Stage set for Bills’ new venue construction

Article posted by Coliseum, January 30^th, 2023

Image: Buffalo Bills

The framework for the new stadium project deal of the National Football League (NFL) team Buffalo Bills (US), “including a 30-year lease and community benefits agreement”, was “unanimously approved” by the Erie County Stadium Corporation on January 23^rd – setting the stage for the new stadium to be built.

‘SPORTS BUSINESS JOURNAL’ stated that a public hearing will be held at 5pm ET on February 2^nd, and “if there are substantive negative comments” about the structure of the deal, the Board will “need to consider those before a final approval is given”.

But yesterday’s (January 23^rd) approval “authorizes the final paperwork to be signed”, and the Erie County Stadium Corporation will “likely need to meet again next month” after the public hearing to tie up any loose ends.

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‘SPORTS BUSINESS JOURNAL’ quoted the New York Governor Kathy Hochul as stating that the deal will also “ensure the team’s long-term presence in the region”.

The Buffalo Bills are a professional American football team based in the Buffalo metropolitan area. The Bills compete in the National Football League (NFL) as a member club of the league’s American Football Conference East division. The team plays its home games at the Highmark Stadium in Orchard Park, New York, US.

The 71,608-capacity Highmark Stadium is a stadium in Orchard Park, New York, US, in the Southtowns of the Buffalo metropolitan area. The stadium opened in 1973 as the Rich Stadium and is the home venue of the Buffalo Bills of the National Football League (NFL).

The 62,000-capacity planned venue of the Bills would cost $1.35 billion and will be built adjacent to the Erie Community College’s South campus across the street from the Highmark Stadium, which would be demolished. The stadium will be designed by the celebrated design studio Populous, who has previously designed 12 other active NFL stadiums, with which the new Orchard Park stadium will share numerous design elements and features.

A community benefits agreement (CBA) in the United States is a contract signed by the community groups and a real estate developer that requires the developer to provide specific amenities and/or mitigations to the local community or neighborhood.

Stadium Framework

‘THE BUFFALO NEWS’ stated that the Erie County Legislature and County Executive Mark Poloncarz must also provide their final approval for the deal after the public hearing. The National Football League (NFL) has already approved it.

Said Stephen Gawlik, Senior Counsel for Empire State Development, who oversees the Erie County Stadium Corporation as its subsidiary, “All of the substantive issues have been resolved. There’s just some lawyering left to do now.”

He added, “This is significant. It means that we’re close to signing the final agreements.”

The Empire State Development is the umbrella organization for New York’s two principal economic development public-benefit corporations, the New York State Urban Development Corporation and the New York Job Development Authority.

‘THE BUFFALO NEWS’ further stated that the above comes 10 months after the Bills, State and county came to an initial agreement in principle in March 2022 for a $1.4 billion open-air stadium to be built in Orchard Park, across the street on Abbott Road from the current Highmark Stadium.

Robert Duffy, the newly named Chair of the Erie County Stadium Corporation, who was involved in the last lease negotiations with the team in 2013, said this agreement has been “thoroughly negotiated”.

While the terms of the deal have been disclosed, the final lease documents will not be available to the public until after it is signed.

Observed Duffy, “It matters to have a Governor from Western New York. Everybody involved in the process should be applauded. Those who criticize this agreement today would probably be the first to criticize if the Bills left Buffalo. They can’t leave Buffalo. They’re such a fabric of our community.”

Added Hochul, “We’ve come a long way, there are just a few technical details that need to be worked out. But for anybody who questioned whether this would get done, it’s getting done. The Buffalo Bills will have a beautiful new stadium in just a couple of years.”

Stadium Slated to Open in 2026

Also approved was the Erie County Stadium Corporation’s purchase of the property from the Erie County for the project. The State entity will then lease it to the Bills after the county turns over the title.

Commented Hope Knight, head honcho of Empire State Development, “It goes without saying how important the Bills are to Western New York.”

