When proponents of a publicly funded football stadium wanted to sell lawmakers on the prospect of raising the room tax to pay for $750 million of the $1.9 billion project, they touted the 18,700 construction jobs the stadium would generate — a small but significant dent in the more than 50 thousand construction jobs still lost to the recession.
Laborers 872 President Tommy White testified before lawmakers that in 2006 the construction industry generated $1.4 billion in tax revenue for the state. A decade later that figure stood at $714 million, roughly half of its previous contribution to Nevada coffers.
With the construction industry decimated and families separated by the search for work, lawmakers lapped it up.
The measure passed by an overwhelming majority in a special session convened by Gov. Brian Sandoval in 2016.
Now, with work on the stadium underway, the alluring projection that stuck in the minds of many lawmakers – 18,700 construction jobs, is off by more than a third.
Brian Haynes of Applied Analysis, the point person for the Las Vegas Stadium Authority, says fewer than 11,000 of those projected jobs are actually for construction of the stadium and its practice facility. The company’s analysis projects another 8,000 or so jobs created by the economic impact of building the stadium will be in a variety of industries, rather than the high-paid construction positions that won votes from lawmakers.
An economic impact brief prepared for the Southern Nevada Tourism Infrastructure Committee states the breakdown of direct, indirect and induced jobs and was included as an exhibit to Senate Bill 1, the measure creating the stadium district and room tax component.
“The construction-related jobs as stated are not an error or disparity,” Haynes maintains. “The figure has always been explained and understood as the total jobs created during the construction period.”
But some lawmakers don’t remember it that way.
“It is not about just a job. It is about an opportunity,” said Senator James Settlemeyer during a 2016 hearing on the stadium. “When you look at the concept of providing 18,700 construction jobs and 6,000 ongoing jobs after that, it is beyond compelling.”
Settlemeyer, who supported the proposal, now says he remembers no mention of “construction jobs” being anything but construction jobs.
“At the time during the special session, if I had this information, I don’t know if it would have affected my vote. It would have been great to have that information,” says Settlemeyer, a Republican.
State Sen. Tick Segerblom, one of just a few legislators to vote against the stadium proposal, says he recalls discussion only of construction jobs, not construction-related.
“I am skeptical of the projections and believe that we all should be skeptical of the projections,” Sen. Julia Ratti said in the 2016 hearing. “There are groups of independent economists who say publicly financed stadiums, in general, are a bad deal for the public. Several economists recently have come out and said this deal, in particular, is one of the worst.”
“Do we support a $750-million tax increase that allows corporations to profit and produces low-paying, temporary jobs, or do we invest in the real future of economic development in our State—our children?” asked Susie Lee back in 2016. Lee is currently the Democratic candidate in the Congressional District 3 race.
While the economic benefit of 18,700 construction jobs was a key selling point to legislators who voted for the public funding component, Guy Hobbs, a financial analyst and member of the Southern Nevada Tourism Infrastructure Committee, says the accuracy of such projections is difficult to confirm.
“At what point do you measure jobs created as a result of the stadium? It’s difficult to quantify,” says Hobbs.
“Economist-speak” makes the task of verifying the projections even more difficult — as the number of jobs projected is not equal to the number of people employed, especially on a large construction project such as the stadium, where jobs are temporary by nature and some tradespeople may only work for a few hours.
“That’s 18,700 ‘person-years of employment’. And that’s over three and a half years. It’s also the ripple effect on and off the site,” says Jeremy Aguero of Applied Analysis, who modeled the projections given to lawmakers. “Person-years of employment” is a measure determined by the number of hours worked by an employee in a year. More than one worker — multiple temporary workers — can comprise one person-year.
The equation Aguero used to arrive at the 18,700 “construction” jobs, which are temporary, provides three projections:
- Direct effects, or the wages paid to an estimated 10,829 “person-years of employment” in the construction of the stadium and its practice facility. The average wage is projected at $56,515. This includes construction workers, architects, accountants, and others working directly on the project.
- Indirect effects, or the jobs created by the materials and goods required for the stadium, are estimated to generate 3,554 person-years of employment and pay an annual average of $48,396. This includes suppliers related to the project. “For example, a uniform cleaning service or materials supplier who contracts to provide services or supplies to the project,” says Haynes.
- Induced effects are estimated to generate 4,328 person-years of employment with an average wage of $42,513. These are the “clerks, office staff, servers, cooks and so on” throughout the economy, according to Haynes, who benefit from the spending of construction workers and indirect beneficiaries of the stadium.
“There’s a big difference between ‘jobs’, ‘full-time equivalents’ and ‘person-years of employment,’” says Hobbs. “I know the math so I have confidence the model is accurate. Still, it’s a difficult thing to confirm.”
“My ‘out-of-work’ list was 900 names in 2016. Today it’s at 140,” says White of the Laborers’ Union, noting a long slate of major construction projects underway throughout Southern Nevada. White says he has about 250 to 300 workers at the stadium.
Nevada added 9,100 construction jobs in the 12 months ending July 2018, according to the Associated General Contractors. The 10.9 percent increase leads the nation. But the industry remains 54,000 jobs, or 37 percent, off its peak of 146,400 jobs in June of 2006.
It’s unlikely stadium construction jobs account for a significant amount of the growth.
Between August 2017 and July 2018, the first year the Stadium Authority tracked hours on the site, construction workers have logged 406,000 hours, or the equivalent of 195 full-time jobs.
A memo dated August 29, 2018 from LV Stadium Events Company Chief Operating Officer Don C. Webb to Steve Hill, chairman of the Stadium Authority, says “approximately 650 people are currently employed on the site.”
Clark County Commissioner Steve Sisolak, a proponent of the project who has touted stadium job creation as part of his gubernatorial campaign, declined to be interviewed for this story, saying through a spokesman that more workers will be on the site as the project progresses. The spokesman referred questions to Aguero.
Completion of the project is just under 20 percent, according to monthly reports provided by the Stadium Authority.
The Las Vegas Stadium Authority is made up of appointed members, provides oversight and owns the stadium. The Stadium Authority executed a development agreement with the stadium contractors and an operating lease with the Stadium Events Company, which runs day to day operations. The Raiders executed a 30 year sub lease and non-relocation agreement with the Stadium Events Company.