A record grant for the Bills stadium?


The billion taxpayer dollars would be the largest public investment ever made in an NFL stadium. Team-generated taxes can cover about half of the bill.

There has never been a stadium built for a National Football League team that costs taxpayers the $ 1 billion for a new home for the Buffalo Bills.

A single stadium, built to attract Raiders from Oakland to Las Vegas, even approaches it, at $ 750 million. Three other stadiums built over the past decade involved taxpayer grants of between $ 114 million and $ 498 million.

Another stadium, built in Los Angeles for the Rams and Chargers, was built entirely with $ 5 billion in private funds.

How bills and local and state governments allocate the cost of a new stadium is the subject of negotiations. The team, however, had made it clear that they were looking for a major investment from taxpayers to build a stadium that would cost at least $ 1.4 billion.

A billion-dollar grant would eclipse what governments have spent on other NFL stadiums, said Pat Garofalo, director of national and local policy for the American Economic Freedoms Project.

“It would be the biggest stadium grant in American history,” he told Investigative Post.

NFL stadiums built over the past decade

Team stadium built for Cost Public money
Las Vegas Adventurers $ 2 billion $ 750 million
Minnesota Vikings $ 1.1 billion $ 498 million
Atlanta Falcons $ 1.5 billion $ 214 million
San Francisco 49ers $ 1.3 billion $ 114 million
LA Rams, Chargers $ 5 billion $ 0
Source: search for the investigation station.

A to study prepared for the state estimates that the Buffalo Bills generate nearly $ 27 million in tax revenue per year. This is money that could possibly be invested in a new stadium.

This begs the question: what is $ 27 million buying?

Tax revenues could be used to cover the public’s share of stadium costs, or at least offset the cost of borrowing. Twenty-seven million dollars could buy about $ 500 million in municipal bonds, a common way to finance public projects.

“We know, based on the Pegulas’ own estimates, that a new stadium is going to cost around $ 1.4 billion, but we don’t know how much money they expect from taxpayers, we don’t know how much money. New York the state is going to set up and it’s problematic, ”said Joseph Lorigo, Minority Leader of the Erie County Legislature.

Offers on stadiums in other cities

Investigative Post reviewed the financial deals of the five NFL stadiums built over the past decade.

Here are the details:

  • The San Francisco 49ers moved about an hour south of Santa Clara in 2014. The stadium cost $ 1.3 billion; the city contributed $ 114 million, using economic development funds and increasing the occupancy tax on hotels near the stadium. The deal also gave the team tax breaks on some stadium-generated revenue estimated at $ 106 million and $ 213 million over 20 years.
  • A new stadium for the Minnesota Vikings opened in 2016 in downtown Minneapolis. The state and city injected $ 498 million for the $ 1.1 billion stadium. The state raised its share of the funds through digital gaming, with the city raising the tax on hotel rooms.
  • The Atlanta Falcons began playing at a $ 1.5 billion stadium in 2017. The public share of the project was $ 214 million, generated by an increase in the hotel room tax.
  • The Raiders started playing in Las Vegas in 2020. The stadium cost $ 2 billion; the public share of the funding amounted to 750 million dollars, financed by an increase in the hotel tax. (Because the pandemic drastically reduced hotel revenues, the county was forced to dip into the reserve funds to cover stadium debt service payments.)
  • A stadium also opened last year in Inglewood, in the Los Angeles area. The $ 5 billion project was funded by Rams owner Stan Kroenke with help from the league. The stadium is part of a larger complex that includes shops, hotels and offices.

There has been no public discussion in Buffalo as to how the state or county would generate the revenue necessary to pay for its share of the costs of a new Bills stadium. While hotel taxes have been a preferred means of financing stadiums in other markets, western New York is not as strong a tourist destination as most of them.

The team does, however, generate tax revenue that could either be used to help finance the public portion of the stadium’s costs, or at least offset some of the expenses.

