Bills’ new stadium deal carries $850M taxpayer tab, gov says

Mar 27, 2022, 8:39 PM | Updated: Mar 28, 2022, 1:44 pm
FILE - The field is prepared at Highmark Stadium before an NFL football game between the Buffalo Bi...

FILE - The field is prepared at Highmark Stadium before an NFL football game between the Buffalo Bills and the Carolina Panthers, Dec. 19, 2021, in Orchard Park, N.Y. The Bills moved closer to landing $200 million in NFL funding to help finance their bid to build a new stadium, a person with direct knowledge of the situation told The Associated Press on Friday, March 25, 2022. (AP Photo/Joshua Bessex, File)

(AP Photo/Joshua Bessex, File)

BUFFALO, N.Y. (AP) — The proposed $1.4 billion new home for the Buffalo Bills comes with a record $850 million taxpayer price tag in an agreement reached Monday to secure the franchise’s future for the next 30-plus years.

Gov. Kathy Hochul completed seven months of negotiations by announcing an agreement preserving the Bills presence in her hometown, while also calling it a deal that “made sense” in the return on public investment.

The $850 million amount is considered to be the largest public commitment for an NFL facility.

New York will commit $600 million in funds in a deal reached in time for Hochul to include it in the state budget, which by law must be approved by Friday. Erie County will commit $250 million toward the project, while eventually relinquishing control to a newly established state-appointed commission.

The NFL and the Bills agreed to commit $550 million in financing, with team owners Terry and Kim Pegula’s share coming in at $350 million for a facility projected to open in time for the 2026 season. The Bills would be responsible for covering any construction over-runs under the proposed deal.

The taxpayer commitment of 60.7% falls below the 73% share the state and county had previously committed to the Bills to build, maintain and upgrade the team’s existing facility, now called Highmark Stadium, which opened in 1973.

“We’re very excited about this. It’s a great day for western New York and I’m really proud to negotiate such a good deal for the state and our many, many fans,” Hochul said during a teleconference call, which she closed by saying, “Go Bills.”

The proposed 60,000-plus seat, open-air facility to be built on county-owned land across the street from the Bills current home still faces several hurdles required to approve the funding.

The entirety of the agreement is not complete. The parties have yet to negotiate terms of a 30-year lease which would include a non-relocation clause with the Bills facing a penalty should they default on the deal. The taxpayer commitment also does not include annual operating subsidies the state will commit to game-day related and other expenses.

Though the Bills draw fans from across western New York and southern Ontario, they play in one of the NFL’s smallest markets. Buffalo also lacks a major corporate base from which to generate sponsorship dollars in comparison to other franchises.

Anticipating pushback for committing taxpayer dollars to a private entity, Hochul noted the state’s commitment will be returned within 22 years through player salaries in tourism tax dollars, which directly generate $27 million in annual state income. Unlike the New York Giants and Jets, who play in New Jersey, the Bills are the NFL’s only franchise based in New York.

Hochul also noted the state’s $600 million share covers less than half of the costs of the project, and she cited projections that stadium construction will create 10,000 union jobs.

Sochie Nnaemeka, director of the New York Working Families Party, criticized the agreement by saying it further “enriched wealthy investors.”

“Our public dollars should be going toward public goods, and not subsidizing an oil billionaire’s new stadium,” Nnaemeka said in a statement.

Democratic Rep. Tom Suozzi, who is running against Hochul for governor, criticized the deal by saying it saddles residents with higher taxes.

“I support a new Bills stadium, and there was a way to get it built without having the governor forcing hard-working New Yorkers to fork over their tax dollars to help a billionaire donor get even richer,” Suozzi said in a statement.

The family that owns the team, the Pegulas, are estimated by Forbes to have a net worth of over $5 billion. They made their fortune in the natural gas industry and hydraulic fracturing by selling their Marcellus Shale natural gas drilling rights for $4.7 billion to Royal Dutch Shell in 2010. They purchased the Bills for a then NFL-record $1.4 billion in 2014 following the death of team founder and Hall of Fame owner Ralph Wilson.

The Pegulas, who also own the NHL’s Buffalo Sabres, have invested in the city by helping spur downtown redevelopment such as financing the construction of the $200 million Harborcenter hotel and ice rink complex, which opened in 2013.

The agreement came as the the Bills’ stadium proposal was approved at the NFL’s owners meetings in Florida. Owners also approved granting the Bills what’s called a $200 million G4 loan to go toward construction costs, which the Pegulas were required to at least match.

“This is a good investment for everyone,” said Pegula Sports and Entertainment executive Ron Raccuia, who led the Bills in negotiations. “We are very thankful that the governor and county executive showed the leadership that they did. But I think people need to realize that we contribute a lot from a tax standpoint. Every dollar that goes into this stadium will be paid back.”

The Bills are expected to recoup part of their costs by having season-ticket holders — for the first time — pay one-time seat-licensing charges, potentially doubling the price of their ticket package.

The Bills’ existing facility was deemed too expensive to renovate. A state study in November pegged renovation costs at $862 million.

The Buffalo News previously reported the largest commitment of taxpayer funds for an NFL stadium involved the Las Vegas Raiders, with $750 million of public funds directed toward constructing the $1.97 billion Allegiant Stadium, which opened in 2020.

There have been, however, higher splits of public-private funds for NFL facilities, the newspaper found. Taxpayers covered 86% of the $720 million cost to build the Indianapolis Colts’ Lucas Oil Stadium, which opened in 2008. The public commitment for the Cincinnati Bengals’ Paul Brown Stadium, which opened in 2000, covered $425 million of the $450 million construction costs.

In anticipation of the agreement, the Bills already hired the architectural firm Populous to begin rendering plans and designs, which are expected to be completed by fall. Although the stadium will not feature a roof, the Bills plan to have 80% of seating protected from the elements.


Associated Press Writer Mike Hill and Michelle Price contributed.


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