Last year, New York lawmakers gave the Buffalo Bills $850 million dollars in taxpayer money to help the NFL team build a new stadium. One well-known economist, Victor Matheson, wrote that “the New York Legislature has managed to craft one of the worst stadium deals in recent memory”. That $850 million dollar figure does NOT include a significant number of subsidies such as “maintenance costs and property tax exemptions”. Therefore, the stadium bill will likely end up costing residents at minimum $1 billion. If not even higher? Since the deal was agreed upon last year, the price of it has already gone up 10%.
Still, when one considers that the Bills owners, Terry and Kim Pegula, have a net worth of at least $5.8 billion, they do need our financial help. The Pegula’s should not be forced to put in the same amount of money as the county or state for future capital improvements of their new stadium. Doesn’t every business in New York get their business’s future upgrades subsidized by local governments?
It has been explained a number of times, but I will say it again, stadiums can be terrible neighbors. It is a gigantic facility that is used at least 8 times a year, and it has significant power over those near it. What is the incentive to invest in surrounding areas of a new stadium? Then yesterday, the Buffalo News wrote an article that discussed comments from a Bills executive about his confidence on whether there would be economic developments around where the new football stadium will be built.
According to him, the new stadium will do all sorts of things:
- The new stadium will “spur development around it”.
- The new stadium will be a massive “contributor to increasing tourism in the Buffalo region”.
- Not only is the new stadium causing interest “by developers throughout the country”, but these same developers “are used to developing around large-scale facilities”.
Will the new stadium cause the same amount of massive interest as the other one did? Surely not, since the current stadium brought “little trickle-down development” other than a few “one-floor hotels in close vicinity”. As the Business Journal wrote several weeks ago: “Officials … hope the Bills new stadium will spark the wave of development that the previous venue never did”. They just have no plan whatsoever to make sure that this new stadium does things differently than the old/current one.
The master agreement between the city, state and Bills to build a new stadium for the Bills makes ZERO REFERENCES to ancillary development. Maybe the Bills have ideas about commercial development around the new stadium? No. They have none and admit it. Consequently, why would anyone expect the new stadium to do anything different development-wise? Simply listing the ways that people describe the area around the current stadium will likely be the same way they talk about the area around the new stadium in just over a decade.
“Aside from the handful of game days each year, (Bills) Stadium is in a pretty sleepy neighborhood … a cluster of single-family homes are nestled next to the (stadium). There’s no hotel. No shops. No bustling retail complexes like the ones outside other NFL venues. Little has changed in terms of economic development since the Orchard Park stadium opened in 1973.”
It isn’t the Bills fault, though. The Bills executive reminded us how slow developers are in this region of the country when “(acting) on these types of opportunities”. What idiots. Don’t they know a good deal when it sits right in front of them?
Even though there is little information for developers to work with, but let’s see if we can go over the exciting details about lands near this new stadium.
- There must plenty of land available for purchase and rent? No. Eric Community College (ECC) owns and operates most land around the new stadium, and there is “little obvious space for further development”.
- The city must be helping developers with any questions or issues that they have? No. Developers have “many unanswered questions” that need to be addressed, all the while “few answers have been forthcoming”.
- Thankfully, are the zoning laws developer-friendly and help spur growth? No. The codes are so strict that current developments are “hampered”.
I also expect tourism to skyrocket with the introduction of Personal Seat Licenses (PSL) in the new stadium. Does it really matter that you will now be spending significantly more for tickets to Bills games? The Pegulas have been respectable enough to tell the public for years how much they understood the dislike that Bills fans had for a PSL system. Now they have sent out a survey to season ticket holders providing an initial price range for PSLs in various locations around the new stadium.
- The lowest price is $500 for reserve seating.
- The highest price is $16,500 for premium seating.
- The reserved section, lower level, has prices between $2,600 to $5,950.
- The reserved section, mezzanine, has prices between $1,750 to $7,300.
- The reserved section, upper level, has prices between $500 to $3,200.
Did we mention the 6% surcharge on all purchases at the new Bills stadium? What savings!
When a local TV station in Buffalo interviewed another economist about the infinite economic impact brought forth through a new stadium, he put forward a more polite way of saying the obvious:
“In economics, we would say that the economic impact is modest. That’s a polite way of saying it’s small.”