The Oakland Raiders are in a tough spot in their attempt to relocate to Las Vegas from Oakland, and one has only to look at the second version of the proposed stadium lease agreement with the Las Vegas Stadium Authority, with respect to the Southern Nevada Tourism Infrastructure Act (or SNTIA) to see that.
The SNTIA was signed into Nevada law October 17th of 2016, and basically governs what documents are to be prepared in conjunction with building a new stadium for an NFL team – in this case, the Oakland Raiders, which were granted the right to leave Oakland for Las Vegas on March 26th of 2017.
The SNTIA specifically states that a lease between the NFL team and the “Stadium Events Company” and to the Stadium Authority (the Las Vegas Stadium Authority) should be formed. The “Stadium Events Company” is: Sec. 18. “Stadium Events Company” means a person whose business is organized under the laws of this State for the purpose of leasing the National Football League stadium project from the Stadium Authority and owned by: 1. The National Football League team or its affiliate; 2. A developer partner or its affiliate; or 3. The National Football League team or its affiliate and a developer partner or an affiliate of a developer partner.
Also with respect to the “Stadium Events Company” and the Stadium Authority, the SNTIA reads that the Stadium Authority must: “6. Require and receive such audits and other measurements of the performance of a developer partner or the Stadium Events Company as it deems necessary to ensure that the operation of the National Football League stadium project complies with sections 21 to 37, inclusive, of this act, except that the Stadium Authority may not require an audit of the general business of the National Football League team or any developer partner. 7. Consider and approve or disapprove: (a) An annual capital improvement budget for the National Football League stadium project submitted by the Stadium Events Company. (b) Any specific requests for capital improvements proposed by the Stadium Events Company or National Football League team.
Note that the law does not say the National Football League team itself can be the “Stadium Events Company”. The SNTIA law is written with the idea that the Oakland Raiders and the “Stadium Events Company” would be separate entities. While that’s the case, the preliminary lease, as of now, is written in this way according to page 1, 6, and 7 of the lease document: “[Raiders Stadium Events Company]”.
Also, while the lease document allows for different adresses between the Stadium Events Company and the Raiders, many of the rest of the pages identify “Stad Co” and “Stadium Events Company” as one. The lease agreement should be re-written with the idea of making sure the language clearly follows what the SNTIA calls for, rather than leave room for misinterpretation. The fact that a “Stadium Events Company” has not been secured as of now should not be a deterent to crafting a lease agreement that clearly and consistently follows the SNTIA. This is important, because on at least one occasion, the Raiders Legal Representative Dan Ventrelle has signed a letter to the Las Vegas Stadium Authority as if the Raiders were both “team” and “Stadium Events Company”.
If the Raiders and the Stadium Authority have not identified a “Stadium Events Company”, what’s the rush in allowing what appears to be a cutting of legal corners? Having lease and letter documents written as if a “Stadium Events Company” exists is not going to effectively speed up the process leading toward stadium construction, or increase the rate of sales of personal seat license deposits connected with the project. If the Raiders and the Las Vegas Stadium Authority are behind what really is an aggressive and unrealistic 2020 schedule, then why not admit it?
Non-Relocation Agreement Document Not Written, Presented, Or Signed By Oakland Raiders
In total, there are 12 documents that have to be created, presented, reviewed, changed, and eventually signed before stadium construction can start without a hitch: Clark County Development Agreement, Project Financing Agreement, Stadium Transfer Agreement, Land Transfer Agreement, Las Vegas Stadium Board Findings, Stadium Lease Agreement, Stadium Development Agreement, Private Seat License Agreement, Team Use Agreement, Community Benefits Agreement, UNLV Joint Use Agreement, Raiders Non-Relocation Agreement, and the Leasehold Mortgage Agreement.
Of these, the Raiders Non-Relocation Agreement is arguably the most important legal guide other than the lease agreement and the SNTIA itself. To date, that document that Oakland Raiders Owner Mark Davis said would not be an issue as he planned to live in Las Vegas for the rest of his life, is as of this writing, still not in existence even after the NFL granted the Raiders the right to leave Oakland. This, while Clark County, Nevada has started to collect the monthly revenue from the hotel tax increase for the stadium, and which will be collected over a 30-year-period to pay off the $750 million construction subsidy. Yikes!
