The company behind the proposed delivery of 76 Place, a new $1.3bn (£1.01bn/€1.18bn) arena for NBA basketball franchise the Philadelphia 76ers, has said it will convey currently private land to the City of Philadelphia as part of fresh revelations about the project.
The latest announcement is intended as a follow up to the City of Philadelphia and the Philadelphia Industrial Development Corporation’s (PIDC) declaration last week that firms have been retained to conduct an independent analysis of the proposed 76 Place at Market East.
76DevCo has released details of key agreements it is prepared to make with the city, to be included for consideration in the city’s due diligence process and the studies it has commissioned.
Central among those commitments is a plan to generate more than $1bn in new tax revenues for the city, state and School District of Philadelphia, and give the city additional control and influence over the project.
“The new 76 Place at Market East will be an exciting new home for the team and a benefit to the city, including its neighbours in the Fashion District, Jefferson, Chinatown, Midtown Village and Washington Square West, area businesses and workers,” David Adelman, chairman of 76DevCo, said.
“The new 76ers arena will be one of less than five arenas developed across the country over the last 20-plus years that are privately financed, a stark contrast from all of the stadiums in the current South Philly Sports Complex that took city taxpayer funds or land for development and construction.
“With these proposed agreements, our project will significantly add to the city tax base, while maintaining the status quo would simply provide a financial benefit to Wells Fargo Center and its parent company Comcast.”
Among the agreements, the 76 Place scheme is prepared to make is the conveyance of currently private land to the City of Philadelphia. The precedent in Philadelphia, and generally across the US, is for cities to own the land of stadiums and arenas.
The 76ers will use private funds to purchase the land and convey it to the city at no cost. The team argues that public ownership of the land will give the city more influence over the arena design; power to enforce the largest legally binding Community Benefits Agreement (CBA) in the history of Philadelphia; and ensure arena access for community events and emergency services.
As part of the 76ers’ negotiation with the city, upon demolition and conveyance of the arena site to the city, it will be removed from the existing Tax Increment Financing (TIF) structure, which is set to expire in 2035. The team claims this will result in significant incremental tax revenue for the city and School District during this time period and beyond.
In accordance with state law and tax code for sport venues that is followed by all of the arenas and stadiums in the South Philly Sports Complex, a PILOT (Payment in Lieu of Taxes) will be created. This structure will yield a net positive outcome compared with taxes paid by the site today; however unlike other venues across the country whose payments go to publicly finance those arenas and stadiums, 76ers’ PILOT payments will go to the City.
Initial analysis by the team shows the new 76 Place on Market East will generate additional tax benefits totalling $200m for the School District of Philadelphia and $800m for the city until the end of the 30 year lease term. This estimate is based on a conservative estimate of 50 new events in Philadelphia as a result of creating a second arena.
“We have been clear since this project was first announced: we are committed to making 76 Place a win for the team, our fans and the city,” Adelman added.
“These agreements we’re prepared to make with the city keep that commitment by generating new tax revenues – revenues that won’t be available if the 76ers stayed in the Wells Fargo Center – and give the city more discretion over the project to ensure it’s a true community asset.
“We believe when the city’s analysis is complete, it will be clear how much of a benefit a new arena will be for the city, its workers and taxpayers.”
The Sixers announced plans to build a new arena in July last year, with a dedicated company set up to oversee the project. The arena, which will be privately funded, has been given the provisional name of 76 Place and would form part of the Fashion District Philadelphia.
It is hoped the arena will be completed in time for the 2031-32 NBA season, but groundbreaking is not expected for several years. The timeline for the project foresees that construction will not begin until 2028, after the necessary approvals, design process and demolition work is carried out.
Last month, the Sixers revealed new renderings of 76 Place courtesy of Gensler and CBL Real Estate. The arena would have a capacity of 18,500, slightly less than Wells Fargo Center, the team’s current home, which holds 20,478 fans.
The Sixers share Wells Fargo Center with NHL ice hockey franchise the Philadelphia Flyers. The arena is owned by Comcast Spectacor and the Sixers’ lease at the facility is due to expire in 2031.
When announcing plans for a new arena last year, the team said it was “thankful” for the recent renovations carried out at Wells Fargo Center by Comcast Spectacor, but claimed these improvements are “typical for arenas that are 20 years old and will not significantly extend the life of the building”.
However, 76 Place has been met with opposition, most notably from residents and business owners from the Chinatown neighbourhood the arena would border. They claim the project will lead to traffic congestion and price them out of their homes and businesses.
In response to the 76ers’ latest move, a city spokesperson told CBS News Philadelphia: “As we have said from the very beginning, the City has an obligation to complete its due diligence in understanding the impact the proposed downtown arena may have on the surrounding communities before any plans move forward.
“That is why over the coming months, PIDC, the City’s partner and lead economic development agency, is supporting the City as it conducts its due diligence to better understand the impacts on the surrounding communities. Three requests for proposals (RFPs) will independently evaluate the building design, community impact and urban planning, and the economic impact of the proposed project.
“As part of the commissioned independent economic analysis the City is conducting with PIDC’s support, the selected firm CSL will evaluate construction costs, projected revenues and expenses, tax revenues associated with construction and operations, financial feasibility, and capacity of Philadelphia to support two professional sports arenas.
“This will encompass evaluation of the proposals outlined in the Sixers announcement including conveying private land to the City, removing the arena site from the existing TIF and creating a new PILOT in accordance with state law. CSL will also do an assessment of comparable arenas, including an analysis of markets supporting more than one arena.
“The City has met and will regularly meet with community representatives to ensure that their concerns about the proposed project and process are noted, and where possible, adjustments will be made to ensure that the City’s response is equitable and fair.”