Former Nevada Governor Brian Sandoval, also recently named president of the University of Nevada, Reno, took to the virtual stage in the closing keynote at CRE.Converge Virtual 2020 to lead a wide-ranging conversation on how the Vegas Golden Knights and Las Vegas Raiders have shaped the city and added economic value and community spirit to the entertainment capital of the world.
Sandoval interviewed Marc Badain, president of the Las Vegas Raiders NFL team, and Kerry Bubolz, president of the Vegas Golden Knights NHL team.
Sandoval: What brought your sports organizations to Las Vegas?
Badain: The [Oakland] Raiders had spent the better part of 20 years trying to get a stadium project off the ground. We couldn’t find a suitable opportunity in the Bay Area and had started looking at other markets, including Los Angeles. Then, Las Vegas approached us and already had a coordinated group of business and political leaders in place who helped us get a deal done here. There was a real sense that the community wanted a sports franchise and would support it, and the public-private partnership to develop the stadium made sense for our team, fans, city and state. Of course, it took some time to get the deal done, in terms of the financing and land acquisition, but once it was in place, we assembled the development team and executed the vision in a four-year timeframe.
Bubolz: Our owner Bill Foley took the risk and had the foresight for this great opportunity in Vegas. At the time, Las Vegas was the largest U.S. market – more than 2.3 million people live here – that didn’t have a major sports team. [Foley] looked at all the variables – things like cost of living, fast-growing companies in the market, and discretionary income. When we calculated all those factors, it placed Las Vegas ninth in the 24 markets in the U.S. hockey league. We also studied the average ticket cost of a show on the Las Vegas Strip. We projected that if the average ticket price for a show aligned well with a ticket price for an NHL game, we had a great opportunity to add to the entertainment here and build a real fan base.
Sandoval: Was the fact that Nevada has legal sports betting an obstacle in choosing to locate here?
Bubolz: From our perspective, that was an obstacle for all major league sports teams. NHL Commissioner Gary Bettman encouraged us to look at the gaming element from another perspective. In his conversations with the gaming industry, he told us that he came away [with the impression] that Las Vegas may be the safest place to have a team because of all the gaming industry regulations.
Badain: I echo Kerry in that a lot of it was about education. We had skeptics from an ownership and head office standpoint. We talked to the leadership at the University of Nevada, Las Vegas, who helped us understand that the regulatory environment here made it a very safe place. Once we had that information available and could understand it, it eliminated a very big stumbling block.
Sandoval: How do you measure your team’s economic impact on the city?
Bubolz: The value of a franchise is hard to calculate. There are evaluations of these types of contributions by financial publications that are good starts, but they don’t capture the full scope, like the impact of naming rights and television rights. There are so many components for how a team ties into a community. You have to look beyond only the financial measurement piece to see the overall impact. For example, I encourage people to go out on the Las Vegas Strip on any game day and you’ll see the economic impact on this community. Visit a restaurant or any of the establishments near our facilities, and see the people in the hotels and restaurants. That plays out across the market – it’s not just people coming to the actual game at our facility. People are going out and getting together to watch the team, and it gives the community a confidence.
Badain: Traditional metrics are really hard to apply to a sports team. Certainly, they are a factor, but there are so many others, like the buildings we operate in and events they generate 365 days a year. [We conducted] one study that evaluated stadium opportunities and the value of having a city name before the team, like the Las Vegas Raiders or New Orleans Saints. That name value resulted in more than $110 million in traditional media value alone, just by seeing and hearing that city name repeated. Only 30 cities have an NFL team, and Las Vegas is proud of that. [To calculate the value] we take it next level – it’s the impact of all the jobs created, economic viability, where our fans live and spend their money. Las Vegas has always been a tourist destination, so adding home sports teams to the entertainment aspect makes a fantastic combination.
Sandoval: A team’s impact is not only the arena and surrounding area, but also around the practice facilities you’ve developed.
