DATE:      22/02/2019

TO: the State legislature

FROM: Las Vegas mayor

RE: Impacts analysis done for the new Raiders Stadium.

Thank you for allowing us the opportunity to show the economic analysis for city planning. As requested we have evaluated the impact analysis done for the new raiders’ stadium. This involves the geographical scope of the analysis, various projections assumptions, and the use of a discount rate among many more others. The review also evaluates the desirability of switching to the New Raiders’ Stadium in Las Vegas. Based on our research, we were able to evaluate the following;

– The geographic scope of the analysis.

– The use of multipliers to calculate direct, indirect, and induced effects.

– The discussion of spillover, intangible, or other benefits.

– The various assumptions embedded in the projections.

– The use of a discount rate and time horizon to calculate net present value.

– The various costs of public investment in relation to the project.

The geographical scope of the analysis.

Las Vegas stadium is the working name for the new stadium that is being built. It is located 62 acres west of Mandalay Bay at Russell road. The location of the new raiders will significantly impact the city and nation at large. A lot of people will beconverging into the stadium to watch different games as they cheer their favorite artists. The stadium is designed at$1.9 billion cost, an indicator that the stadium will have a calm atmosphere where the visitors will always feel entertained. Who doesn’t like to see his/her home team win? The stadium, therefore, gives, the NFL Fans’ an opportunity to see their team win in thestadium. The location is also secure; this means that the spectators will always be safe while in the stadium. The stadium geographical location is, therefore, very suitable. We highly appreciate for the approval of the $750 million to finish the construction of the stadium.

The use of multipliers to calculate direct, indirect, and induced effects.

In the new raiders’ stadium, there will be three types of workforce needed. Use of multipliers was utilized to calculate the economic impacts of these workforces.

Direct workforce; Various construction workers will be needed to build New Raiders Stadium, and once it is created, it will be staffed with workers, administrative assistance, cleaning crew among many more; all these individuals will be needed to sustain the stadium. From the analysis done, the direct person-years of employment is 10,800. From the report also, 800-1200 direct stadium-related jobs will be provided. The Stadium is, therefore, very beneficial to the area.

Indirect workforce; The contractors hired to build the stadium will, in turn, need to lease with the land management companies, law firms and other professionals among many more. The stadium will also purchase goods and services from other companies to run their operation. In case it runs out of maintenance, it will need services from other companies. These are the critical indirect workforce in the project.

Induced workforce; when New Raiders employ other people to work in the stadium, they will earn wages and then spend to other activities like healthcare entertainment among many more. This goes to the extent that the dollars made by the New Raiders’ Stadium workers will go back to the Las Vegas economy. In this way, this amount of money will be used to employ new workers in the economy. It is found that the direct, indirect and induced workers will be around 6000 people. This number, in general, will reduce the unemployment rate in the country.

The discussion of spillover, intangible, or other benefits.

Spillover; these are the benefits that occur in a seemingly unrelated context with the event. New Raiders’ stadium will be associated with a lot of spillovers. In the economics and finance literature, there will be a spillover generated by the information. In this case, information about the New Raiders’ Stadium will generate information about other related activities; this will help in the elimination of asymmetries in information. The stadium will lead to more banks, these aren’t related to the stadium, but it is as they try to balance the flow of money in the new economy.

Intangible benefits; the stadium will act as a platform where many companies advertise their trade brand; it will also serve as a free press coverage as well as a public relations area. All these benefits will, not be accounted for in a formal accounting purpose, the annual exposure value of the stadium is expected to be $100 million annually.

Direct benefits; this is the total amount of monetary or non-monetary reimbursement that is provided in return of labor. The stadium will act as a platform where a lot of activities will be carried out, and a lot of money will be provided in return of labor. This helps the economy to grow at large.

The various assumptions embedded in the projections.

The 1^st assumption is that; the total earnings to the state of Nevada is around $260 million while the Clark county earning will be about $335 million. This is a good income in the state because it will help in advancing developments across the nation. The other assumption is that new Raiders’ stadium will help in generation of around $57 million tax. The tax will consist of live entertainment, modified business, hotel, car rental, and NV general funding gaming. The other assumption is that sporting events will, generate $51.7 million in value for the city of Las Vegas. The other assumption to Nevada residents is $83.9. All these assumptions are embedded in the project.

The use of a discount rate and time horizon to calculate net present value.

The net present value is a method of calculating the value of the firm basing on a specified discount rate. It is mostly used in financial and analysis and modeling. The present value formula is

NPV = cash flow/(1 + i)ⁿ

During its first year of operation, the NFL team and the new economic activity can generate approximate $456 million per annum. It is projected that around 6320 jobs will also be created in this case. In 30 yearsof its operation, the stadium is supposed to have generated around 8.7 billion in total output where $5.3 billion are used in the direct new spending. The projected taxed are around $410 million with the 146 Net present value, $146 million.

The various costs of public investment in relation to the project

The value of public investment in the New Raiders’ Stadium is 39%; this is equivalent to $750 million. This amount of money will be used partly in the construction cost, land infrastructure and site cost, practice facility, and contingency. The cost of public investment in return will yield taxes used in developing the state.

Conclusion and recommendations.

We justify the plan to build the New Raiders Stadium.Approving $750 million of public funds to help build the stadium will be essential in the project. The project has numerous benefits to the city of Las Vegas and the residents of Nevada in general.

 
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