Bills Stadium cost nearly $300 million
ORCHARD PARK, NY (AP) — Three months into construction of their new stadium, the Buffalo Bills are already facing a potential cash squeeze as the team faces a cost overrun of up to $300 million for four people with direct knowledge, according to the latest projections or who have been briefed on the financial details, told The Associated Press this week.
What was originally valued at $1.4 billion in March 2022 and increased to $1.54 billion months later is now reported to have increased to $1.65 billion and increased to $1.7 billion approaching, the people told the AP on condition of anonymity because the team didn’t provide those numbers.
The rising price is notable given that the bills are contractually obligated to cover any overruns in excess of the then-agreed $1.4 billion cost, which is part of the tentative agreement the team reached with the state and Erie County 16 months ago has closed.
Higher labor and material costs were cited as the reason for the increased price, with one person saying that one line item was already $75 million over budget. Another person said that a delay in sending out offers also caused the cost to increase.
The Athletic first reported the cost overruns last weekend, citing unidentified people as saying the cost of the stadium could potentially reach $1.9 billion.
Bills’ newly appointed COO, John Roth, called the forecast premature and speculative at best.
“We don’t know enough to confirm that yet,” Roth told the AP on Wednesday, noting that only a small percentage of deals and deals have been finalized.
Roth took over three weeks ago after Ron Raccuia was suddenly fired.
Involved in stadium negotiations, Raccuia took on an even bigger role last year after team co-owner Kim Pegula suffered a massive heart attack in June 2022. Raccuia was fired last month, with co-owner Terry Pegula taking over as team president and naming a three-man committee led by Roth to oversee the bills and construction project.
A skyrocketing price would put a bigger than expected burden on the bills, which were originally required to pay $550 million in construction costs. Her share now potentially equals the $850 million tax contribution, with $650 million owed by the state and the rest of Erie County.
The bills agreed to absorb the cost overruns in exchange for full control over the design and construction of the stadium.
One of the people told the AP before negotiations began that overruns are expected given the bill’s projected cost of $1.4 billion. The Bills initially estimated the cost of the stadium at about $1.5 billion before switching design companies.
The Bills are funding their stake through the NFL’s G4 loan program. The rest of the money is raised through a first-time seat license fee for season ticket holders.
It’s unclear how the Bills would make up the difference and what cost-cutting measures they can take when designing a 60,000-plus-seat facility that will be built across from their current home in Orchard Park, New York.
The rising predictions come as the Pegulas, who also own the NHL’s Buffalo Sabers, are expected to be in town soon to discuss long-needed renovations to the team’s downtown arena.
The KeyBank Center has not undergone major modernization since it opened in 1996 and requires work on the roof, halls, and bench seating.
The need for renovation is so great that the project would have to be spread over several off-seasons.
Pegula has an estimated net worth of $6.7 billion and made his fortune through the natural gas industry, discovering and then selling drilling rights to portions of gas-rich fields around the country.
Pegula, for example, helped fund his $1.4 billion purchase of the Bills in 2014 by selling drilling rights to about 75,000 acres of land in Ohio and West Virginia for $1.75 billion.
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