Week 3 Pro Sports Facility Financing

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1 Pro Sports Facility Financing Allegiant Stadium and Chase Center Vito Grieco American Public University SPMT 410: Applied Concepts in Sports Finance Dr. Daniel Hedrick August 27, 2023

2 **Pro Sports Facility 1: Allegiant Stadium (Las Vegas, Nevada) ** - **Cost of Facility:** - The Allegiant Stadium, home to the Las Vegas Raiders of the NFL, cost approximately $1.9 billion to construct. - **Funding:** - The majority of the funding for the stadium came from private sources, with the Raiders' owner contributing a significant portion. Additionally, a hotel tax was implemented to generate revenue to cover the public's share of the costs. - **Team Relocation or New Construction:** - The Raiders relocated from Oakland, California, to Las Vegas, prompting the need for a new facility. - **Public Vote:** - There was no public vote specifically for the construction of Allegiant Stadium. The funding mechanism involving the hotel tax was approved by the Nevada State Legislature. - **City Impact:** - In my opinion, the building of Allegiant Stadium was a positive move for the city. The stadium not only provided a new home for an NFL team but also has the potential to boost tourism and generate economic activity. The increased attention on Las Vegas due to the stadium's presence could lead to long-term benefits for the city. Explanation: **Pro Sports Facility 1: Allegiant Stadium (Las Vegas, Nevada) ** *Cost of Facility:* The Allegiant Stadium, a state-of-the-art sports venue located in Las Vegas, Nevada, stands as a prominent example of modern stadium architecture. The facility, built to house the Las Vegas Raiders of the National Football League (NFL), came with an estimated cost of approximately $1.9 billion. This substantial investment speaks to the scale and ambition of the project, aiming to provide both fans and athletes with an exceptional sporting experience.

3 *Funding:* The funding model for the Allegiant Stadium is a mix of private and public sources. A significant portion of the stadium's cost was covered by private financing, with the Raiders' owner contributing a substantial sum to support the construction. The public funding component, however, was innovative in its approach. The state of Nevada implemented a hotel tax to generate revenue to cover its portion of the costs. This approach reflects a collaboration between the sports franchise and the local government to ensure that the financial burden was shared and not solely placed on taxpayers. *Team Relocation or New Construction:* The construction of the Allegiant Stadium was tied to the relocation of the Las Vegas Raiders from Oakland, California. This team move was a pivotal moment not only for the franchise but also for the city of Las Vegas, which was previously without an NFL team. The decision to build a new facility was driven by the desire to provide the team with a modern and suitable venue in its new home. *Public Vote:* Interestingly, there was no direct public vote specifically pertaining to the construction of Allegiant Stadium. Instead, the project's funding mechanism, involving the implementation of a hotel tax to support the public's share of the costs, was approved by the Nevada State Legislature. This approach, while avoiding a direct public vote, ensured that the decision was made through the state's legislative processes. *City Impact:* From my perspective, the construction of Allegiant Stadium was a positive move for the city of Las Vegas. The stadium not only fulfilled the NFL's presence in the city but also holds the potential to drive substantial economic benefits. Las Vegas is a global tourism destination, and the presence of a professional sports team can enhance the city's appeal to a wider audience, potentially leading to increased tourism and spending. Moreover, the construction phase itself provided job opportunities and injected funds into the local economy. While the costs associated with such projects are significant, the long-term potential for economic growth and cultural development outweighs the initial investment.

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4 **Pro Sports Facility 2: Chase Center (San Francisco, California) ** - **Cost of Facility:** - The Chase Center, where the Golden State Warriors of the NBA play, was constructed at an estimated cost of $1.4 billion. - **Funding:** - The majority of the funding for the Chase Center came from private financing by the Golden State Warriors ownership group. - **Team Relocation or New Construction:** - The Warriors moved from the Oracle Arena in Oakland to the newly constructed Chase Center in San Francisco. - **Public Vote:** - There was no public vote specifically for the construction of the Chase Center. The project received various approvals from local government bodies. - **City Impact:** - In my view, the creation of the Chase Center was a favorable decision for the city. The modern facility not only provided the Warriors with a state-of-the-art home arena but also revitalized the area around the venue, potentially leading to increased business and development. While concerns about gentrification were raised, the overall economic and cultural benefits are likely to be substantial. **Pro Sports Facility 2: Chase Center (San Francisco, California) ** *Cost of Facility:* The Chase Center, situated in San Francisco, California, is a modern marvel that serves as the home arena for the Golden State Warriors of the National Basketball Association (NBA). The construction of this impressive facility came at an estimated cost of $1.4 billion, signifying the commitment to providing players and fans with a cutting-edge sports environment.

5 *Funding:* The majority of the funding for the Chase Center was secured through private financing. The ownership group of the Golden State Warriors played a pivotal role in providing the necessary resources to bring this project to fruition. This approach reflects the strong investment and dedication of the franchise's owners to create a state-of-the-art arena for their team and fan base. *Team Relocation or New Construction:* In the case of the Chase Center, the Golden State Warriors relocated from their previous home, the Oracle Arena in Oakland. This move represented a shift from one city to another within the larger Bay Area region. The decision to construct a new facility was driven by the desire to provide the team with a more modern and versatile venue, which could accommodate a wider range of events and experiences beyond basketball games. *Public Vote:* Unlike some other sports facility projects, the construction of the Chase Center did not directly involve a public vote. The project received various approvals from local government bodies and underwent regulatory processes to ensure compliance with zoning, environmental, and development regulations. *City Impact:* In my perspective, the construction of the Chase Center was a well-considered decision that has positive implications for the city of San Francisco. Beyond being a home for basketball games, the Chase Center has the potential to revitalize the area around it, leading to increased business activity and urban development. While concerns about potential gentrification and displacement may arise, the overall economic and cultural benefits brought by the arena are substantial. The Chase Center serves as a hub for entertainment and community engagement, potentially enhancing the city's profile as a sports and cultural destination. **Summary:** In conclusion, the Allegiant Stadium in Las Vegas and the Chase Center in San Francisco exemplify the evolving landscape of pro sports facilities. Both facilities were constructed within the past decade to accommodate professional sports teams, representing significant investments in the cities' sports and entertainment infrastructure. While the funding models and public engagement strategies differed for each project, both had the potential to stimulate economic growth and cultural development. The Allegiant Stadium's partnership between private investment and innovative public funding mechanisms showcases the potential benefits of collaboration between sports franchises and local governments. The Chase Center's reliance on private financing and its impact on urban renewal emphasizes the role of modern sports venues as catalysts for broader community development.

6 References: Shaus, M. (2022, December 18) Allegiant Stadium’s success is a case against stadium subsidies. https://thenevadaindependent.com/article/allegiant-stadiums-success-is-a-case-against-stadium- subsidies Bernstein, D. (2020, September 21) Inside Allegiant Stadium: Cost, capacity & more to know about Las Vegas Raiders' new home . https://www.sportingnews.com/us/nfl/news/allegiant-stadium- raiders-cost-capacity/kqncox5z1g0o1n508gysllqyv Canales, K. (2020, March 11) San Francisco's glitzy new Chase Center is about to open, and the Golden State Warriors basketball team will have a new home. https://www.businessinsider.com/chase-center-golden-state-warriors-stadium-san-francisco- photos-2019-8 Chase Center Fact Sheet https://chasecenter.com/photos/4PoCIO3htWMZHHHT7BDnXZ

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