New York’s Billion-Dollar Stadium Boondoggle

New York’s Billion-Dollar Stadium Boondoggle

New York’s Billion-Dollar Stadium Boondoggle

Governor Kathy Hochul’s budget includes an enormous giveaway to the owners of the Buffalo Bills.


Budget season has finally ended in Albany, and under Governor Kathy Hochul the state has authorized $220 billion in spending, allocating generous funding to child care and public education. Still, the budget was mostly what a centrist governor—someone with Andrew Cuomo’s politics, if not his vitriol—would have largely wanted. Hochul forced through an expansion of the use of cash bail, infuriating progressive legislators, and refused to fund a new housing voucher program for the homeless and economic assistance for undocumented immigrants. Taxes were not raised on the wealthy.

Some activists and lawmakers have called it the worst budget in a decade. That is an exaggeration. But one slice of the budget, in addition to the criminal justice reform rollbacks, was particularly egregious. More than a billion dollars in public money will be committed to build a new stadium for the Buffalo Bills.

This was a pet project for Hochul, a Buffalo area native and ardent Bills fan. The agreement itself, struck with the billionaire Pegula family that owns the Bills, was negotiated in secret and announced shortly before the start of the new fiscal year on April 1. It was a cynical, Cuomoesque maneuver from Hochul, because she understood that getting the tax subsidy rubber-stamped would be far easier if she baked it into the state budget. She figured lawmakers would be forced to approve it because not enough of them would be willing to reject the entire budget. She was right.

In the end, the budget came a week late, as state legislators and Hochul battled over big policy items and debated whether they could approve the subsidy for the Pegulas, who had threatened to move the Bills out of Buffalo. Ultimately, there were plenty of Democrats in the Assembly and state Senate to vote for the budget, with only a handful of progressives and socialists shooting it down. Even Liz Krueger, a fierce opponent of the Bills deal and the state senator who chairs the finance committee, voted for the budget. So did Michael Gianaris, the deputy Senate leader and ally of Alexandria Ocasio-Cortez.

The Bills subsidy is the largest for a football stadium in American history. The top-line number floated in the press has been $850 million, but the cost to taxpayers will be larger. First, the state will spend $600 million to cover upfront construction costs. Erie County must kick in an additional $250 million. A further $100 million over 15 years will fund stadium maintenance and repairs. A county and the state authority created to oversee the stadium must pay $180 million over the 30-year lease for capital improvements.

The Pegulas have a net worth of at least $5.8 billion—some of which could easily be deployed on a new stadium. The NFL is the richest sports league in the world. Neither deserves any welfare paid for by the working taxpayers of New York State.

Hochul and the local lawmakers in Erie County believe the money is worth it because a new stadium will spur economic development—and the threat of the Bills leaving must be headed off at all costs. It is true that losing the Bills would be a devastating blow to Buffalo, New York’s second-largest city. Fans are deeply devoted to the team there.

But Hochul should have called the Pegulas’ bluff. With new NFL teams now sited in Los Angeles and Las Vegas, there are fewer viable destinations for franchises. The Pegulas had made noise about dragging the Bills to Austin, but the Dallas Cowboys were ready to short-circuit that idea. Threatening to relocate is a tired ploy of wealthy owners in search of government handouts. Rather than buckle under pressure, Hochul should have recognized the threat for what it was.

More importantly, a new stadium will not revive Buffalo, one of the nation’s poorest cities. Sports stadiums are not local economic development tools. On this point, economists on the left and right are in agreement. Fans spend most of their money inside the stadium, not outside it. The revenue a sports franchise creates is poured back into the team. Jobs are generated for construction and concession work, but not much else. Given the aggressive tax subsidy, it’s unlikely a new Bills stadium can ever generate enough economic activity for the region to pay taxpayers back what the Pegulas have devoured.

Meanwhile, the opportunity costs are large. Erie County could spend $250 million to remediate lead in impoverished neighborhoods in Buffalo or upgrade crumbling infrastructure. Buffalo public schools continue to struggle. The city is recovering from the depths of deindustrialization in the last century, but its comeback has been uneven. Like other Rust Belt cities, Buffalo is brutally unequal and segregated, with wealth flowing nowhere near its Black working-class.

Rather than address these problems head-on, Hochul will ensure that public funds will go instead to a football team that plays nine games a year in the city’s suburb, Orchard Park. The reality for working-class Buffalo won’t change at all. Politicians like Hochul don’t seem to care either way. It’s an election year, after all, and now she can claim she saved the Bills.

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