I would retrofit the present stadium in OP. Mainly for two reasons, cost and infrastructure.
It wouldn't be as expensive to renovate Rich Stadium as it would be to build a new stadium. Right off the bat just the land acquisition and utilities being set up costs a lot and a downtown stadium would require a lot of space
Even more so would be the infrastructure required to make it work. Sabres games are bad enough with 30+ min wait times, now multiply that by 3 or 4 and just imagine the gridlock. The state would need to pour funds into Buffalo just to build infrastructure with the stadium itself being a separate funding enigma. Parking would be ridiculously expensive. And Buffalo's public transit is rather tiny.
An inner-city stadium would likely kill tailgating which is effectively one of the primary draws for Bills fans year in and year out and or reduce it to a degree that would make it nothing special. Buffalo Bills fans are an older average crowd (season ticket wise) and still have some struggles with paperless ticketing; how will that demographic deal with price hikes and travel time increases? There isn't enough of a young rich crowd to pick up the slack thus we'd likely see the Bills crowds shrink by a great number as tailgaters stay home to party and some of the older crowd just stay home lamenting of days gone by.