The agreement calls for $850 million in New York State and local funding, the largest taxpayer contribution ever for a National Football League facility.
March 28, 2022
Sign up for the Pro Football Digest. Our analysis of the biggest games, story lines and athletes in the N.F.L. postseason, delivered three times a week.
ALBANY, N.Y. — New York State officials have reached a deal with the Buffalo Bills to use $850 million in public funds to help the team build a $1.4 billion stadium — the largest taxpayer contribution ever for a pro football facility.
Under the deal, the state would finance $600 million of the construction costs, while Erie County, where the stadium will be built adjacent to its current home, would cover $250 million. The remainder would be financed through a $200 million loan from the N.F.L. that was approved on Monday, plus $350 million from the team’s owners.
The public dollars, which still need to be approved by lawmakers, would cover about 60 percent of the projected construction costs, a percentage that is slightly lower than in recent stadium deals in similarly small markets in the N.F.L. But the overall subsidy is the largest amount earmarked for an N.F.L. stadium since Clark County in Nevada issued $750 million in bonds to help pay for the construction of a new arena before the Raiders moved to Las Vegas in 2020.
The announcement came after months of secretive back-room negotiations among Gov. Kathy Hochul, county officials and the team owners, who indicated last year that they would not renew the lease of the current arena, Highmark Stadium, which is nearly 50 years old — one of the oldest professional football stadiums in the country.
The team pursued public funding for a new stadium instead, with state officials agreeing that building a new arena made more financial sense than undertaking renovations that could have been almost as expensive.
Striking a deal to ensure that the Bills remained in western New York was a top priority for Ms. Hochul, a Buffalo native and avid Bills fan who took office in August and is running for a full term as governor this year.
In a statement on Monday, Ms. Hochul said officials had secured a 30-year commitment from the team to play in the new stadium, which she said would create 10,000 union construction jobs. The state would own the stadium and lease it to the Bills.
“I went into these negotiations trying to answer three questions,” Ms. Hochul said. “How long can we keep the Bills in Buffalo, how can we make sure this project benefits the hard-working men and women of western New York and how can we get the best deal for taxpayers?”
Julie Wood, a spokeswoman for the governor, said that the state portion would be funded through “a mix of new and existing capital appropriations” that Ms. Hochul would ask lawmakers for in this year’s budget.
Ms. Hochul, a Democrat, unveiled the agreement just four days before the state budget is due in Albany, giving lawmakers a relatively small window to scrutinize the details of the state portion of the financing that they must ultimately decide whether to approve.
The subsidy is bound to make the already fraught state budget negotiations even more contentious, with some left-wing Democrats from the downstate region already denouncing the public funding as corporate welfare.
Indeed, the negotiations over a new stadium rekindled a bitter debate about whether government should be in the business of subsidizing arenas for professional sports teams; economic research has found that sports stadiums have rarely had a substantial impact, if any impact at all, on overall economic growth. The team insisted that the new stadium would eventually pay for itself.
“Every dollar that goes into the stadium will be paid back,” said Ron Raccuia, the executive vice president of Pegula Sports and Entertainment, which owns the team.
Experts were quick to cast doubts on that assertion, with some arguing that new stadiums could yield consequential benefits only if they were tied to an area’s larger revitalization efforts.
“To say you’re going to spend $850 million to get economic impacts, you’re playing on people’s emotions and not dealing with reality,” said Mark Rosentraub, a professor of sport management at the University of Michigan. “In the end, it’s nothing more than a subsidy to the N.F.L.”
Public assistance, in the form of tax breaks and free land, has been used to finance the construction of arenas for New York sports teams, but many of the teams, from the Yankees to the Mets, have financed most of the costs themselves. The Giants and the Jets, who play in New Jersey, paid for nearly all of their stadium, which opened in 2010.
The negotiations also sparked skepticism about whether the Bills would have ultimately abandoned New York without a large government subsidy, though the owners never publicly threatened to uproot the team.
Pegula Sports and Entertainment is owned by Terry and Kim Pegula, a wealthy couple based in western New York; Mr. Pegula, who made his fortune through fracking, has a net worth of $5.8 billion, according to Forbes.
The new open-air stadium, which would be built across the street from the Bills’ current home in Orchard Park, a Buffalo suburb, would hold just over 60,000 fans, about 10,000 fewer than the current venue. But it would have a larger footprint overall and include about 60 box suites, a more lucrative source of revenue for teams.
A partial roof would cover about 80 percent of all seats, an attempt to protect fans from the region’s frigid wind and snowfalls during winter games. The new stadium could open as early as 2026 if construction begins within a year, according to team officials.
The N.F.L. approved the $200 million loan for the construction during its annual meeting in Florida on Monday morning, shortly before Ms. Hochul’s announcement.
Local legislators in Erie County must also approve the county’s part of the financing, which will be raised partly through bonds, according to Mark Poloncarz, the county executive, who added that the Bills would be on the hook for any cost overruns.
State Senator Sean Ryan, a Democrat from Buffalo who represents the district where the new stadium will be constructed, said he was satisfied with the final deal.
“Subsidies for sport stadiums are a bitter pill,” he said. “Nobody is happy about doing this, but this is the best deal we could expect under the circumstances.”
Ken Belson contributed reporting from Palm Beach, Fla.