The relocation of the Oakland A’s to Las Vegas will be a boon to the city’s continued development and population growth, and will benefit casino operators that cater to locals such as Red Rock Resorts, Boyd Gaming, and Golden Entertainment more than Strip properties, a Wall Street analyst said Thursday.
John DeCree, a senior analyst with CBRE, said that while the planned $1.5 billion, 35,000-seat, partially retractable-roof stadium planned for Tropicana Avenue west of I-15 will bring tourists to the city, it won’t have the same impact of the $2 billion 65,000-seat Allegiant Stadium. In baseball parlance, he called it “a single” for Strip operators.
“The presence of another major stadium and professional sports team in close proximity to the Strip will certainly help draw additional tourists and fill rooms, though we suspect the magnitude of impact would be less than that of the Raiders and Allegiant Stadium,” DeCree said. “Initial estimates indicate about 70% of the A’s attendance would be locals. However, the stadium could potentially host some major events, like the MLB All-Star Game, that would serve as a significant event draw for the Strip.”
The Las Vegas Review-Journal cited a report by local economist Jeremy Aguero with Applied Analysis who said a new ballpark would draw 400,000 incremental visitors a year to Las Vegas.
As for aiding the Strip, DeCree cited tentative plans to build a pedestrian bridge across I-15 to connect the new stadium to T-Mobile Arena and Park MGM area.
Late Wednesday, the A’s announced that they’d chosen the former Wild Wild West casino site for the new stadium by entering into a binding agreement to purchase 49 acres from Red Rock Resorts for an undisclosed price. The A’s also secured an option to buy eight additional acres at the site.
The $1.5 billion project would include related amenities at the A’s site. The target is for the A’s to break ground in 2024 and move in by 2027.
DeCree said the Wild Wild West site is about 100 acres, of which Red Rock Resorts, which does business as Station Casinos, will presumably retain control of the remaining acreage. Red Rock Resorts declined comment on the A’s announcement and told CDC Gaming Reports that it wouldn’t discuss the matter until its first-quarter earnings report scheduled for May 4.
As for the benefit to Red Rock Resorts, DeCree called it “a triple. In addition to benefiting from the overall economic development, Red Rock Resorts is cashing in on the sale of 49 acres of high-value land, while also retaining 43 acres at the site for future development or sale, which should benefit from price appreciation given the development of the A’s stadium,” DeCree said. “While Red Rock Resort’s plans with the remaining acreage is unclear, it’s certainly a unique value-creation event for the company.”
The possibility exists that the A’s could relocate to Las Vegas for the 2025 season, given that the team’s lease in Oakland expires after the 2024 season. If that’s the case, the team could play in the Las Vegas Aviators’ AAA stadium that seats 10,000 in Summerlin adjacent to Red Rock Station.
Along with a major construction project, the MLB team and its stadium should provide long-term economic development for Las Vegas and Clark County and that means “a double” for casinos that serve locals, DeCree said.
“Las Vegas remains one of the fastest growing (metropolitan areas) in the country and continues to rapidly diversify its economy,” DeCree said. “Another major professional sports team adds to our long-term thesis for continued population growth and economic development in Las Vegas, which is a benefit to all local casino operators, including Boyd, Golden, and Red Rock Resorts.”
Although it still needs to pass the Nevada Legislature, it appears that Gov. Joe Lombardo and legislative leaders support a plan to create a special taxation district covering the stadium site, which would allow for sales-tax proceeds to be reinvested in the area, along with transferable tax credits of around $500 million.
“Clark County would also have to sign off on the plan, but it presents a unique funding mechanism for the stadium without having to raise taxes, which was a non-starter for Gov. Lombardo,” DeCree said.