Buffalo Bills Will Receive $850M From New York Taxpayers To Build New Stadium

[TTL News 308]

Quote

 

State and county taxpayers will be asked to commit $850m in public funds toward construction of the Buffalo Bills’ new stadium which has a state-projected price tag of $1.4bn as part of a 30-year lease agreement reached on Monday.

New York state will commit $600m in funds, which will be in included in the budget due on Friday, Governor Kathy Hochul announced in a press release. Erie county will commit $250m toward the project, with the NFL and the Buffalo Bills committing $550m in financing.

The dollar amount is considered to be the largest public commitment for an NFL facility. The deal is meant to secure the NFL team’s long-term future in Buffalo, with the proposed 60,000-plus-seat facility to be built across the street from the Bills’ current stadium.

Although the taxpayer burden of 60% is considered high, the agreed upon funding falls in line historically. The state and county have shared about 73% of the cost to build, maintain and upgrade the Bills’ existing facility, now called Highmark Stadium, which opened in 1973. Under the proposed agreement, the Bills will be responsible for covering any costs that run over the budget.

“I wanted to accomplish two major goals: Keep the Bills in western New York, keep them in the state of New York because this is not just a western New York point of pride, it’s a point of pride for all New Yorkers,” Hochul, a Buffalo native herself, said during a press conference. The second goal, she said, was “making sure that it made sense for our taxpayers in terms of our commitment and our return on the investment, which will be paid off in the next 22 years.”

Without going into detail, Hochul said the project will create 10,000 union jobs with the commitment recouped by the economic activity generated by the team. The state previously projected the Bills – the only NFL team actually based in New York – generate $27m in direct annual income for the state.

 

Read the rest here.

[Ann 263]

I can think of better things on which to spend 850M of taxpayer money.

[Kevin 334]

It is less than expected. Everything I had read was 1 billion of tax payer dollars were going to be used. So you would think NY residents would get a discounted price on tickets and food.  🤣🤣🤣🤣🤣🤣

[Hal 341]

I’m sorry but I would like my share of that 850 million back because I didn’t/ wouldn’t give anything for a new place to play a game ! 
 

[KarenK 383]

1 hour ago, Ann said:

I can think of better things on which to spend 850M of taxpayer money.

There is for sure however that stadium is old and basically becoming dangerous.  Loss of the Bills from NY or even WNY would be devastating for the state economy.   Its not something you would think but now with the online sports betting, even more so.   No new stadium and some other state would lure them in with the promise of one.

I think the current stadium was 100% taxpayer funded so we are getting a discount.  lol

[MsKreed 1,176]

I don't want to be mean or anything.....but Jackals/Enforcers fans kind of made some of the same arguments

 

 😉

Full disclaimer....I married into a family of Giants fans, so.... 

Edited March 28, 2022 by MsKreed

[Ann 263]

1 hour ago, KarenK said:

There is for sure however that stadium is old and basically becoming dangerous.  Loss of the Bills from NY or even WNY would be devastating for the state economy.   Its not something you would think but now with the online sports betting, even more so.   No new stadium and some other state would lure them in with the promise of one.

I think the current stadium was 100% taxpayer funded so we are getting a discount.  lol

Are the owners of the Bills paying anything for this new stadium?  I still believe that $850M taxpayer dollars could be better spent elsewhere.

[Adam 373]

at almost 10 billion dollars annual income AND being classified as tax exempt until 2015....now it gets this little sweet heart deal (10 million in taxes on 10 BILLION in revenues!) 0.1% when i get nailed 30% because of a sign on bonus for work

"The change in the tax status will not alter the function or operation of the League office in any way. However, relinquishing its tax-exempt status will cost the NFL an estimated $10 million or so per year in taxes.  The League will file as a taxable entity beginning with its 2015 fiscal year. 

