The price tag for the Buffalo Bills’ new stadium is going way up.
The Bills confirmed on Friday that the cost for the Orchard Park stadium being constructed across the street from the current facility has jumped to an estimated $2.1 billion.
Nearly two years after a community benefits agreement tied to the building of a new Buffalo Bills stadium was signed, the public will get a chance to chime in how the team should be investing the money.
That’s about a 25% increase in the most recent estimated $1.7 billion stadium cost – a number the Bills never confirmed – and an approximately 50% increase from the original estimated cost for the stadium of $1.35 billion.
Most of the cost overruns are a product of market conditions – increasing prices for materials, like structural steel, and for workforce, according to the team.
And this may not be the last time that the stadium cost increases, with only about 35% of the project done and construction slated to continue through June 2026.
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The price increase confirms what has been speculated about for the last year or so – that the cost of the new stadium could reach $2 billion.
The Bills received $850 million in public money from New York State and Erie County, but all cost overruns are the responsibility of the team and owner Terry Pegula.
The soaring price of the stadium means the Pegulas are bearing a much bigger share of the project’s cost. With the original $1.35 billion cost estimate, the public funding would have accounted for about 63% of the stadium cost. Now, with the price rising to $2.1 billion, the public funding covers about 40%.
“Additional project spending has come at absolutely no expense to New York taxpayers. The state’s investment remains capped at $600 million,” Empire State Development said in a statement. “It now represents less than 29% of the anticipated total cost of the new stadium, a figure that is substantially below other recent NFL stadium projects.”
The difference is significant for Pegula. His share of the project has now gone up from around $500 million to approximately $1.25 billion, which makes the sale of personal seat licenses and potentially a minority share of the team even more important for the billionaire owner.
“Regardless of those cost overruns, they won’t impact our vision for that building,” said Pete Guelli, the Bills’ executive vice president and chief operating officer.
“We understand our obligations to fund the overages, and I would say that all this does is continue to illustrate Terry Pegula’s and his family’s commitment to building a world class facility in Buffalo,” said Pete Guelli, the team’s executive vice president and chief operating officer.
“We’re not compromising on the fan experience, just like we’re not compromising on what it takes to put a winning product on the field,” he said. “Regardless of those cost overruns, they won’t impact our vision for that building.”
Pegula has no plans to scale back on any part of the project as a result of the cost overruns, Guelli said. If anything, he continues to add to it, when needed.
In fact, the first cost overrun when the projected stadium price went up to $1.54 billion shortly before the Bills came to terms on the construction and lease agreements for the new stadium in March 2023 was due mostly to changes in the project scope to meet the vision of ownership.
The original cost projection came from an initial analysis the team conducted in 2020.
Guelli said the team’s public partners for the public-private project have been aware of the price overruns, but the team waited until now to announce it because they wanted to feel comfortable that it was an accurate number.
“Economics of sports has changed dramatically and from the beginning, we needed a stadium that would allow us to compete,” Guelli said. “And we’re not deviating from that.”
John Polka, vice president of stadium development, said the team has known where the price was trending for almost a year, and used that time to go through an analysis of the procurement process to determine a new stadium cost.
A view from the 300-level northwest-side seating at the site of the new Bills Stadium as seen in October.
As the three-year project approaches its midway point, steel continues to go up as well as mechanical, electrical and plumbing work happening on the field level and multiple other levels, concrete being laid, precast stairs and stadia being installed and underground utility work continuing.
“As we were getting numbers through the various bid packages, we were seeing that they were consistently higher than every estimate we had and at some point. We could have hit pause and went back to look at X, Y or Z for cost savings, but the Pegulas’ vision for this stadium has been unwavering,” he said.
The costs associated with building anything, coupled with inflation and the expense of bringing in a workforce in a competitive landscape for contractors and workers, has resulted in the dramatic increase in the stadium’s price, Polka said. However, prices have stabilized over the past few months, he said.
