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Can Buffalo afford a new stadium for Bills?

When Gov. Andrew M. Cuomo last week appointed the first five members of a new panel to address building a football stadium in Buffalo, he started a conversation about how best to keep the Bills here.

One overriding question rises to the top of that discussion: Is a new stadium financially feasible in Buffalo?

There are two answers. And one other option.

The first answer is it’s doable, but very challenging. A new football stadium would require a strong, shared commitment from state and local taxpayers, private business, the team’s fan base and the Bills.

That’s the emerging consensus from consultants, economics professors, business people, fan representatives and government officials quizzed on the topic last week.

But there’s also a contrary view, that any talk of a new stadium here is a waste of time. Some experts say the National Football League, team owners and the next owner of the Buffalo Bills know they probably can make much more money by moving the team out of Buffalo.

And then there’s the other option.

The most realistic solution to keeping the Bills in Buffalo, some say, could be a major renovation or rebuild of Ralph Wilson Stadium, probably costing half of the $800 million or more needed to build a new stadium.

The Cuomo committee will be looking at a spanking new stadium, clearly a costly venture for taxpayers and fans.

“Stepping up is going to be expensive, and it’s not going to be easy,” said Marc Ganis, a Chicago-based sports consultant familiar with the NFL’s business side. “And the fans have to be willing to step up as well.

“That all having been said, it’s doable,” added Ganis, president of SportsCorp Ltd. “It’s been done before. But it takes virtually all the people in the community rowing in the same direction.”

Andrew Zimbalist, an economics professor at Smith College in western Massachusetts, has a different take.

“I don’t think that it’s viable,” he said. “I think the Buffalo Bills are going to be worth a lot more if a new owner can move them to Toronto or another venue,” he said. “Andrew Cuomo’s committee to study the viability of a new stadium seems to be beside the point and apparently a waste of resources and revenue.”

Matt Sabuda, president of the Buffalo Fan Alliance, disagrees with Zimbalist.

“I think a new stadium is very feasible, depending on the location and the ability to generate revenue on nongame days,” he said, referring to projects like the new HarborCenter in downtown Buffalo.

Sabuda and others believe a new Bills stadium could benefit from a more accessible location for fans from southern Ontario and the Rochester area.

“That would make a new stadium not only feasible, but more attractive to the NFL in building those fan bases over the long term,” he added.

Think Niagara Falls. Several people interviewed for this story mentioned Cuomo’s appointment of Niagara Falls Mayor Paul Dyster to the new committee. A Niagara Falls stadium would be a potential magnet for Ontario fans, while presenting no more difficult drives for fans from Buffalo, its Northtowns and Rochester.

Everyone has different numbers, but most agree that a new stadium, even without all the bells and whistles of Jerry Jones’ football palace in Dallas, likely would cost anywhere from $800 million to more than $1 billion.

That kind of a price tag presents obstacles.

Size of public subsidy

If the stadium were built in Erie County, New York State and the county would be asked to pay anywhere from one third to more than half the total amount, experts say. The Buffalo Fan Alliance, a group of young business professionals trying to keep the team in Buffalo, has compiled figures of the 18 newest NFL stadiums showing that the public funded an average of 55 percent of the total costs.

“Based on the previous two decades of major stadium construction, the public should expect to contribute more than 50 percent of the necessary funding to build a new stadium or renovate Ralph Wilson Stadium,” Sabuda said. “Creative financing could certainly help alleviate some of this burden.”

There are huge questions about whether this community can stomach such a large public investment.

Erie County Executive Mark C. Poloncarz said he has been surprised by the public’s apparent unwillingness to pay higher taxes in order to keep the Bills here.

“Almost everyone I talk to [says], ‘I want the Bills to stay here, but I’m not willing to basically bankrupt the community to do it,’ ” said Poloncarz, who will get to appoint seven members to Cuomo’s New Stadium Working Group.

The county, which owns Ralph Wilson Stadium, committed $40.7 million for renovations already underway. Poloncarz said he has not considered the level of funding the county could commit toward a new stadium or a retrofit of the existing stadium, which he said is still very much on the table.

“If we’re going to build a new stadium, it certainly cannot be 100 percent subsidized by ... the state and county government,” the county executive said of a $1 billion stadium. “We just don’t have assets to do that.”

Even paying 10 percent of a new stadium would be “a huge, heavy lift” for the county, he said.

“Don’t get me wrong, I certainly want to see the team stay in Buffalo and Erie County,” Poloncarz added, noting that though he’s a Bills fan, as county executive he has to weigh taxpayers’ and the community’s well being, too.

“Do I sacrifice Child Protective Service workers to pay the Buffalo Bills?" he asked. “The answer to that question is no.”

Resistance to subsidies

Taxpayers increasingly are resisting the thought of subsidizing multimillionaire owners who make even more money from their NFL franchises.

But it will be difficult to build a new stadium here without a huge public subsidy. In the NFL, the smaller the market, the larger the public subsidy. That’s the rule of thumb cited by Ganis, the Chicago-based consultant who’s studied other NFL stadium deals.

