Subsidy Sheet: Buffalo Sabres’ Oligarch Owners Extend Lease Until Public Subsidies Ripen

Terry and Kim Pegula, the owners of the NHL Buffalo Sabres, have announced that they’re extending their lease at Erie County’s KeyBank Center into 2031. No demands for publicly supported upgrades, no threats to leave town — welcome news for New York taxpayers, right?

Unfortunately, the fine print says probably not. As the Buffalo News reports, there have been “initial conversations” about a longer lease extension that would include “much-needed renovations at the almost 30-year-old downtown arena,” but those “aren’t expected to heat up until construction on the Buffalo Bills’ new stadium is complete.”

The Pegulas, in other words, are taking up so much government time and energy — and cash — with the stadium Gov. Hochul arranged for their football team that they need to wait until the time is more ripe to ask for a similar deal for their hockey team. The deadline for extending their lease by five years was this week, so they’ve effectively kicked the can down the road to the end of this decade, when the public purse strings may be loosened again.

How much the Pegulas will ask for is unclear — WGRZ-TV reported earlier this year that they could seek to do renovations at the KeyBank Center costing between $75 million and $200 million, but what share of that would be covered by the city or state remains unknown. (Erie County is presumably out, as county executive Mark Poloncarz, who gifted the Pegulas $250 million toward their Bills stadium, has said the county wants out of the arena business entirely.) In the meantime, the Sabres will have to suffer through playing in a relatively new arena (“almost 30-year-old” is another way of saying “opened in 1996, with $55 million in city, county, and state money”) and paying no ground rent to the county. (The Pegulas are also not paying property taxes since the arena site is owned by the Erie Canal Harbor Development Corporation, a NY State Authority.) Three decades used to seem state-of-the-art for a sports venue, but that was before team owners successfully shortened their effective lifespans by demanding new ones as soon as the bonds were paid off. As sports economist Rod Fort once said when asked how long an arena has before becoming obsolete, “I don’t see anything wrong, from an owner’s perspective, with the idea of a new stadium every year.”

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More NY corporate giveaway news from this week:

• Good Jobs First has issued a new list of best practices for states regarding data centers, including: disqualify them from property, sales, and other tax exemptions; limit other incentive programs like discounted electricity and ban non-disclosure agreements (right with you there); and require audits of the impact on electricity rates, water usage, job creation, air quality, and fiscal rate of return. “These profitable companies, led by some of the world’s richest men, don’t need public financial support,” says the D.C.-based subsidy watchdog. “This over subsidization can be harmful to state and local budgets, especially considering the harms data centers brings to communities, including water overuse, air and noise pollution, and an increase in ratepayer bills.”
• The New York Power Authority is still looking to raise electric rates for everyday customers by just under 3% a year for the next five years; if you’re looking to expand a theater or museum or make more cottage cheese, though, that’s “economic development,” so your rates go down.

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