Vital Vegas has been active on Twitter spreading various rumors regarding the potential sale of Rio for several months. The most recent rumor suggests that the property might be transformed into a notable baseball stadium for Major League Baseball games.
Let me escalate the excitement surrounding our Rio sale speculation by adding another intriguing piece of information: As we have previously disclosed, there is a possibility that this could turn into a lucrative real estate venture. An intriguing rumor has surfaced, proposing the potential demolition of Rio, with plans to transform the location into none other than a state-of-the-art Major League Baseball stadium. So, keep your eyes peeled for further developments!
- This tweet was posted by the Twitter account Vital Vegas on October 8, 2018.
Rumors about the sale of Rio have been circulating for quite some time. In 2013, when PokerStars announced that it had been approached with a sales pitch for Rio and the World Series of Poker (WSOP), Caesars Entertainment, the owner of both properties, chose not to respond to the claim. Throughout the years, there have been numerous other rumors regarding the sale of Rio, all of which Caesars Entertainment has vehemently denied.
Caesars Entertainment, an owner of several resorts in Las Vegas, has a property that stands out from the rest. Unlike its counterparts, this particular resort is not situated on the famous Las Vegas Strip. Interestingly, this unique characteristic has given rise to rumors of a potential sale, rumors that have persisted for a decade.
What is the worth of Rio?
The lot size of this Las Vegas resort spans across a vast expanse of 88.53 acres, as per the property records of Clark County. However, determining the precise value of such a luxurious establishment is no easy task. In fact, the taxable assessment for the years 2017-2018 amounted to a staggering $538 million.
I found it interesting to observe the contrasting valuations of the Palms property. According to the county assessor, the tax records estimated its worth at $300 million for the period of 2017-2018. However, Station Casinos acquired the same property for a slightly higher amount of $312.5 million. It is fascinating how the perspectives on the value of a piece of land can differ. The Palms property spans an area of 24.79 acres, which is considerable in size. Situated just one block west of Rio on West Flamingo Road, its location adds to its perceived value. Considering these factors, I believe it is reasonable to accept the tax assessor's appraisal of Rio and use its valuation as the basis for my calculations.
Can a baseball stadium in Rio be realistically built on the land?
The Rio parcel, spanning 88.53 acres, offers ample space for a top-notch professional sports stadium. Positioned on 62 acres, the Raiders stadium, unfortunately, grapples with notable parking challenges. Conversely, the additional 26 acres of the Rio parcel would likely alleviate these concerns. Moreover, its favorable proximity to the vibrant Las Vegas Strip certainly solidifies its standing as a viable and logical choice for a stadium location.
Although the Rio lot appears to be an ideal size and location for a Major League Baseball stadium, there are numerous additional factors that need to be considered.
The estimated cost of Rio, which amounts to $538 million, does not cover the expenses of demolishing the property. Situated on the premises are two towering hotels and an expansive casino and convention center.
If we compare the demolition expenses of Riviera, which amounted to approximately $45 million, with the costs likely to be incurred for Rio, we can see a substantial difference. Rio, being considerably larger and taller than Riviera, raises the question of whether the demolition costs could possibly be confined to a similar range. It seems plausible to speculate that if at least one of the hotel towers were to be preserved, the overall expenses for the demolition and subsequent land acquisition would rise significantly, potentially surpassing $600 million. This estimation takes into account the extensive demolition work that needs to be carried out before any land can be acquired for redevelopment purposes.
For some context, the Raiders invested a whopping $77.5 million in purchasing the land for their stadium. The plot of land was unoccupied at the time.
Spending a whopping $600 million on stadium land poses a significant challenge for budgets. Believe it or not, this figure is roughly equivalent to the combined expenses allocated for both acquiring the land and constructing SunTrust Park, located in the serene suburbs of Atlanta. To put things into perspective, the construction aspect alone accounted for nearly $500 million, and this was before the surge in steel prices owing to the imposition of tariffs.
