Oakland Raiders Las Vegas NFL Stadium Soil Study: Cost Overrun Problem Before Groundbreaking
While The Oakland Raiders are being dragged into plans for a politically driven Las Vegas NFL stadium groundbreaking, my sources, including Clark County Commission Steve Sisolak, have provided information that points to significant cost overruns for the planned new home for the Silver and Black.
First, Commissioner, Sisolak, who’s also running for Nevada Governor, issued a tweet on October 24th that read “for those who are calling. The @Raiders continue to do soil and geological testing on the @VegasStadium site.”
When I asked via my video livestream why it has taken the Oakland Raiders seven months to complete a study that normally takes a months, and why they started the study before buying the land March 31st, then bought the land May 2nd, and now are still doing soil studies?
A person who’s in the right place to know about sports stadium construction issues, wrote an email to me that read: “it may be the Raiders are doing a second soils test because the first one that was done resulted in worse than expected values with resulting higher costs and they are shopping for a more friendly soils report.” That person who wrote this has 25 years of experience in this area; I can’t say who he is. For all I know, he may be working on the Oakland Raiders Las Vegas NFL stadium.
Then, there’s this email I received from another source:
“That (Raiders Russell Road site) area floods almost every year. 12-32 inches of water. That why Mark has to pay to expand the sewerage and drainage system. That 500 million extra doesnt cover that cost
i forgot a few months back i had to take a lead safety class. The guy teaching the class is a Oakland Raider fan. He did the testing on the vegas land. He’s said the lead and asbestos levels on that land is unexpected.
So the guy who teaches the lead safety class is from Hayward. He moved to LA some years back. his company does lead and asbestos testing. His company is the first anfmd the largest lead, asbestos and hazardous test company. The contractors sent him the samples. He told the class that Russell Rd had unexpectedly high levels of lead and asbestos.
they sent him 10 sample area. He said they can send 1000 sample it would all come up the same.”
When I followed up with that source to determine if he meants that the $500 million was actually the total new cost for on-site infrastructure because of the drainage problem, he said yes. So, that ads $150 million on to the cost of the Las Vegas NFL stadium project to date.
So, where we are now is this:
Construction Costs: $1.325 million
Land, Infrastructure, Onsite Costs: $500 million
Offsite Transportation Infrastructure Costs: $450 million
Offsite Non-Transportation Infrastructure (Parking) Costs: $195 million
NFL Relocation Fee: $370 million
Practice Facility: $100 million
Contingency: $100 million
Total Project Cost: $3.040 billion
Including the NFL Relocation Fee, the total project cost is $3 billion.
Meanwhile the total funding sources don’t help the situation:
Team Investment: $500 million
Public Investment: $750 million
Private Investment (B of A Loan): $850 million
Total Funding Sources: $2.1 billion
The Raiders are $940 million ‘in the hole’ as of this writing, and given the cost overruns due to the land problem. That does not include operating losses, which in an early spreadsheet, I estimated at $362 million – that was caused by the loan debt from the Bank of America loan – the original stqdium revenue calculations were not sized to fit the loan. In other words, what other new revenue will be pledged to the project? The spreadsheet includes all event and non-event related revenues, including naming rights.
As you can see, the Bank of America Loan causes a giant operating loss that has not been addressed in the way of additional revenue from any known source. The estimates are based on what the stadium consultants and the Raiders produced in 2016. So, we have a negative $362 million operating loss – add the cost overrun and we have a project set to be $1.3 billion ‘in the hole’ as of this writing.
Basically, the Raiders have to fill a giant Las Vegas NFL Stadium $1.3 billion funding gap. This consists entirely of money that would not have to be spent in Oakland in planning for a new stadium.