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Bills’ new stadium deal is $850m for taxpayers, government says

BUFFALO, NY – The proposed $1.4 billion new home for the Buffalo Bills comes with a record $850 million price tag for taxpayers in a deal reached Monday to secure the franchise’s future for the next 30+ years.

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

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

New York will commit $600 million in funds in a deal struck 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 to the project, while ultimately relinquishing control to a newly created state commission.

The NFL and the Bills have agreed to commit $550 million in funding, with team owners Terry and Kim Pegula contributing $350 million for a facility that is expected to open in time for the 2026 season. The bills would be responsible for covering any construction overruns under the proposed deal.

The 60.7% taxpayer commitment is lower than the 73% share the state and county previously committed to bills to build, maintain and upgrade the team‘s existing facilities, 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 so proud to broker such a great deal for the state and our many, many fans,” Hochul said during the interview. a conference call, which she closed. saying “Go Bills”.

The proposed 60,000-plus outdoor facility to be built on county-owned land across from the Bills’ current home still faces several hurdles needed to approve funding.

The entire agreement is not complete. The parties have yet to negotiate the terms of a 30-year lease that would include a no-move clause, with Bills facing a penalty if they fail to comply with the agreement. The taxpayer’s commitment also does not include the annual operating grants the state will incur for game day and other expenses.

Although the Bills draw fans from all over western New York and southern Ontario, they play in one of the smallest markets in the NFL. Buffalo also lacks a major corporate base from which to generate sponsorship dollars compared to other franchises.

Anticipating a pushback for committing taxpayers’ money to a private entity, Hochul noted that the state’s commitment will be repaid within 22 years from player salaries in tourist tax dollars, which directly generates $27 million. dollars in annual revenue for the state. Unlike the New York Giants and Jets, which play in New Jersey, the Bills are the only New York-based NFL franchise.

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

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

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

Democratic Representative Tom Suozzi, who is running against Hochul for governor, criticized the deal, saying it imposes higher taxes on residents.

“I support a new Bills Stadium, and there was a way to get it built without the Governor forcing hard-working New Yorkers to shell out their taxes to help a billionaire donor get even richer,” Suozzi said in the post. a statement.

Forbes estimates that the team’s owning family, the Pegulas, have a net worth of over $5 billion. They made a fortune in the natural gas and fracking industry when they sold their Marcellus Shale natural gas drilling rights for $4.7 billion to Royal Dutch Shell in 2010. They bought the bills for a record NFL of $1.4 billion in 2014 following the death of the team. founder and owner of the Ralph Wilson Hall of Fame.

The Pegulas, who also own the NHL’s Buffalo Sabers, have invested in the city by helping to spur downtown redevelopment, including financing the construction of the $200 million Harborcenter hotel and rink complex, which opened its doors. doors in 2013.

The deal came when the Bills’ stadium proposal was approved at NFL owners’ meetings in Florida. The owners also approved giving the Bills what’s called a $200 million G4 loan to cover construction costs, which the Pegulas were expected to at least match.

“It’s a good investment for everyone,” said Ron Raccuia, director of Pegula Sports and Entertainment, which led the bills’ negotiations. “We are very grateful that the governor and the county executive have shown leadership. But I think people need to realize that we are contributing a lot from a tax perspective. Every dollar that comes into this stage will be refunded. “

The Bills are expected to recoup some of their costs by forcing season ticket holders – for the first time – to pay a one-time seat license fee, potentially doubling the price of their package.

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

The Buffalo News previously reported that the largest commitment of taxpayer funds for an NFL stadium involved the Las Vegas Raiders, with $750 million in public funds earmarked for the construction of 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. Public commitment for the Cincinnati Bengals’ Paul Brown Stadium, which opened in 2000, has covered $425 million of the $450 million. building costs.

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

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Associated Press writer Mike Hill and Michelle Price contributed.

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