I can't believe it! Picture this: an open-air stadium in Las Vegas! You know, with those scorching summer evenings, it seems downright impossible. I mean, who wants to play or watch a game in temperatures that routinely reach or surpass 100 degrees? It might be fine for a minor league stadium, but the pros? No way! They won't go for that. Besides, an enclosed stadium would be ridiculously expensive compared to an open-air one. We're talking double the cost, folks! So, if the rumors about a Major League Baseball stadium are true, we're looking at a price tag of around $1.3 billion to $1.5 billion, and that's not even including the cost of the land. It's mind-boggling!
Who is footing the bill for the construction of the stadium?
Las Vegas residents found themselves at the mercy of the Raiders, who managed to execute an audacious scheme to secure an absurd amount of money through stadium taxes. The outcome? A staggering $750 million in bonds that will balloon to over $1 billion, taking into account the looming interest by the time they mature. As part of this plan, the folks of Las Vegas had to endure a 0.88 percent increase in the hotel tax. Astonishingly, while this tax burdened the residents, the Las Vegas Convention and Visitors Authority (LVCVA) also managed to squeeze out a 0.5 percent hike in hotel tax to bankroll their expansion endeavor for the convention center.
As a Las Vegas resident, it was clear to me that the stadium tax did not enjoy much favor among the local community. It seemed like nothing more than a political maneuver, orchestrated by major GOP donors who were determined to assert their influence. With the Republican Party holding a majority in both chambers of the Nevada Legislature, it was no surprise when the GOP governor called for a special session to push forward their agenda.
Unavailability of the perfect storm that occurred in the past makes it highly improbable to replicate the same success this time. The current scenario is further complicated by schools and businesses organizing fundraising events to prevent the loss of teaching positions owing to insufficient funding. Convincing the residents of Clark County to support such an endeavor would be an uphill battle, especially when their own schoolchildren are forced to endure outdated and overcrowded classrooms.
Raising over $1 billion for this project can prove challenging, given historical precedents where sports teams usually contribute only a fraction of the required funding towards their own stadiums. Private funding would be crucial in the construction of a new stadium, and it would likely play a significant role in its realization.
LVCVA does not seem to believe this is taking place.
Near Red Rock Resort in Summerlin, a new minor league stadium is currently being built. The project, which has received a generous $80 million pledge from the Las Vegas Convention and Visitors Authority (LVCVA), has raised some questions about the potential relocation of Major League Baseball (MLB) to Las Vegas. One might argue that the LVCVA's financial commitment to a minor league stadium suggests a lack of serious consideration for the MLB's potential move.
Reports have emerged suggesting that the Oakland A’s, a baseball team with deep ties to their home city, may entertain the idea of venturing into the Las Vegas market. Interestingly enough, their triple-A team is on the verge of relocating to the Summerlin stadium, which no doubt offers convenience. However, one must ponder the feasibility of Las Vegas successfully accommodating both teams. Adding to the intrigue, rumors have circulated that the A’s might soon disclose a fresh stadium agreement in their beloved Oakland.
It appears improbable that Rio will transform into a stadium.
There are much better sites for a stadium if someone has a serious plan to bring Major League Baseball to Las Vegas with private funding. Rio is not a viable option due to its expensive land and the need for extensive demolition work. I highly doubt that Rio will ever become a stadium site.
The prime discussion surrounding a potential stadium often centers around the 58-acre Wild Wild West property located on West Tropicana Avenue. This particular site stands out due to its advantageous factors, such as significantly lower demolition expenses compared to other options. Not only that, but it boasts a prime location in close proximity to the iconic Strip, rivaling the convenience of Rio but at a mere fraction of the land value. It's worth noting that Clark County offers several other parcels that could potentially accommodate a stadium; however, in terms of accessibility to the tourist corridor, the Wild Wild West property may surpass them all.
For the right price, anything can be sold, including the Rio. However, I highly doubt that the buyer would be someone looking to demolish the hotel towers, such as a stadium developer or anyone else with that intention.