In exchange, the NFL will get a few big benefits too, including the end of federal disclosure requirements which means the NFL no longer has to disclose its income or the salary of its Commissioner.  Also, lawmakers can no longer hold the league’s tax-exempt status over its head during hearings on unrelated issues."

[Kevin 334]

20 minutes ago, Adam said:

at almost 10 billion dollars annual income AND being classified as tax exempt until 2015....now it gets this little sweet heart deal (10 million in taxes on 10 BILLION in revenues!) 0.1% when i get nailed 30% because of a sign on bonus for work

"The change in the tax status will not alter the function or operation of the League office in any way. However, relinquishing its tax-exempt status will cost the NFL an estimated $10 million or so per year in taxes.  The League will file as a taxable entity beginning with its 2015 fiscal year. 

In exchange, the NFL will get a few big benefits too, including the end of federal disclosure requirements which means the NFL no longer has to disclose its income or the salary of its Commissioner.  Also, lawmakers can no longer hold the league’s tax-exempt status over its head during hearings on unrelated issues."

That is for the NFL corporate offices and not any of teams. As far as I can find none of the teams were ever tax exempt. 

[KarenK 383]

1 hour ago, Ann said:

Are the owners of the Bills paying anything for this new stadium?  I still believe that $850M taxpayer dollars could be better spent elsewhere.

[Adam 373]

21 hours ago, Kevin said:

That is for the NFL corporate offices and not any of teams. As far as I can find none of the teams were ever tax exempt. 

correct, corporate is/was tax exempt, the teams pay "dues" to them though....still remains that an entity making 10billion annually, paying only 10 million in taxes, should in no way need or justify public funds to further their financial comfort

[MsKreed 1,176]

The Pegulas are worth about $6 billion ( nearly DOUBLE what they had when they bought the Bills), they are in the top 5 or 10 richest people in upstate NY.

For them to accept handouts from taxpayers of NYS and Erie County to foot 60% of the cost for a facility they're making that much money off of...just seems unfair to the people in Buffalo (the third poorest city in the entire nation).

Edited March 29, 2022 by MsKreed

[Chris 2,158]

Well hey, when the Governor is from there, whaddya expect?

[TTL News 308]

 

I’ve studied stadium financing for over two decades – and the new Bills stadium is one of the worst deals for taxpayers I’ve ever seen

Buffalo Bills owners Kim and Terry Pegula received a sweetheart deal from the state to finance their new stadium. Brett Carlsen/Getty Images

Victor Matheson, College of the Holy Cross

After New York lawmakers blew past the deadline to approve the state budget, they finally came to an agreement on April 9, 2022, that included a US$850 million subsidy for a new stadium in Buffalo for the NFL’s Bills.

As a sports economist who has studied stadium deals for over two decades, I am not exaggerating when I write that the New York Legislature has managed to craft one of the worst stadium deals in recent memory – a remarkable feat considering the high bar set by other misguided state and local governments across the country.

Study after study has shown that stadiums are terrible public investments. The taxpayers financing them rarely want to pay for them. So why are governments willing to subsidize them?

A return to the bad old days

There were many things to dislike about the Bills stadium project. At $850 million, it is the largest taxpayer handout for a new stadium in U.S. history even before additional subsidies such as annual maintenance costs, property tax exemptions and tax exemptions for municipal bond interest are considered. These factors could easily drive the total government price tag well over $1 billion.

With taxpayers footing over 60% of the $1.4 billion price tag, it also runs counter to the trend of the past decade toward lower levels of public funding for stadium construction.

State and local governments on average had covered roughly two-thirds of stadium construction costs during the first wave of the modern stadium boom that began in 1991. During the Great Recession, however, government leaders found it politically unpalatable to hand over hundreds of millions of dollars to billionaire owners as they were laying off teachers and firefighters.

Over the past decade, my ongoing research has shown that public subsidies have fallen to only one-third of building costs, on average. In fact, the most recent Super Bowl was played in the entirely privately financed SoFi Stadium in Los Angeles.