And Buffalo clearly is a smaller market.

Ganis cited the types of public funding projects that have helped build new stadiums or fund major stadium renovations in New Orleans, Kansas City, Green Bay and Cincinnati. They include annual direct public subsidies, referendum-approved tax increases and huge bond issues.

Do the elected officials here have the stomach to make such a tough decision?

“They have to be smart,” Ganis said of those elected officials. “They have to be gutsy. They have to think long-term. They can’t just do it for short-term political gain. It’s a challenge, and it’s going to be a tough sell.”

Many people believe that the benefit of keeping the Bills in Buffalo goes beyond dollars and cents, that the Bills leaving town would open a huge psychological wound.

“They’ve got to look at it as a part of a mosaic that makes a vibrant community in Western New York,” Ganis said. “It’s quality of life, not economic return. That’s a decision the community and its leadership have to make.”

The compromise

Opinion is all over the lot on whether a major rebuild/renovation or facelift would work for Ralph Wilson Stadium. The stadium turns 50 at the end of the current lease in 2023.

Some think it’s just too old.

“The building does not have the structural foundation to compete with the new stadiums in the NFL,” said Ganis, the sports consultant. “If you’re going to spend the money, $400 or $500 million, spend a little more money to build a stadium that will last 30 or 40 more years.”

Sabuda, from the Buffalo Fan Alliance, doesn’t agree. He cited major renovation projects like the recent $375 million for Kansas City’s Arrowhead Stadium.

“Everyone loves the idea of a shiny new stadium,” Sabuda said. “But keeping the option open for renovating Ralph Wilson Stadium, along the lines of what they did in Kansas City, might prove the best of both worlds.”

Whatever its choice, this community now has at least a few years to study the issue.

The current new 10-year lease on Ralph Wilson Stadium virtually guarantees the team will be here through at least 2019, allowing the community enough time to explore the possibility of a new stadium.

“Ralph Wilson gave Buffalo a wonderful gift in this last lease,” Ganis said. “He could have easily asked for more and given less. He gave a great gift to Buffalo, the gift of time.”

Other funding sources

There are other options for helping fund a new stadium.

Up to $200 million could come from the NFL’s G4 revolving fund.

That fund allows the league, up to a certain point, to match the amount any team provides toward a new stadium or major renovation, provided there’s also strong public funding.

The G4 loans are repaid through revenue shared by all teams, paid back by the visiting team’s share of “club seat premium” receipts. That means that other teams would help subsidize major renovations or a new stadium here, just as the Bills have helped pay a small share of other teams’ projects.

Sabuda, from the Buffalo Fan Alliance, is helping spearhead another creative-financing option, the Bills Fans Fund. The group’s goal is to raise $100 million or more from fans, which would be loaned interest-fee to any new owner pledging to keep the Bills in Buffalo. That owner thus could save close to $10 million in interest payments per year.

Even with such creative financing, a huge chunk of any new-build or renovation project would have to come from the Bills, presumably from a new owner, because the current Bills administration has shown little interest in a new stadium.

“If the Bills came up with between 40 and 50 percent, then a stadium could be done,” said one expert who asked not to be identified.

Personal seat licenses

Some of that hefty amount, of course, would be subsidized by the fans, through much higher ticket prices and personal-seat licenses.

PSLs are one-time payments giving a fan the right to buy a season ticket – added on to the actual price of the season ticket.

Seventeen NFL teams have used personal seat licenses to help finance new stadiums. In Minnesota, for example, fans are being asked to pay between $500 and $9,500 per seat, with the average PSL there costing an average of $2,500 per seat.

While such PSLs have become almost the norm across the NFL, Poloncarz took a dim view of their chances in Buffalo.

“People here are not used to that,” he said. “They don’t anticipate that they’re going to have to spend a couple thousand dollars before they even put down a dollar for the price of a ticket.”

Minnesota originally encountered similar opposition from the public about paying such fees.

“Maybe they can afford it in Minneapolis-St. Paul,” the county executive said. “I don’t know if the Buffalo market is willing to do that.”

Other reactions

Cuomo administration officials were mum about any details of the state’s intended involvement in a potential new stadium for the Bills.

“These are all areas that will be examined by the Stadium Working Group,” said Richard Azzopardi, a Cuomo spokesman. “We look forward to reviewing their recommendations.”

Since taking office, Cuomo regularly turns to committees to come up with recommendations on potentially controversial issues.

Some panels operate somewhat in the open and conduct public hearings, while others do their work behind the scenes, allowing the governor to avoid taking a precise stand on the issue as he defers to the panel’s ongoing work.

In most cases, Cuomo publicly sets the broad parameters for the committees; in the case of the Bills, he already has made clear he hopes for a new stadium at some point.

Buffalo Mayor Byron W. Brown, another of the first five members of the committee, said he will advocate for a city location for any new stadium. Is the city in a position to subsidize part of a new stadium?

Brown made no commitments, citing the governor’s “tremendous interest” in keeping the Bills here.

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