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CITY MAY BE OUT OF ITS LEAGUE IN EXPANSION COSTS LEASE TALKS THROW NEW CURVE IN BISONS' BID FOR MAJORS

Economic realities that have arisen during current lease negotiations for the future use of Pilot Field are prompting the Buffalo Bisons and city officials to question whether Buffalo can sustain a major league baseball team.

Because of the $95 million price tag that major league baseball has placed on new franchises, an expansion team may not be a viable business proposition in Buffalo unless local government provides financial guarantees, team officials say.

City and county officials counter that they can't afford to provide those guarantees.

"As long as the $95 million price tag stays in effect, I think there's a real question as to whether the project is economically viable for this community," said William Gisel Jr., the Bisons vice president and legal counsel.

City officials, however, say they are not after baseball at any price.

"There is a line we cannot and will not cross under any circumstance, and that is resorting to use of general tax revenues," said Charles F. Rosenow, a top development official in City Hall who is representing the Griffin administration in negotiations with the Bisons on a lease for Pilot Field in the event Buffalo is awarded a National League expansion team in 1993.

Despite the hard positions, Gisel did offer some optimism.

"This is another obstacle that has been put in our way," he said. "We have had obstacles in our path the last eight years, and somehow we have found ways around them. We expect this one will be no different."

City officials say their position is based on the financial difficulties that city and county governments are facing, which have strapped general tax revenues used to pay for basic services such as police protection and snow removal.

"The Bisons have already said it's not baseball at any cost from their side, that it's got to make good business sense for them," Rosenow said. "What we're communicating to them is that it's got to make good business sense to the city and county, too. It's not going to be a matter of baseball at any cost and at any terms."

Both sides, in effect, are saying that at this point they can't find a way of meeting the needs of the other without losing the shirt off their back. And unless something gives, Buffalo's hopes of getting an expansion team are likely to die, at least in the short run.

"What we have tried to do with the city and county is to sit down and put everything on the table and figure out what sort of resources we have as a group to bring a franchise to Buffalo," Gisel said. "And right now the numbers just don't add up."

Others also are worried.

"We are much further apart than I thought we would be," said North Common Council Member David Rutecki, a member of the lease negotiating committee.

The two sides are engaging in amicable lease negotiations, and both point to the $95 million team fee as a major problem. The fee, which was set over the summer by major league owners, is substantially higher than anticipated. As a result, Gisel said, the team is looking to the city and county for more of a contribution than if the price tag been lower.

The city and county have agreed to pay for stadium expansion in the event a major league team is obtained. All but $5.5 million of the estimated $40 million in work would be financed with proceeds from the county tax on hotel rooms that is shared with the city.

Team and city and county negotiators have agreed to some aspects of the lease. Tentative agreements call for the Bisons to:

Pay the city an annual rent of $700,000. That money would be used to pay $5.5 million in bonds that would be sold to expand the stadium. The Bisons would pay additional rent if attendance surpassed 2 million. By contrast, the team now pays about $1.3 million in rent annually.

Take responsibility from the city for operating and maintaining the stadium, at an initial annual cost to the team of at least $3.2 million.

Keep all revenue from sale of tickets, souvenirs, food and beverages, stadium advertising and luxury box suites. The city now gets a percentage of all those sales except the luxury boxes.

Control any other events staged in the stadium. The city would retain the right to stage 30 amateur athletic events each year at no charge.

Publicly, city officials are calling the terms favorable to the Bisons. Privately, some are calling it a sweetheart deal. But most city officials say that teams playing in newer stadiums elsewhere are demanding and getting such leases.

Rosenow said the city and county are willing to agree to generous terms, especially in light of the unexpectedly large investment the team owners would have to make in obtaining a team. The governments refuse to budge on tapping general tax money.

But Rosenow and Ellicott Council Member James Pitts, another member of the lease committee and chairman of the Council's Auditorium and Stadium Task Force, said further demands by the Bisons would require that the city and county use tax money.

Those demands include annual city payments to the Bisons of $1.5 million for parking revenue, annual commitments of $650,000 from the city and county for capital improvements at the stadium and a waiver of the rent in the first year of the contract and any year when the team does not receive revenue from baseball's television contract.

"If we were simply to agree (to the Bisons' terms), we don't see how we we could do anything but cross the line that we said we wouldn't cross," Rosenow said. "We've arrived at a point where the economics of obtaining a franchise may require concessions which go beyond the basics of a good lease."

Pitts agreed.

"What it comes down to," Pitts said, "is they're asking the city and county to ensure their business success.

"We thought that by building Pilot Field and making it expandable, and by providing a suitable and fair lease, we would be doing enough to assist in bringing major league baseball to Buffalo," he said. "Everyone I've talked to in City Hall has said, 'We've done our part, and to go beyond that would be a grave mistake.'"

Rosenow said one of three things must happen to resolve the problem:

The city and county would have to agree to subsidize the Bisons with general tax money, which is raised primarily through property and sales taxes. Rosenow said both Griffin and County Executive Gorski have told him they would not support such a move.

Baseball drops its $95 million price tag or offers favorable terms of payment. Gisel doesn't expect that to happen.

"We don't have any indication from them that they will be flexible," he said of the major league baseball owners. "If anything, we feel they will be more demanding in their terms because they are facing some very financially demanding times ahead as well."

Bisons owner Robert E. Rich Jr. would have to reduce his demands for revenue from the stadium and related activities such as parking. One possibility would involve Rich and his partners investing more money to sustain losses and assume a greater share of the risk.

Gisel didn't dismiss that possibility, but said Rich has promised his partners that he will not go back to them seeking additional money once they have make their initial investment.

Seeking additional investment up front is a possibility, but Gisel said, "This has got to be an operation that's cost effective from day one."

"Everybody wants to try and work things out," Pitts said. "But if it's not possible to do that within the next several weeks, I think it will be very difficult to have major league baseball in the City of Buffalo."

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