The Bills deal evokes the bad old days.

Stadium subsidies in general are terrible public policy, and this arrangement is no exception.

The Bills and their owners, Terry and Kim Pegula, don’t need a handout. With a net worth of $5.8 billion, Terry Pegula ranks as the ninth-richest owner in the NFL. The generous revenue-sharing structure of the NFL means that even playing in one of the league’s smallest markets, the Bills have earned over $300 million in operating income since the Pegulas purchased the team for $1.4 billion just seven years ago. And since then, the value of the Bills has risen by another $900 million. The Pegulas have earned enough on their investment in just seven years to pay for the entirety of a new stadium on their own.

But the only thing better for a team owner than a new stadium is a new stadium that someone else pays for. Indeed, the new stadium is likely to further drive up the value of the Bills far more than the $350 million the Pegulas are contributing to the stadium’s construction costs.

Stadiums make poor neighbors

These taxpayer-funded deals are often pitched as an investment in the local economy, but two decades of academic research on the topic have conclusively shown that stadiums and franchises have little or no impact on local economies. The Bills are not likely to be an exception.

For one, most of the customers at a sports venue are residents of the metro area who would simply spend money elsewhere in the local economy in the absence of the team. Second, stadiums often make poor neighbors. NFL venues, like the Bills’ current home, Highmark Stadium, are huge facilities that are rarely used: The Bills play eight home games each year in the regular season. This creates little incentive for investing in the surrounding neighborhoods.

The Buffalo Bills’ current home, Highmark Stadium, sits perched upon an island of concrete. Claus Andersen/Getty Images

And don’t think that NFL stadiums typically host a multitude of other events. Over its 50 years of existence, aside from a pair of annual high school football games and a few miscellaneous competitions, Highmark Stadium has hosted a grand total of 30 major concerts, three college football games and two large hockey games. And Buffalo’s venue is not out of the ordinary for any large, outdoor stadium.

Rather than creating a dense area of housing, retail establishments and restaurants, Highmark Stadium instead sits alone as an island of concrete in a sea of parking lots.

The threat of relocation

The stadium project is deeply unpopular, with one survey finding that 55% of New Yorkers are opposed to the plan, versus only 22% in favor of it.

So why did it get included in the state budget?

For one, stadiums are a perfect example of the classic special-interest problem. For a handful of passionate fans in Buffalo, a new stadium may determine which candidate gets their vote. But for the rest of the state, a small increase in their tax burden is unwelcome but not problematic enough to compel a voter to switch sides.

Teams have also gotten smart about minimizing transparency, which is bad for public policy but good for team owners. The Bills stadium proposal was added to the state budget and dropped on unsuspecting taxpayers just days before a final vote was scheduled in the Legislature. With such a short timeline, it was impossible for lawmakers to fully analyze the issue, and there was little time for public interest groups to mobilize against the handouts.

The Pegulas were essentially able to extort New York taxpayers by threatening to relocate the team if they didn’t pay up. Buffalo is only the 49th-largest metro area in the U.S. At least half a dozen cities across the U.S. without NFL franchises are both richer and at least twice as populous, including San Diego, St. Louis, Portland and Austin, not to mention the possibility of a franchise in London.

With their current lease expiring in 2023, the team had already indicated that the 2022 season could have been its last in Buffalo.

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This threat was a slap in the face of loyal Bills fans who have supported the team for over 60 years through subzero temperatures, lake-effect snow, four straight Super Bowl losses in the 1990s and more losing seasons than winning ones.

The NFL has long kept the number of teams lower than the number of cities that could profitably support a franchise. So as long as owners are willing to use the threat of relocation, I don’t believe any city’s fans – and any state’s taxpayers – are safe.

Victor Matheson, Professor of Economics and Accounting, College of the Holy Cross

This article is republished from The Conversation under a Creative Commons license. Read the original article.