on December 1 for the Stadium Authority bonds. The total payment due is $16,057,500 of which $11,553,389 was needed from the reserve fund.
After the withdrawal, $57.3 million remains in the reserve fund, which was set up by the stadium authority in the case funds were needed to help make monthly bond payments. Before the withdrawal the debt reserve fund was at 76 percent of the two-year debt reserve target.
A 0.88 percent room tax was imposed on hotel rooms in Clark County to fund the $750 million public contribution of the $2 billion stadium.
The withdrawal from the reserve account was expected because of the drop in visitation and there is no worry that the debt reserve will be exhausted amid the pandemic.
But the coronavirus pandemic has led to a significant decline in visitors to Las Vegas, resulting in lower tax collections.
Financing for the Stadium Authority bonds included the funding of a debt service reserve fund to weather economic declines like the one Las Vegas is currently experiencing due to the pandemic.
