While the Las Vegas Raiders plot to stop Matt Ryan and Julio Jones in Atlanta on Sunday, officials in Nevada are scrambling to avoid defaulting on the NFL team’s stadium.
Clark County floated $645 million in bonds to help fund the construction of the Raiders’ state-of-the-art Allegiant Stadium. Less than two years after issuing the bonds, a steep drop-off in tax revenue means that taxpayers have had to draw funds from a reserve account to make the pending Dec. 1 bond payment of $16.06 million. The county disclosed today that it has pulled $11.55 million from a rainy day account—specifically, the Reserve 2018A Bond Proceeds Subaccount—leaving $57.28 million left in the bond’s reserve account.
That means there is less than two times the annual debt service reserve held, the minimum amount the bonds promised to reserve when issued. However, the county reminded bondholders in the disclosure that failure to maintain this reserve level “does not constitute a default under the Bond Ordinance.” The county owes debt service of $34.7 million next year, stepping up every year to $59.2 million in 2048.
The bonds have various hotel taxes that are pledged to fund the stadium payments. However, Clark County issued the bonds as “general obligation” bonds, which means that, ultimately, the taxpayers of Las Vegas pledge to make sure the football team’s facility is paid for.