The team has bid out nearly all the stadium work, through four rounds of bid packages, and has been challenged by having to compete for workforce against some of the other projects going on in the area.
“It’s great for our economy, but when you look at cost competition, it means everyone has a lot of options and they’ve got to be really diligent about where they are going to put their resources and staff,” Polka said.
So how will Pegula come up with the additional hundreds of millions of dollars he’s now on the hook for with the stadium overruns?
Continuing to sell personal seat licenses to season ticket holders at the new stadium will certainly help. PSLs will be required for every season ticket holder planning to buy tickets at the 60,000-plus seat new stadium.
The Bills could raise at least $300 million to $400 million on PSLs. They’re working on sales of PSLs with Legends, which raised around $550 million at the Las Vegas Raiders’ $1.9 billion Allegiant Stadium, completed in 2020.
Eight months into beginning the process of selling seats at the new stadium, the team has sold out its available inventory of club seats, which come with the most expensive PSL price tag.
Although some fans balked at paying PSL prices between $8,000 to $50,000 for these premium seats, the team was able to sell them throughout the process at about a 60% rate to current season ticket holders and then finished off the remainder of the stock selling to fans who have chosen to upgrade and new season ticket members looking for club seats at the new stadium.
The team this month began PSL sales for general admission with lower-level seats. Fans have said on social media the price point to start for a PSL in the 100 level is $6,000.
“We’re comfortable with how those are moving so far,” Guelli said. “It’s going well. I encourage people to take their time and know what exactly they’re getting. It’s a completely different experience than the current building, but it’s still built for Buffalo and there will be a price point for everybody.”
The Bills are still adding fans to their waiting list, and Guelli said he hopes there will be opportunities for them. There are more than 5,000 accounts, potentially representing 15,000 seats, on the waiting list.
Many fans also have reported that, in addition to the PSL expense, ticket prices have gone up between about 30% to 100% for comparable seats in the new stadium.
The team has already received about $200 million from the National Football League through the NFL’s G-4 loan program, with most of the loan being paid back through the visiting team’s share of certain ticket revenue.
The NFL has moved on to create a G-5 loan program, but whether the Bills can tap into that money source is unknown. Guelli said “there are (other NFL) vehicles that teams can benefit from,” but did not elaborate further on the team’s eligibility for them.
Construction crews work at the site of the new Buffalo Bills stadium last month. The man in charge of the team’s operations says that despite the heavy increase in cost, the new facility is “the kind of big picture project that puts a city like Buffalo on the map.”
Arctos Partners, which is already approved by the NFL as a potential team investor, is reportedly in talks with the Bills about purchasing a minority stake in the team.
Earlier this year, Pegula retained Florida-based investment firm Allen & Co. to explore the potential sale of a noncontrolling interest in the Bills. Allen & Co., which offers wealth management services, advised the Pegulas in their initial purchase of the team.
Pegula bought the Bills for $1.4 billion in 2014, and the team is now valued at over $5 billion by sports business site Sportico. He is looking to sell a minority ownership stake of around 25% in the Bills, which could pull in around $1 billion and maybe even more.
NFL team owners provisionally approved in August new rules that will allow private equity firms to buy passive minority stakes in franchises, opening up the pool of potential minority investors to a new group of deep-pocketed investors. One of the four private-equity groups permitted to participate, Arctos Partners, has reportedly expressed interest in the Bills.
As for the stadium construction, the Bills and general contractor Gilbane Turner are in midst of putting in steel, including the canopy structure on the stadium’s top level, and precast materials, most of which will make up the exoskeleton of the building. That will continue until the spring, and then next year, the skin of the building will be built and that will include the precast architectural panels, perforated metal panels and glass, Polka said.
Guelli said they are getting closer to a final number on the stadium cost, but they may not be there just yet.
“These are the kind of big picture projects that put a city like Buffalo on the map,” Guelli said.