Perhaps the Raiders are having a hard time with the SNTIA’s edict that the University of Nevada Las Vegas be a co-tenant in a facility that they think they’re supposed to call their own. Where the Raiders lease calls for a sublease with UNLV, the SNTIA calls for UNLV to be a part of the lease agreement itself with the Raiders:and the Stadium Authority. Take a look from page 18 of the SNTIA:
…3. A lease agreement entered into by the Stadium Authority with the Stadium Events Company described in paragraph (d) of subsection 1 must set forth the requirements and responsibilities of the Stadium Events Company with respect to the operation of the National Football League stadium project and must:
(a) Grant the Stadium Events Company full operational control of the project;
(b) Not contain any provision that interferes with the discretion of the Stadium Events Company to operate the project, including, without limitation, a provision restricting in any manner the programs or events that may be held at the project;
(c) Authorize the Stadium Events Company to enter into an agreement with another person to operate the project on a day-to- day basis, as deemed necessary or appropriate by the Stadium Events Company;
(d) Establish a minimum standard for the maintenance of, and capital reinvestment in, the project to ensure that the design and development standards set forth in sections 21 to 37, inclusive, of this act are maintained or enhanced throughout the term of the lease agreement;
(e) Provide for the annual allocation of the revenue from, and expenses of, the operation of the project in a manner consistent with sections 21 to 37, inclusive, of this act;
(f) State that the Stadium Events Company and the developer partner are liable jointly and severally for the operating losses of the project or the Stadium Events Company;
(g) Provide for the accommodation of a sufficient number of dates to host at the project the regular and postseason home games of the University football team, subject to the following conditions and restrictions:
(1) Any National Football League event has priority of use of the project and the National Football League team has priority to use the project for its home games and priority over dates, stadium assets and the playing surface;
(2) Any date for a regular or postseason home game of the University football team at the project must:
(I) Not conflict with the use of the project by the National Football League team for a home game of the National Football League team;
(II) Not conflict with major events that are not National Football League events that were scheduled to be hosted at the project before the University finalized the schedule of home games for its football team for the applicable season;
(III) Be mutually agreed upon by the University and the Stadium Events Company; and
(IV) Be approved by the Stadium Authority; (3) After the University has finalized the schedule of home games for its football team for the applicable season and the dates of those home games have been approved by the Stadium Authority, the date of a home game may not be changed to accommodate an event that is not a National Football League event without the
approval of the University; and (4) If a change to the schedule of home games for the
University football team is proposed for the purpose of allowing a home game of the team to be televised, the Stadium Events Company or the National Football League team must use reasonable commercial efforts to assess the feasibility of the change and allow the change to be made if it is commercially reasonable, except that such change must not interfere with or impair the ability of the National Football League team to play a home game at the project;
(h) Establish a reasonable rent to be paid by the University for the use of the project for the regular and postseason home games of its football team, except that for each regular season home game of the football team, and not more than three other events selected by the University, the reasonable rent must not exceed the actual operational or pass-through costs, excluding any fixed costs, to host the game or event at the project;
(i) Provide that on the date of a regular or postseason home game of the University football team
(j) The University must be given such access to the project and its facilities and amenities as is reasonably necessary to create an environment reasonably consistent with a home game for a college football team in Division I Football Bowl Subdivision, or its successor division, of the National Collegiate Athletics Association or its successor organization;…
Also the SNTIA law does not allow for a sublease between UNLV and the Raiders Stadium Company or Stadium Events Company.
UNLV Pays Rent; Raiders Don’t – In The Conventional Way, At Least
You can bet that UNLV having to pay rent in a stadium where the Raiders are allowed to not pay rent in the conventional sense is a major issue. The SNTIA calls for UNLV to pay stadium rent, however the lease agreement specifically says that the Stadium Company pays, in large letters, NO RENT. It’s almost like UNLV was deliberately given financial stress connected with the stadium project, whereas the planners are doing everything to leave the Raiders without any.
Maybe it’s an issue of team colors? The UNLV official colors are scarlet and grey; Mark Davis didn’t want to share Levi’s Stadium with the 49ers because, as one Niners official once told me “Mark doesn’t like that the seats are red”.
Whatever the case, it’s very clear that there are already a lot of problems and issues with the Oakland Raiders Las Vegas Stadium Lease drafting process. The idea of the SNTIA was to make sure UNLV gained a new football stadium as much as (arguably more) than an NFL team for Las Vegas; now it looks like the University is getting second class treatment, and if that’s not resolved, it could derail the Raiders efforts.
Indeed, UNLV, angered over the rent issue, could work to stall the drafting of the Raiders Lease Agreement for 18 months from the date of collection of the monthly stadium hotel tax revenue, or March 1st 2017, which would be September 1, 2018 – thus triggering a set of actions leading to a staidium only for UNLV, as per SNTIA law.
Stay tuned folks. This is so rocky, the Raiders are going to beg the NFL to stay in Oakland if the situation does not improve.