Bergen County—This year’s Super Bowl is a confusing beast because it has two “owners”: New York and New Jersey. The game’s host state usually stands to bring in several hundred million in revenue, but with New Jersey acting as the physical host and New York, in large part, as the cultural host, things are a bit muddled.
MetLife Stadium is in East Rutherford, N.J. and Secaucus, right next door, has plans for ice sculptures, food trucks and a beer garden. Manhattan, however, will have Super Bowl Boulevard running down Broadway with concerts, autograph signings and a toboggan run. Thus, the competition to attract tourists in town for the game makes it more difficult for New Jersey to get a sizeable share of the $550 million predicted to flow into the economy.
Even so, New Jersey proprietors of hotels and restaurants stand to make a lot in the week of the game in spite of the competition for visitor business. The State Occupancy Fee imposes a tax on the rental of hotel and motel rooms equal to 5% of the rental fee. Area hotels are, and have been, booked solid at premiums for months now. Hotels have been able to jack prices up to 800% of their regular value and impose minimum stays of multiple nights. The W Hoboken Hotel, for instance, is charging $759 a night with a four night minimum stay. Payment for four nights nets $151.80 in tax dollars. Additionally, there are an estimated 150,000 hotel and motel rooms in the area.
The W Hoboken is not a unique case. A standard double usually goes for $94 a night at the Howard Johnson Inn in Clifton, but rooms are listed at $900 per night Super Bowl weekend. The closest hotel with rooms still available, The Rodeway Inn Meadowlands, normally goes for $79 a night, but guests are paying more than $700 a night for the two-star hotel the weekend of the game. The most affordable hotels in the New York/New Jersey area have overnight rates of at least $300.
Despite the game taking place at the Meadowlands, New Jersey won’t make any tax money off of ticket purchases or concession purchases at MetLife Stadium. Normally, the New Jersey Sales and Use Tax Act imposes a 7% tax on admission charges and, in conjunction with the 2% Sports and Entertainment Facility Tax, there is a total tax of 9% on all ticket purchases. But MetLife has a deal with New Jersey. In place of taxes, it pays around $6 million a year in leasing fees because the stadium is on state owned land.
The government can impose the taxes if they deduct the amount earned from the rent. In this case, with tickets initially sold at retail price to raffle winners for $1,000 each, New Jersey would make $90 for each ticket sold in the 82,566 seat stadium for a total of $7,430,940 in taxes. If the assumption is made that each of the 82,566 attendees will purchase one small draft beer, New Jersey would make an additional $49,539.60 if they charged taxes. Total, New Jersey would make $7,480,479.60 in taxes off of tickets and beer. This would mean that neither the Jets nor the Giants would pay any leasing fees for the year; in fact, they’d have credit toward the next year. William Quinn, the state treasury department director of communications, declined to comment on the issue.
Outside of the stadium, however, thousands of visitors will purchase beer with a 12% tax and quite a bit of prepared food in addition to meals at restaurants at a 7% tax rate.
MetLife and the Meadowlands sports complex are overseen by the New Jersey Sports and Exposition Authority and its president, Wayne Hasenbalg, is confident in New Jersey’s ability to make money with the teams, media and fans staying in local hotels. “We’re not just sitting back waiting for the NFL or others to say, ‘OK, New Jersey, here’s what you’re getting,’” Hasenbalg said. “We’re working as closely as we can, but we’re also going to try to maximize the benefit to New Jersey from an economic perspective, to help local vendors and people who provide services.”
Secaucus Mayor Michael Gonnelli has estimated that there will be $50,000 in extra municipal services costs the week of the game. The NFL does not pay any of that money back. Jim Kirkos, chief executive officer of the Meadowlands Regional Chamber of Commerce, said that revenue connected to the event will still outweigh the expenses.
Additional expense comes from MetLife Stadium, which was partially built to entice the NFL to hold the Super Bowl in New Jersey. While no tax dollars went toward the redesign or construction, there are still associated expenses being paid with tax dollars. The new stadium was bankrolled entirely by the co-owners of the Giants and the owner of the Jets, but the state has spent $250 million on improving surrounding highways and constructing a new train station nearby. The original stadium was built in the late 1970’s for $75 million. That cost, in addition to other related costs over the years, has left taxpayers still paying off $100 million in bonds for what is now a parking lot. But, the stadium owners are not required to collect taxes on stadium parking.
A definitive accounting of the economic impact of the Super Bowl on the state won’t be clear until after the game.
By Aliza Chasan