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Bills deal far shorter than in other cities

By Darryl McPherson

Bad Negotiating? When Kansas City negotiated with the Chiefs, they got a 25 year commitment. WNY got only 6 years from the Bills.

What is perhaps so disturbing about the recently announced benefit package to the Buffalo Bills organization is that it generates more heat than light.

The deal purports to include $54 million in contributions from New York State for Ralph Wilson Stadium improvements, $41 million from Erie County and a $35 million contribution from the Bills. A 10-year lease will provide $800,000 a year from the team as rent, which is more than offset by $2.5 million a year in debt service payments by taxpayers and other maintenance and operating expenses.

The part that really burns is the false perception that this is a really good deal for Bills fans and the local area. We are to be assured that the Bills will be here for at least six years, due to a $400 million buy-out penalty. However, in year 7, the penalty drops to $28 million, which for a franchise valued at almost $900 million that is the cost of doing business (or the price to leave Bills fans behind).

We at the Reporter asked ourselves, does this seem fair? Attaching so much hope for such a short-term gain seemed troubling, especially with a 10-year lease being so cheaply escaped before the term is up.

These remarks are prefaced with the statement that we do not endorse generally corporate welfare, public assistance for private entities or tax breaks for large commercial enterprises. If a company is strong enough to survive and stand on its own two feet, enter the marketplace and prove your worth among the competition. That’s the spirit that built America.

That being said, there has been a disturbing trend over the last few years to provide governmental assistance to major league sports teams, particularly in connection to building stadiums and guaranteeing against team relocation. A probe by the Reporter found that, for the most part, the amounts being provided are considerably larger that the Bills deal, but they also go further to provide the security and comfort most people want to see out of these transactions.

Take the Kansas City Chiefs, for example. They renovated Arrowhead Stadium in 2010 for $375 million. The team’s owners provided $125 million, while the taxpayers coughed up $250 million. But the difference is that there was a stipulation that the team stay in the city until 2031. That’s a 25-year guarantee.

The Minnesota Vikings raised money from the state, $348 million, contributed their own $477 million, plus $150 million from a hospitality tax. The 30-year lease runs from 2012 to 2042 and keeps the team there for that period. The stadium is also very available for public use.

The publicly-owned Green Bay Packers privately funded a stadium expansion to the tune of $143 million. A major renovation in 2003 cost $295 million, but that was funded by a sales tax increase, user fees for ticket holders, a loan from the NFL and a stock sale. That also came with a 30-year lease until 2033.

It is quite apparent that when it comes to negotiating a lease agreement with a professional sports team, longevity for the host community should be a primary motivating factor. The rub (or the rip) associated with the Bills lease is the short-term as compared to the public investment. If the Bills are so uncertain of their future in this area, why not let them foot the bill?

Mayor Michael Bloomberg of New York City acted to dismantle a deal made by former Mayor Rudy Giuliani. Bloomberg’s position was against public subsidies for stadium construction. After watching New York City and New York State jerk the Yankees and the Mets for a public financing scheme, the Jets and the Giants privately financed their own deal, borrowing $650 million dollars each.

This would be the preferred route for the Bills to follow. That would be the enlightened path, and would not burn an unnecessary hole in Western New York’s pocket.



Niagara Falls Reporter www.niagarafallsreporter.com

Jan 08 , 2013