Taxes generated by the team

The state released a study earlier this month on stadium options and costs. Consulting firm AECOM found that the bills generate nearly $ 27 million in tax revenue per year for the state, Erie County and the city of Buffalo.

The bulk of the money $ 19.5 million is in the form of income taxes paid by players, coaches and other team personnel. Most of the rest, $ 5.1 million, is collected in sales taxes on everything from tickets and concessions to team merchandise.

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Timothy Noonan, a lawyer with Hodgson Russ who specializes in tax management, said most Bills players and coaches pay income tax in New York even though their primary place of residence is in another state.

Under state tax law, Noonan said that anyone Player and staff invoices included is considered a resident if he spends 183 days or more per year working in New York. With off-season training, preseason and regular-season games, Noonan said most players and coaches meet or exceed this threshold.

Noonan said people earning less than $ 2 million a year pay an income tax rate of 6.85%. The rate climbs to 10.9% for individuals like Bills quarterback Josh Allen who earn more than $ 25 million.

“Whether they establish their residence or not, whether they move here, to the extent that they are paid to provide services in New York State, they owe income tax in New York,” he said. declared Noonan.

Players, coaches and visiting staff also pay a small percentage of income tax when playing at Highmark Stadium in Orchard Park. The tax paid for so-called “days of service” is based on the percentage of time they spend in New York City, which is typically a few days a week when their team is playing the Bills.

“When Tom Brady comes in here to play the Bills and he’s here for a few days, he owes New York state income tax,” Noonan said.

Noonan noted that players, coaches and staff who work for the home team contribute to the economy in other ways when they buy taxable goods like houses and cars.

“It is certain that an influx of high income taxpayers will benefit the local economy,” he said.

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It is not clear whether income or sales taxes could be used to sell municipal bonds under this circumstance. But tax revenues provide net income to state and local governments.

Tax revenues are currently being reduced by the expenses the county absorbs for the operation of the current Orchard Park stadium. Incoming County Controller Kevin hardwick dowels cost $ 10 million a year.

Other potential sources of income include concessions, parking, and naming rights. But the county has no claim under the current stadium lease which took effect in 2013.

Lawmakers speak out

County legislators have pressed Poloncarz for details on stadium negotiations, but neither the county executive nor state officials wanted to discuss the details or give lawmakers a seat at the negotiating table.

“The county executive is talking about getting a deal done by the end of the year, which means they’re further along in negotiations than I think anyone thinks, and the legislature still hasn’t been brought to the table, ”said Lorigo, a curator who represents West Seneca.

Hardwick, D-Tonawanda, said reaching a deal by the end of this year sounds ambitious. It’s more likely to be finalized in the first quarter of next year, he said.

Like Lorigo, Hardwick said he had not received any specific figures, but he expects the audience’s share for a new stadium to be around $ 1 billion. He said he doesn’t think the county will be responsible for the “lion’s share” and instead expects the state to cover most of any public contribution.

Hardwick said he expects the county’s share to be bonded over a period of several years, in the same way the county has repaid the $ 130 million spent to improve the existing stadium. The deal, Hardwick said, costs around $ 10 million a year, a figure he called “doable.”

“I mean we do it, we did it, people don’t seem to be complaining and people, especially with the winning Bills, love the product that has been in the field,” he said. he declares.

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While acknowledging that the cost of a new stadium to government funders will likely be over $ 10 million per year, Hardwick said he considers the impact of bills, including the nearly 27 million dollars in tax revenue identified in the state study, would at least partially offset the cost of a new stadium.

“Without the bills here, you wouldn’t see this money coming in,” Hardwick said. “Now, $ 27 million probably won’t cover the full cost of the stadium, but there are other economic benefits to having an NFL franchise here.”

Lorigo said he found the bill’s $ 27 million contribution “shocking.” He described it as a “drop in the bucket” amid talks about a billion dollar public investment.

“I think any new deal, whether for a new stadium or a new lease, should reflect the fact that it does not have enough economic impact and that it should pay more for the stadium,” a- he declared.

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