Erie County’s recent call for outside counsel in stadium lease negotiations with the Buffalo Bills drew bids from 13 firms with ties to western New York, most of which offered experience in municipal law and public finance, construction and real estate, and a handful have handled professional sport stadium leases.
The firms also offered discounted rates, said Erie County Attorney Michael Siragusa. Lawyers involved in the bidding said in interviews they offered discounts from 10 percent to 25 percent.
The number of applications hints at the appeal of legal work for sports stadiums and the marketing advantages of a high-profile matter.
“From a western New York perspective, it’s a very preeminent piece of work to secure,” said Terrence Gilbride, a partner at 200-attorney Hodgson Russ, based in Buffalo.
Gilbride, who represented the county in the 1998 lease negotiations, added, “There’s a lot of work that goes into these engagements. It’s challenging and it involves a number of different disciplines,” including municipal, tax, real estate and franchise expertise.
Ultimately, Erie County announced on March 9 it chose Nixon Peabody—one of the largest firms that applied—which has handled transactions involving the new stadium for the New York Giants and New York Jets as well as deals with the New England Patriots, New York Yankees and New York Mets.
Other bidders were Bond Schoeneck & King; Damon Morey; Hodgson Russ; HoganWillig; Kavinoky Cook; Lippes Mathias Wexler Friedman; Pannone Lopes Devereaux & West; Phillips Lytle; Squire Sanders; Thompson Hine; Underberg & Kessler; and Winstead.
The NFL team is negotiating with local and state government officials for a new stadium lease. The current lease is set to expire in July 2013. Negotiations will cover possible state, county and team contributions toward the renovations at the Ralph Wilson Stadium in Buffalo, the length of the new lease and early-termination provisions, Siragusa said, adding stadium renovations could cost between $190 million to $210 million.
The county chose Nixon Peabody because of its experience in about 10 other NFL stadiums, among other things, Siragusa said.
“We just had to make a judgment call and looked at experience level of different firms,” he said. County officials interviewed lawyers at a few firms before they chose Nixon Peabody, he added.
During the 1998 lease negotiations the county spent about $300,000 to $400,000 in legal fees and expenses, Siragusa said. This year, “it could be less, it could be more depending on what kinds of snags” occur, he added.
The Nixon Peabody team will be led by partners Martha Anderson in Buffalo and Elizabeth Columbo in Manhattan, who will tap attorneys from the Manhattan and Rochester offices. Anderson and Columbo did not return messages for comment on the firm’s selection and its billing rates.
Nixon Peabody said in a statement that it is proud to have been selected “for a project that is of significant importance to our community.”
According to Valeo Partners, a Washington, D.C.-based consulting firm that tracks attorney hourly rates, on average, Nixon Peabody’s partners billed $650 per hour in 2011, with top partner rates at $850 to $865. Billing rates for Buffalo attorneys among various firms are generally much lower, hovering around $265 to $415 for partners.
Erie County officials were offered a range of staffing and billing options from the bidders, as well as expert views on approaching the negotiations, according to a review of the RFP responses by the New York Law Journal. Exact billing rates were redacted from the documents.
Samuel Shapiro, a partner of 19-attorney Kavinoky Cook based in Buffalo, said his firm has experience in negotiations for sports arenas and his partner, Laurence Rubin, headed the law departments for city of the Buffalo and Erie County. “Between the two of us, we felt we had a significant amount of experience,” he said.
Shapiro said his firm offered the county a 25 percent discount on its standard billing rates of around $300 per hour. “We believe we have to give back something to the community,” he said.
He also noted the importance of estate planning in the lease negotiations, as the Bills owner, Ralph Wilson, turns 94 this year.
“Once somebody gets to that age, you worry about succession,” he said. Lawyers should address estate planning issues, “so if something happens to the owner, the team will not have to be sold to pay for the estate taxes.”
Jeffrey Appelbaum said his firm, Thompson Hine, offered to handle the negotiations for 10 percent below the firm’s standard rates. The team would have included a Cleveland associate whose rates are in the $200-$300 range, a Cleveland partner who bills in the low $500s, and a New York partner with rates in the low $600s, he said. The firm, based in Cleveland, has a 40-attorney Manhattan office.
Texas-based Winstead, which has about 250 attorneys, offered to consider special rates such as a fixed-fee arrangement and blended rates.
The firm also proposed partnering with Windels Marx Lane & Mittendorf, a 130-attorney Manhattan firm that did not submit its own application. The firm said it has worked with Windels attorneys on multiple real estate projects.
Squire Sanders, the largest law firm by revenue that applied for the Erie County work, provided a “preferred rate for the county” in its response. New York partner Kenneth Bond said the firm presented a “substantial discount.”
“In this case we were aggressive in financing because we wanted to get the deal,” he said.
Squire Sanders was founded in Cleveland and has a 45-attorney Manhattan office.
Hodgson Russ proposed a joint counsel arrangement with Minneapolis-based Faegre Baker Daniels, similar to its arrangement in the last lease negotiations.
“The fact that we are nearing the end of the term of those original agreements without major dispute, incident or issue stands as a testament to the efficacy of this co-counsel arrangement,” the firm said in a letter.
Hodgson Russ’ Gilbride said his firm offered “a slight discount” because it was a large project. However, he said, “it’s not automatic” that the firm gives a discount to a municipality.
The 40-attorney HoganWillig firm suggested a longer lease was more appropriate for this round of negotiations.
“It is important that the county conclude a long-term lease…to ensure the county more security and stability moving forward,” the firm said in its cover letter.
HoganWillig, whose main office is in Amherst, also said in its application that the lease should address control over stadium parking lots and spaces; right to control sponsors and tailgate events on stadium grounds; use of advertising; flexibility to schedule non-football events at the stadium; naming rights; and a “rational share of the maintenance and operating expenses” between the parties.
Representing the Bills in the negotiations is Michael Schiavone, of Buffalo firm Lipsitz Green Scime Cambria, which has about 55 attorneys. Schiavone said he has represented the team for about 23 years for various business matters. He declined to comment on his own billing rates.
Robert Boland, an attorney who chaired New York University’s Preston Robert Tisch Center for Hospitality, Tourism, and Sports Management, said stadiums are now more complex and expensive to build and renovate due to high-tech additions such as multiple digital screens and advertising boards.
But there are also more opportunities for legal work, handling contracts for concessions, naming rights, vendors and sponsorships, he said.
If a law firm has a successful outcome in a stadium project, opportunities can open up in other cities, Boland said.
“Plus, if you’re a firm, there’s a certain intrinsic appeal that you will be covered in the sports pages,” he said.
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