Badain: We looked at teams that had really built communities around their facilities, like Dallas. We knew we were looking for ancillary land for more than a practice facility – we wanted the home office and other facilities. In Henderson [where the Raiders practice facility is located], you wouldn’t believe how quickly additional real estate followed us here. It was a catalyst. In my opinion, it’s the best facility in the league and we still have 30 acres for lots of growth and development in Henderson.
Bubolz: Our practice facility, City National Arena in Sutherland, is a $32 million investment that we began in 2016 for training and development. But one of our goals was to build a love of hockey here, so it’s turned into a community center, where not only do we practice, but it serves as a home to youth and adult leagues. A lot of development has followed, including a Triple-A baseball stadium and commercial development all around. Because of that success, we are getting ready to open Lifeguard Arena, another facility on Water Street in Henderson, Nevada. This is another community center – a $28 million development that’s home to our American Hockey League Henderson Silver Knights. The amount of activity in that area is amazing. Since we announced our plans in mid-2019, residential home values have risen 26%; commercial real estate value has increased 20% from an average square foot from $147 per square foot to $177; and even vacant land value has gone up 31%. Numerous projects along Water Street and the surrounding area started taking shape when others saw that the Golden Knights and Silver Knights were making a significant investment there.
Sandoval: What are your reflections on your arenas?
Badain: There is no more beautiful arena! We knew that if we were going to build anything in Las Vegas that it had to be iconic. And we’re right across the freeway from the Strip, and so we didn’t need to compete with it. There are lots of ideas still coming for the area around our arena, and we’ve been asked to partner in lots of them. We are eager to get fans in the stadium [post-COVID]. We can do dry runs and test modules all we want, but we’re ready to get 65,000 fans inside the building, when we can, and see if all of our plans made sense. We’re looking at it from a positive angle: We have another year to prepare, and we can’t wait to see how it goes.
Bubolz: The biggest surprise for me was how our practice facilities were designed to prepare our teams, but they’ve turned into community centers and good businesses. The sponsorships and community aspects we’ve gained have given us a vision for how we can continue to grow this great game throughout the valley.
Sandoval: What are your feelings on the social impact your teams have had on the community? Both of your organizations were instrumental in helping the community heal after the October 1, 2017, shooting [at the Route 91 Harvest music festival on the Las Vegas Strip].
Badain: The first employee we moved here was our vice president of community relations. We didn’t know how tight-knit the community was, and we learned that very quickly. The tragic shooting happened soon after our approval to move the team here. We really saw the community come together, and being a part of that made a big difference to us.
We spend a lot of time trying to grow the game of football, but we’re also focused on military causes, like Share Village, which takes care of homeless veterans, and domestic violence prevention. We have 53 players, plus coaches and staff, who live here and are establishing deep roots in the community. The Raiders have more than just a financial commitment here. This is a small community that takes care of one another, and we’re happy to be here and help raise the profile.
Bubolz: From day one, we’ve had a commitment to this community; in fact, our team statement is, “Community is a contact sport, just like hockey.” From business operations to players to coaches, we all live and breathe that on a daily basis. Certainly, that was accelerated by the October 1, 2017, tragedy. We were 10 days away from a huge celebration – our home opener here at T-Mobile Arena. Once we got through initial difficulties of making sure that our staff and players were okay, we set our celebration aside and started thinking about how we could use our platform to help the victims, first responders, and the entire community. We knew we had to honor the victims of that terrible tragedy at our game, and so we had a pregame ceremony that didn’t leave a dry eye in the area. After that, we scored four goals in the first 10 minutes of the game, and we really think the spirit that night helped the community come together and have a reason to smile and celebrate. It helped accelerate our great connection to this community.
Sandoval: Thank you to the Knight and the Raiders for giving our community an experience unlike any other. Las Vegas is entertainment capital of the world and now we hope to be the sports capital of the world too!
Kathryn Hamilton is Vice President for Marketing and Communications at NAIOP Corporate.