Nevada’s $750 million contribution to the NFL Raiders home ground will cost it more than New York’s $1 billion gift to the Buffalo Bills, if the current proposals are accepted.
Budget talks in New York continue, but it seems likely that elected officials will commit state taxpayers to more than $1 billion for a new NFL stadium in Buffalo: $600 million from the state from New York and $250 million from Erie County to build the new arena in Orchard. Park. An additional $280 million in future maintenance costs will also be covered by the public. That initial $1.13 billion award is the second-largest grant ever offered for the stadium from taxpayers, second only to $1.186 billion in taxpayer support for the new Yankee Stadium, which opened in 2009.
The exact sources of money for the stadium have yet to be found by New York, but officials have suggested using “found money” as a way to make the deal more palatable to taxpayers. The Erie County Commissioner said at a news conference last week that the county will use last year’s $75 million budget surplus toward its $250 million commitment. New York Governor Kathy Hochul said $418 million in casino revenue sharing, which is the subject of a longstanding dispute with the Seneca Nation, will cover most of the State. New York seized the money from Seneca last week, in a legal dispute over how much the state owed from the tribe’s slot machine revenue.
How $1 billion could cost less than $750 million, the commonly quoted figure for what Nevada taxpayers gave for Allegiant Stadium, is a question of funding. By using existing funds totaling $493 million, New York would avoid directly issuing hundreds of millions of dollars in bonds to finance the construction of Bills Stadium.
In the case of the Raiders, the vast majority of its taxpayer subsidy was funded by bonds. Clark County sold $645 million in municipal bonds for Allegiant in 2018. Assuming the bonds are paid through their term in 2048, Clark County will pay an additional $709 million in interest in addition to $645 million, bringing total public funding to $1.35 billion, according to information in the stadium’s bond offering document.
New York, however, has shown in the past that it is more than willing to commit even more of its taxpayers’ money than Nevada. The city used its ability to issue municipal bonds to fund even more expensive stadiums for baseball’s Yankees and Mets, each of which opened new ballparks in 2009.
New York originally issued two sets of tax-exempt bonds for Yankee Stadium: an original $925 million bond and a $259 million follow-on issue to cover additional costs related to design changes and challenges judicial. New York refinanced the bonds at a lower interest rate in 2020. Even at that lower rate, the stadium will still cost New Yorkers $1.85 billion by 2050, according to financial details in the bonds’ prospectus. refund. The Mets’ Citi Field will cost taxpayers $1.19 billion, including principal and net interest payments, according to debt service details in bonds issued for the Queens ballpark.
Still, distinguishing total costs between Buffalo and other stadium projects may miss the point, according to Michael T. Leeds, a sports business economist at Temple University.
“It seems to me that these people have no idea what an opportunity cost is,” Leeds said in a phone call. “They say, ‘It’s found money, it’s free money, it won’t cost anyone anything.’ Well, that’s assuming there’s absolutely nothing better to do with the money, like it would just be sitting under a mattress otherwise.
Another example of an economically false narrative is arguments that local taxpayers don’t really pay the bonds because they’re mostly funded by “tourist taxes” on rental cars and hotel rooms. Each tax for a sports facility means there is less fiscal capacity to fund infrastructure, schools and other projects, according to Leeds.
“The best thing they can seem to do is build a stadium that will stand empty 350 days a year,” Leeds said. “The return on investment is equal to that of a medium-sized department store. You don’t see people spending a billion dollars to build a department store.