Leading stadium finance experts around the U.S. are aghast over the proposed $750 million subsidy being weighed by the Nevada Legislature to help foot the bill for a new football stadium to lure the Oakland Raiders to Las Vegas. They say the proposed terms of the project are shockingly bad, even in comparison with other taxpayer-financed stadium mega-deals.

“This is the worst deal for a city I have ever seen,” Roger Noll, an economist at Stanford University who has studied publicly-funded stadiums for two decades, said of the plan to increase the hotel room tax by 0.88 percent

“It’s not just that its $750 million, but the underlying economic study that attempts to justify the subsidy is the weakest I’ve ever seen,” he said in reference to the official assessment released by the Southern Nevada Tourism Infrastructure Committee last week. The report assumes the stadium will draw more than 450,000 incremental tourists to the region, who will in turn purchase a substantial portion of tickets sold for events held at the 65,000 seat stadium, stay 3-4 days in the city, and spend as much as a typical convention-goer.

“Selling one-third of the tickets to tourists might work if you’re playing the Rams, but if you’re playing Tampa, do you really expect 22,000 people to fly in from Tampa to go to the game?” he said. “If you pull out that component of the economic impact study, you’re left with basically a financial disaster. It does not come anywhere near to paying for itself,” he concluded. “From my perspective as an economist, the financial plan is just not serious.”

The developers and SNTIC maintain that the stadium will generate $620 million in local economic impact by hosting 46 large events each year, including football games, other sport and corporate events and concerts. Noll wasn’t on board with those assumptions. “The notion that this facility is going to generate incremental concerts in the entertainment capital of the world is ludicrous,” he said.

In addition to the $750 million public contribution, the Raiders’ ownership would kick in $500 million and Las Vegas Sands chair Sheldon Adelson would foot the remaining $650 million to pay for the $1.9 billion facility.

Neil DeMause, editor of Field of Schemes, a stadium watchdog site, characterized the stadium deal negotiated between SNITC and the developers – with taxpayers picking up 39 percent of the total bill – as being cut by the ‘worst hagglers in Haggletown.”

“This was a really, really bad job of negotiating. The people doing the negotiating were not the people who would be paying the costs. They don’t have a huge incentive to cut a better deal because they are playing with somebody else’s money,” DeMause said.

The proposal will be examined by the state legislature in a special session starting Monday. But with no firm dollar cap on the taxpayer contribution, and considering that a lease hasn’t even been negotiated yet, the $750 million figure could easily balloon to over $1 billon, once cost overruns, transportation and infrastructure upgrades, day of game costs like policing and traffic control, and future capital improvements are factored in.

“There’s really no competition – this will be the most heavily subsidized stadium in the history of professional sports,” said Noll. “Overall, this is a horrible deal. Somebody remarked the real winners would be Oakland,” DeMause said.

Andrew Zimbalist, a sports economist at Smith College in Massachusetts, pointed to the opportunity cost of land usage in the relatively small valley in which Las Vegas sits as a potential hidden taxpayer expense. To create the full football experience for fans, 15-20 acres would need to be allocated for parking lot space that can be used for tailgating before games, he explained. When the stadium is not being used – which would be most days of the year, even if it does host 46 events annually – the land would be rendered unproductive, unable to yield the same tax revenues that a strip mall, housing complex, or office development might deliver.

Zimbalist, who has also written extensively how stadium projects fail to deliver their promised economic impact, also noted that the Vegas deal is bucking a trend that has emerged over the past decade of new NFL stadiums being largely privately financed. Gillette Stadium in New England, Levi’s Stadium outside of San Francisco, and MetLife Stadium in New Jersey, home of both the Giants and the Jets, were all constructed primarily or entirely with private funds.

Stanford’s Noll also warned that such a drastic hike in the hotel room tax would be a short-sighted move that could have major unforeseen consequences. “The tourism community needs to worry about the effect on total visitors of these taxes,” he said. “The notion you can impose a tax of that magnitude and have no effect is foolish. If these visitors don’t materialize, the hotel and casino industry is going to experience a huge cost.”

That concern was echoed by DeMause, who stated that money spent by tourists on sporting events is usually diverted from other leisure activities. “We’ve seen this time and again with studies. It’s fairly clear that the vast majority of money spent on sports, even by visitors, is being cannibalized.”

DeMause was also critical of the way local media has portrayed the debate, saying that it has created a false dichotomy between the SNTIC and the developers, and that it has limited its reporting largely to what important local people are saying about the deal. “The media coverage has been pretty bad. It has tended to reflect the views of local politicians and local business leaders without doing much independent vetting of whether this makes sense or how the economics of it would work,” he said. “[Supporters] have done a very good job of making this seem legit. They’re trying to make this seem like a fait accompli so the legislature approves something.”

Both Noll and DeMause concurred that the absence of a lease agreement, or even an assurance that the Raiders will even re-locate to Vegas, should be a major concern. “Usually when a political body is deciding whether to fork out this kind of money, they would have a real plan in place. This is like signing a blank check,” Noll said. “Other than that, it’s a great deal.”

A spokesman for the Las Vegas Sands Corporation, key backers of the project, did not return a request for comment on the stadium proposal or on the economic assessment.