(The Hill) — Governors and legislators in several states are racing to throw hundreds of millions of dollars in tax breaks, rebates and straight up cash at some of the richest people in the nation, hoping to secure commitments from NFL franchises in search of massive new stadiums.
Three states are considering or offering incentive packages to keep teams that already play inside their borders, while officials in two neighboring states are putting together their own bids to steal away nearby teams. Together, the deals amount to some of the most expensive packages states have ever offered to private businesses.
On Thursday, New York Gov. Kathy Hochul (D) said she and legislative leaders had agreed on a $220 billion budget framework that would include $850 million in state and local taxpayer money to fund most of a new $1.4 billion stadium for her hometown team, the Buffalo Bills.
Virginia lawmakers are debating $350 million in bonds for a proposed economic development project that would be located either in Prince William or Loudoun counties to host the Washington Commanders, who currently play across the Potomac River in Landover, Md.
Maryland lawmakers have proposed $400 million in economic development along the Blue Line corridor near the Commanders’ current stadium, though none of that money would be used to fund the team’s wishes for a new home.
In the Kansas City metropolitan area, both Kansas and Missouri lawmakers are in the initial phases of outlining incentive packages to woo the Chiefs. The team has a lease for Arrowhead Stadium, on the Missouri side of the border, until 2031. But chief executive Clark Hunt said last week they have invested $500,000 in studying whether to renovate, build a new stadium in Missouri or move across the border to Kansas.
The owners of all three teams are regular fixtures on lists of America’s ultra-wealthy. Terry and Kim Pegula, who own the Bills and the Buffalo Sabres, are worth a combined $5.8 billion, according to Forbes. The Hunt family that owns the Chiefs counts a net worth of $15.5 billion. Dan Snyder, who recently purchased a $48 million estate that was once part of George Washington’s Mount Vernon, is worth a reported $4 billion.
Legislators who back the massive incentive packages aimed at billionaire owners say the investments pay off in economic activity and civic pride.
“The Buffalo Bills are a part of the fabric of our community in Western New York. Losing our team to another part of the country would be devastating to the psyche of our community and the fabric of who we are, not to mention the economy that has been on the rebound and has been building momentum,” said New York state Sen. Tim Kennedy (D), who represents Buffalo. He pointed to stadiums that host the Yankees, Mets and Knicks, all of which received taxpayer funding. “The last thing we need is for an NFL team to pull up shop.”
Economists tell a very different tale. Stadiums for any professional sports team lie dormant more often than they host games, and studies of economic impact unanimously show the stadiums do not deliver what the teams promise they will.
“Economists don’t always agree on everything, but this is one where we’re pretty well aligned,” said Paul Oyer, a senior fellow at the Stanford Institute for Economic Policy Research and author of the book An Economist Goes to the Game. “They don’t generally bring other benefits to the area like they always talk about. There tends to be a lot of promises and none of those benefits come other than to the stadium. It’s not like they’re producing a large set of full-time, high-quality jobs.”
The new stadium for the Bills is likely to play a role as Hochul seeks a full term in office this November. Hochul’s two main challengers, Reps. Lee Zeldin (R) and Tom Suozzi (D), were critical of the deal struck with taxpayer money.
“On behalf of New York taxpayers, Kathy Hochul should have taken a stronger negotiating position and driven a harder bargain to successfully keep the Bills in Buffalo without their loyal fans and the rest of the state’s taxpayers having to pay a $850 million public cost,” Zeldin said in a statement.
In Virginia, the push to woo the Commanders has used stadium deals in Atlanta and Phoenix as models. Legislators have proposed floating bonds to build an economic development area that would include a stadium and other facilities to attract visitors, like The Battery in Atlanta, an entertainment district that hosts the Braves.
The bills under consideration, sponsored by state Sen. Richard Saslaw (D), the majority leader, and Delegate Barry Knight (R), who heads the House Appropriations Committee, would allow the team to recapture some of the sales tax generated by a new stadium to help defray the estimated $1 billion construction cost, similar to a measure Arizona lawmakers approved to build a new stadium for the NFL’s Cardinals in Glendale.
Lawmakers in both Virginia and Maryland are acutely aware of Snyder’s own recent move from Maryland to Virginia. Some Maryland lawmakers say they are unwilling to commit to money for Snyder’s team, which dropped its racist name in 2020 and adopted the Commanders moniker earlier this year.
“Initially, they were a really good partner to the community. Then over the years they essentially went MIA,” said state Delegate Jazz Lewis (D), whose district includes the stadium, pointing to investments the late former owner Jack Kent Cooke made in a major sports complex in Prince George’s County. “Candidly, there are a number of folks who would be fine to see them go.”
Lewis said his $400 million proposal would build an entertainment district similar to the one under discussion in Virginia, though none of the money could be used to fund a stadium. Gov. Larry Hogan (R) said Thursday he backs the proposal, which would make investments in the area even if the team leaves.
“This is money that could entice them to stay because they know we are making investments around them,” Lewis said of the Commanders. He said that the General Assembly is also considering money to improve M&T Stadium, home of the Baltimore Ravens, and Camden Yards, home of the Orioles — two teams, he noted, that have not threatened to leave the state.
“If [the Commanders] leave, we can use the money to help level the stadium if that were to happen,” Lewis said. “I was very concerned that like RFK [Stadium in Washington] my constituents would have this towering structure that would depress home values for years to come.”
The fight over the Chiefs has reignited the so-called border war in the Kansas City metro area. For years, lawmakers on the Kansas side and the Missouri side offered millions in subsidies and tax breaks to businesses that would cross state lines, moving as little as a few blocks to shift jobs into one state or the other, at significant cost to taxpayers.
A truce established between the two cities three years ago is now at risk of unraveling. After Hunt’s comments last week, made at the annual meeting of NFL owners, Missouri Gov. Mike Parson (R) said his state would not let the Chiefs leave without a fight.
“After my conversation with [Chiefs President] Mark Donovan, I assured him that Missouri will compete with any state trying to move the Chiefs from Missouri,” Parson said in a statement. “My administration and I have a great working relationship with the Chiefs organization, and this will not change.”
The fights over NFL teams come at a time when state budgets are suddenly flush with cash, infused by federal government aid to handle the coronavirus pandemic and the associated economic downturn and recovery as well as unexpectedly strong tax receipts.
But those good times will not last forever, and economists warn stadium deals rarely, if ever, deliver their promised returns. Oyer said a state would be wise to spend excess cash to pay down pension debts and obligations, something that pays defined financial benefits in the longer run.
“Football stadiums are especially egregious because they’re used so few days a year,” Oyer said in an interview. “These stadiums cost billions of dollars, but the people who get the benefits from it are a) already billionaires and b) managing businesses that are already bringing in billions of dollars.”
In 2006, Jackson County voters approved major improvements to both Kauffman and Arrowhead stadiums, with a 3/8ths cent of a dollar sales tax that people pay for when they shop in the county. That money’s paying for the improvements already made to the stadiums until 2031.
An extension, or increase, of the current county sales tax would require voter approval, a spokesperson for the county said.