A's Ballpark in Las Vegas Got Another Price Increase

A week and a half ago, we laid out the known financing for the Athletics ballpark in Las Vegas, and discovered that the club and owner John Fisher would still be short by a decent margin--somewhere around $295 million. Earlier this week the A's broke ground on their new ballpark, but there have been two new reports that have further suggested that the funding just isn't there.

The first came in the San Francisco Chronicle, where Susan Slusser reported that the A's Las Vegas project is independent of what happens with the San Jose Earthquakes, according to A's executive Sandy Dean. The Earthquakes are the team that Fisher is now looking to sell, and we used a potential $600 million windfall from that in our previous calculations, while noting that it likely wouldn't be that much that would go towards Vegas.

The expectation wasn't that there would be zero overlap, however.

With that $600 million removed from the Vegas ballpark funding, that would leave Fisher having cobbled together roughly $855 million, or $895 million short of the $1.75 billion initial estimate for the ballpark's construction. We also noted that the last estimate was provided months ago, before tariffs on steel took hold, and was already a $250 million increase from where it had previously been.

As the Las Vegas Review-Journal reported this weekend, John Fisher is now admitting that the ballpark will likely cost somewhere around $2 billion, or "thereabouts." If the cost hadn't gone up, he would have said something like "oh no, much lower," but instead he went with the vague "thereabouts."

Speculation would lead one to believe that the current ballpark figure would be higher than $2 billion as we sit here right now. That the project's budget is still up in the air would seem to indicate that there is no guaranteed maximum price that has been set for construction, which also means that construction hasn't really started in earnest. GMP's are fairly common for projects of this size, and without one, construction typically doesn't begin.

So to revisit the financials of the ballpark real quick. This would all mean that the $855 Fisher has raised is actually quite a bit short of the (at least) $2 billion in funding he needs for this project. Right around $1.145 billion to be exact. While it may not be something big, the reporting coming out of Las Vegas has routinely stated that the Fisher family will finance up to $1.1 billion themselves, if needed.

The gap would appear to be slightly larger than that figure at present, and without the GMP, there is nothing to protect them from that price continuing to go up. Still, minor investors either being added or announced formally could drop that gap back into the acceptable range for the Fisher family. The question is whether they'll put up so much of the family fortune for this project.

Even with the groundbreaking behind us, this is still a developing situation--just not on the corner of Las Vegas Boulevard and Tropicana Avenue.