ALBANY – Assembly Democrats want the Cuomo administration to put into state law financial penalties against the Buffalo Bills if the team breaks the terms of a new lease deal and leaves Western New York in the first seven years of the contract.
The “clawback” provision would seek to recoup the entire cost of renovating Ralph Wilson Stadium as part of the agreement that Gov. Andrew M. Cuomo made with the team in December.
“We want to make sure the Buffalo Bills remain a permanent fixture in Western New York,” said Assembly Speaker Sheldon Silver, D-Manhattan.
This Assembly proposal is not part of the Senate package of budget bills and therefore must be negotiated with leaders of that chamber. The Cuomo administration would not comment on the Assembly proposal.
The clawback provision sought by Democrats says New York would “not be liable for incurred expenses if the beneficiary of these funds relocates its operations to another facility.”
And if the Bills violate the memorandum of understanding and the nonrelocation agreement, the franchise must “refund the full amount” of state money the team received for the stadium renovation as well as operating expenses in the coming years, the Assembly Democrats propose.
The deal signed by the team, the state and Erie County calls for $130 million to be spent renovating the football stadium. The Bills will pay $35 million, the state $54 million and the county $41 million.
Under the current memorandum of understanding, if the team leaves before the end of the 10-year agreement, the Bills must pay a $400 million penalty to the state. But the agreement has a one-time, less-costly escape clause: The team would have to pay only $29 million if it moves to another city after the seventh year.
The plan Silver is pushing would not change the terms of the memorandum of understanding, including the less-costly seventh-year escape clause.
But his proposal would require that the team repay any money the state spent if the team leaves before the seventh year of the contract. A Silver spokesman said the budget this year includes a one-time line item for $53.9 million in capital spending for the stadium, as well as two other pots – totaling $6 million – that Albany is scheduled to pay each year of the lease deal.
Officials said the proposal would do two things: put the force of state law behind the $400 million penalty language negotiated by Cuomo and require the team to also pay back the state’s out-of-pocket expenses during the period in addition to the $400 million penalty.
Assembly Democrats believe the deal needs to be made more ironclad by putting into law the terms of the memorandum of understanding, which they fear the Bills might be able to challenge on legal grounds if new owners take over the team and seek to move to another city.
In a written statement, the Bills said that the terms of the deal negotiated with Cuomo and Erie County “include the gold standard for fully protecting the public’s investment in Ralph Wilson Stadium. The three parties have agreed in principle to signing a binding contract that not only allows the Public Entities to get a court injunction preventing the Bills from moving before their lease term ends (specific performance), but further provides that if a court for any reason doesn’t issue such an injunction, the Bills must pay the Public Entities $400 million (liquidated damages). That sum is more than double the present value of the investments to be made by the Public Entities under the proposed lease. The team agreed in writing to both of these protections months ago. The reason for the proposed legislation is thus a complete mystery to us.”
The final approval in the 2013 appropriations budget, which included the money for the Bills deal, did not sit well with one downstate lawmaker this week.
Assemblyman Steve Katz, a Putnam County Republican, railed against what he said was a questionable financial return for the state by providing nearly $60 million in this year’s state budget “to billionaires who can more than afford to stay right here.”
“Aren’t they wealthy enough that they can handle their own operating support?” Katz asked Assembly Ways and Means Committee Chairman Herman Farrell.
“I don’t see that this is the financial boon to the City of Buffalo,” Katz said, suggesting the state should be wary of sports franchises that threaten to leave if they don’t get public funding.
“The New York Giants said that one day, and now they are the New Jersey Giants,” Farrell, a Manhattan Democrat, told Katz. He noted New York City’s loss of teams like the New York Jets and Brooklyn Dodgers and added that the New York Yankees stayed, in part, because of public financial support for a new stadium.
“I don’t want to get beat up because they left Buffalo,” Farrell said. “Buffalo has got a lot of hard times. I don’t think it would be a smart thing to let that team leave because it would really do damage to that city and the mentality of that city.”