Agreement on bills revives debate over public funds for arenas

ALBANY, NY

New York appears poised to become the next place to give a huge grant to a professional sports arena, despite questions about whether the civic pride of having a team justifies giving so much public money to a private company.

Governor Kathy Hochul offered a deal Monday that would give the Buffalo Bills $850 million in public funds to help the team build a new $1.4 billion stadium. In return, the Bills would agree to play in suburban Buffalo for at least 30 years.

The deal, which has yet to be approved by the state legislature, immediately renewed a debate about the government’s role in supporting private businesses.

Just three years ago, a deal would have given Amazon nearly $3 billion in tax and other incentives to build a headquarters for 25,000 workers in New York.

Some similar criticisms echoed over the Bills deal.

State Assemblyman Ron T. Kim, a Democrat from Queens, used a curse word on Twitter to refer to the proposal. Sochie Nnaemeka, the leader of the influential Working Families Party, called the deal “a continuation of economic development programs that have enriched wealthy investors on the backs of black, brown and working-class communities.”

U.S. Representative Thomas Suozzi, a Long Island Democrat running against Hochul, said he supports the idea of ​​a new Bills stadium, but that it could be built without New Yorkers “paying their taxes.” to help a billionaire donor become even richer. ”

A few beards also came from the right.

“I love the Bills as much as anyone, but this is outrageous,” said Republican Sen. Mike Martucci, who represents a district in the Catskill Mountains and Hudson Valley. “Republicans are often criticized for being friends with billionaires. What would you call that? »

The Hochul administration-brokered deal would require the Bills’ owners, billionaires Terry and Kim Pegula, whose fortunes are tied to natural gas fracking, to fund about 39% of the construction cost.

New York State taxpayers would pay $600 million, with Erie County, where the team is located, spending another $250 million.

Hochul, a Western New York native and Bills fan, insisted the deal makes good economic sense.

She also pointed to the intangible benefits of having professional sports in Buffalo — a Rust Belt city the state once spent hundreds of millions of dollars reviving after American manufacturing declined in the 1970s. and 80.

It “goes to our identity,” she told reporters on Monday.

“We’re known around the world for being the home of the Buffalo Bills, and it’s part of our local psyche, and it makes us so proud,” Hochul said, adding, “it’s not quantifiable.”

It is, probably more than anything else, what has prompted many cities and states to invest a lot of money in sports arena projects, either to prevent teams from moving or to divert them from elsewhere. .

Nevada paid $750 million for a new stadium for the NFL Raiders to leave Oakland last year. In Atlanta, the Falcons owner said he expects to get up to $700 million in public dollars in future tax revenue over the next few decades as part of the deal struck to build Mercedes Stadium. -Benz of 1.5 billion dollars.

A number of cities and states have poured public funds into arena deals, even to replace still relatively new venues.

New England Patriots owner Robert Kraft bucked the trend of taxpayer support by privately funding his new stadium in Foxborough, Mass. – after exploring plans to move the team to Boston; Rhode Island; and Hartford, Connecticut.

A more comparable market to Buffalo is Jacksonville, Florida, where the Jaguars TIAA Bank Field was built on part of the former Gator Bowl Stadium in 1995 at a cost of $134 million (about $368 million in US dollars). today), with 45% of that money. coming from the city. Last year, Jaguars owner Shad Khan unveiled a $450 million plan to redevelop the area around the stadium, with taxpayers providing $233 million in investment and incentives.

The promise of sports-related economic development has also led many small towns and counties to invest public funds in minor league teams.

Public officials often claim that the amount of taxes spent will be dwarfed by the revenue a team generates, including taxes on player salaries, jobs created and tourism spending.

That argument doesn’t carry much weight with economists, who say decades of research show that sports stadiums do little to boost the local economy.

“It’s one of those things that almost all economists agree on: that stadiums really don’t bring significant financial benefits to the cities that host them,” said Michael Leeds, professor of economics. at Temple University.

Sports teams bring in out-of-town fans who frequent local hotels and restaurants, but the jobs created and tax revenue generated rarely come close to optimistic projections, experts say.

“We don’t want to kid ourselves,” Leeds said. “What they bring is very limited geographically and very limited financially.”

Buffalo, the NFL’s second-smallest market, draws fans from out of state, with southern Ontario, Canada, accounting for more than 15% of its subscription base.

Government donations to big business, of course, aren’t just for sports. Automakers, aerospace manufacturers, tech companies and others have secured billions of dollars in tax relief from US states. New York State has pledged more money to help build a Tesla solar panel factory outside Buffalo — $750 million — than it is giving the Bills.

Andrew Zimbalist, an economics professor at Smith College, said some wealthy sports team owners had in recent years shouldered a larger percentage of the upfront costs of new stadiums in response to public outcry over mega-love deals .

“If you go back 25 years, you’ll see that 70% of the funding was basically public,” Zimbalist said.

Leaders of the New York Assembly and Senate, whose approval is needed for public funding of the bills agreement, have so far remained silent, but Hochul appeared to have secured backing from at least some of the best Democrats.

Senate Majority Leader Crystal Peoples-Stokes hailed the deal and called it “a once-in-a-generation opportunity for advancement.”

Pegula Sports and Entertainment executive Ron Raccuia, who represented the Bills in negotiations with the state and county, called the deal “a good investment for everyone.”

“We are very grateful that the governor and county executive have shown leadership. But I think people have to realize that we contribute a lot from a tax point of view. Every dollar invested in this stadium will be repaid,” he said.

John Kaehny, executive director of government reform group Reinvent Albany, said if some downstate progressives objected to public funding of a Bills stadium as “one big corporate giveaway,” they might miss out. political force to block the agreement.

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AP sportswriter John Wawrow contributed to this report.