The Erie County Legislature approved the environmental impact study recently, kicking off a 30-day window for the Empire State Development, the State’s economic development arm, to approve all elements of the final Bills deal. The original deadline for a deal to get done – September 1^st, 2022 – had been extended on a few occasions.

The Bills will put $550 million toward construction of the new stadium, much of which will be raised through the sale of personal seat licenses and with the help of the NFL’s G4 loan program, and pay for any construction cost overrun. The team will also pay $900,000 per year in rent, which will go toward a capital improvement fund.

The loan, known around the league as a G4 loan, gives NFL owners the ability to finance the private portion of stadium construction development up to $200 million.

The stadium will be built on 242 acres, much of which is now being used as parking, as well as parts of the ECC South Campus property. The stadium will be 1.35 million square feet with eight to nine levels and include between 60,000 and 63,000 seats with a standing room area and a party deck, with finishes, amenities and concourses “comparable to (recently built) NFL stadiums”.

Also to be built is a 65,000-square-foot auxiliary technology building to include areas for TV broadcasters and a production data center.

Construction is slated to begin this Spring and be completed before the 2026 NFL season. Fencing and running utilities around the construction site will likely get going in March and excavation is scheduled to start in June.

There are no families, businesses or individuals to be displaced by this project, according to the agreement.

Project Costs Due if Team Leaves in 15 Years

A separate non-relocation agreement will be part of this deal. It requires the Bills to pay back all project costs incurred by the State and county over the first 15 years of the lease if they breach the agreement and try to leave Buffalo. That cost would be about $1 billion, Gawlik said.

After that, the amount the team would need to pay back decreases annually for the remainder of the lease. However, if the team tries to break the lease, the State could file a lawsuit seeking an injunction to prevent the team from moving.

Put in Gawlik, “They don’t have a choice. They don’t get to say, ‘It’s year 28, so now we’re going to pay this penalty and leave’. It’s not how the relocation agreement works.”

Any new entity that might purchase the team during the lease – if owners Terry and Kim Pegula ever decide to sell the team – does not change the framework of the agreement, Gawlik said.

Public Money will go toward Repair and Maintenance

In addition to the $600 million from the State and $250 million from the county for the stadium construction, the State will provide another $280 million, and the county will provide an estimated $120 million over the life of the 30-year lease to repair and maintain the stadium.

The county’s commitment will be based solely on revenue generated from surcharges from ticketing, parking and concessions.

That’s broken down into a capital improvement fund and maintenance and repair fund, which will be funded annually for up to 15 years.

Those costs could increase with inflation, as measured by the Consumer Price Index, capped at 2.2 percent annually.

In year one of the lease, which is expected to be 2026, the total payments to the capital improvement fund would be $10.9 million, while the total funding to the repair and maintenance fund would be about $6.7 million.

For the capital improvement fund, the State would annually fund $6 million of it, the county would pay an estimated $4 million.

The Bills will be able to use up to one-third of the State money toward the capital improvements fund to pay for security and utilities for events at the new stadium.

The team will also be responsible for any money required that exceeds what’s provided in the capital improvement fund and maintenance and repair fund.

Expenses at Highmark Stadium to continue

The 10-year lease at the Highmark Stadium that was due to expire in July will be extended under the same terms on a year-to-year basis.

Until then, the county will continue to fund working capital, operating and gameday expense reimbursement and annual stadium capital improvement allowance. The county has been paying more than $16 million toward these funds annually and will continue to do so with inflation potentially make these payments even larger.

After the sides were hung up for months in negotiations, April Baskin, Chairperson for the Erie County Legislature, said they are “finally at a place where the bones of the CBA are essentially done”.

But some nuances of that deal have not been released yet, due to the nondisclosure agreement signed by both sides, she said. Baskin called it a historic CBA and said the Bills have gone above and beyond the philanthropic efforts they already engage in.

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