BUFFALO, N.Y. — A day after Gov. Kathy Hochul announced the state would contribute $600 million and Erie County another $250 million toward building a projected $1.4 billion stadium, state Senate Finance Committee Chair Liz Krueger and Assemblymember Ron Kim hosted a Zoom briefing, firmly against the deal.
"I'm sorry, this is a terrible way, a terrible way to use the taxpayers' money,” Krueger said. “And fine, we can all fight about the good or bad of it if we actually know what the hell is going on. But we don't. And so I'm just frustrated beyond belief today.”
Kim said 40 years of data shows subsidizing stadiums is a bad idea.
"It's one giant scam in economics," he said.
The Democratic state lawmakers brought on a panel of economists and experts to discuss why they believe subsidized sports facilities return little to no economic benefit to the states and communities where they are built.
Among the key points, they say revenues are essentially redistributed from other businesses and other areas of the community. The owners and players see the biggest economic benefit even though the vast majority of them do not live in the local community year-round and spend much of the money elsewhere. And a stadium gets very little use outside of the handful of games the team plays there throughout the year.
"It's just a huge scheme to redistribute income from relatively poor taxpayers, non-sports fans, into the pockets of relatively wealthy team owners and players," University of Maryland sports economist Dennis Coates said.
Monday, Pegula Sports and Entertainment Executive Vice President Ron Raccuia attempted to get ahead of such criticism, making a similar point as the governor and Erie County executive did in their announcements: That just on player income tax the stadium nearly pays for itself.
"Every dollar of the government subsidy is going to be paid back to the state and the county with what we contribute from a tax standpoint and it will be paid back more than the contribution is,” Raccuia said. “This is a good investment for everyone.”
But the lawmakers and economists question some of the finer points of the deal, suggesting after principal and interest on bonds, other unknown costs like cheap or free transfer of land and tax breaks, the public cost could actually be much more than $850 million.
"Even if you take that at face value, if anyone here has bought a house or anything you need to pay off over time, you'll know you can't pay back a billion dollars in debt with $27 million a year in payments,” Neil Demause, who authored a book on the topic, said. “It doesn't work for principal interest and payments and that's how state bonds work.”
Kreuger said even though she opposes the deal and wants much more information, she expects it will be approved in the state Senate because of the way she expects it will be presented in the budget. She said she has heard from some of her Western New York colleagues who are in favor of the deal.
State Senator Sean Ryan, D-Buffalo, who currently has the stadium in his district is among those who said it "has to pass in the budget."
"I'm confident my colleagues will come on board," he said Monday. "We've done large projects funded by various public subsidies in New York City."
Kim said there is no consensus in the Assembly and there is an opportunity to vote the bill down. However, Majority Leader Crystal Peoples-Stokes said she is working to get it across the finish line as well.
"I also serve with a ton of colleagues who can support it and certainly a ton of colleagues who probably won't support it,” she said. “But I will spend some time trying to work on helping them understand why they should support it. That's my job."
Erie County expects to get a memorandum of understanding in the next few days which it has already committed to review for at least 30 days.
However, county leaders on both sides of the aisle indicated the details outlined so far look good, including a projected 10,000 union construction jobs, no more annual commitment to operation and capital costs, and a vow from the county executive not to raise taxes.
The deal does not appear to have as much resistance from the Erie County Legislature where chair April Baskins said she like that the county would no longer pay operational fees for the stadium and she will help negotiate a Community Benefits Agreement.
"I'm very excited about the deal that has been presented."
Minority Leader Joe Lorigo has been critical of lawmakers being left out of negotiations but this week was happy with the details that at least have been announced.
"Without seeing the actual deal without seeing the actual numbers, I can't commit to supporting it,” he said. “But if what he says is true and there's no tax increase, I think it's a fair deal for Erie County taxpayers. And it's actually better than what I expected the county executive to be able to put forward.”
The county Legislature passed a resolution to review the memorandum of understanding for at least 30 days before taking a vote.