Net Loss?

Recent study finds the Sixers’ new arena could cost millions in lost tax revenue

In the heart of Philadelphia, a heated debate simmers over the Philadelphia 76ers’ ambitious plan to relocate to a new, state-of-the-art arena dubbed “76 Place,” set to be nestled near the historic and vibrant Chinatown. With a price tag of $1.55 billion, this proposal has stirred a whirlwind of reactions across the city’s diverse communities: hope, anticipation, skepticism, and outright opposition. Public debate has been fierce and on-going.

The proposal has indeed captured the city’s imagination and sparked considerable buzz, partly due to the significant economic implications and potential transformative impact on the urban landscape. While some stakeholders envision the arena as a beacon of progress and economic revitalization — particularly for the blocks east of City Hall where various efforts to revitalize the area have failed, including most recently the “Fashion District” (whose developer declared bankruptcy last December). Others, however, foresee a disruption to the cultural and social fabric of one of Philadelphia’s most cherished neighborhoods.

Amidst this polarized backdrop, the endorsement of the arena project by influential entities such as the Black Clergy of Philadelphia signals a complex interplay of interests and perspectives. The clergy views the development as an opportunity for economic empowerment and community improvement, highlighting the potential for job creation and increased city revenues. Furthermore, canvas teams working for the 76ers report they’ve gathered more than 30,000 signatures in support of the project.

However, this approval is far from universal. A significant majority of Chinatown’s businesses and residents have strongly voiced their opposition. They cite data-based concerns that the arena will erode the neighborhood’s unique character, displace long-standing businesses, and exacerbate traffic congestion and pollution.

This resistance has been further fueled by a new analysis conducted by Dr. Arthur Acolin of the University of Washington, which casts doubt on the financial boon promised by the arena’s proponents. Acolin’s study suggests that “76 Place” could lead to over $1 billion in lost tax revenue for Philadelphia and Pennsylvania, challenging the rosy economic forecasts put forth by the 76ers and their development arm, 76 DevCo.

The study argues that the displacement of existing businesses, coupled with potential shifts in consumer spending patterns favoring arena-centric consumption, could undermine the economic vitality of the surrounding area, particularly during the construction phase and in the decades following the arena’s opening.

In defense of their vision, the 76ers has said through a spokesperson that Acolin’s analysis is flawed and lacking in credibility, insisting that the arena will generate an estimated $1.5 billion in new tax revenue and serve as a catalyst for urban renewal. They argue that detractors are obscuring the project’s benefits with misinformation and ungrounded fears. Obviously, the Sixers’ billionaire owners know a thing or two about money — stands to reason, then, that their investments will be similarly successful.

And of course, the Sixers have financed their own impact studies (commissioned by the city), which they claim will refute the University of Washington’s analysis. Their numbers, they say, show the arena could generate as much as $1.5 billion in new taxes over what the current Wells Fargo location brings in every year. As we await the public release of this information, the zoning approval process looms on the horizon, promising to be a critical juncture in determining the project’s fate.

The unfolding saga of “76 Place” reflects the complicated challenges of urban development, which must balance economic aspirations with the preservation of cultural heritage and community integrity. Meanwhile, competing interests continue to clash as the project hangs in the balance, along with the future of Chinatown as well as broader implications for the city’s identity and prosperity.

This article is a summary of Aaron Moselle’s excellent article for WHYY originally published February 22, 2024 and printed in March’s edition of The Local paper though a N.I.C.E. Shared Content agreement. 

For more information about the proposed arena (plus deeper dives into the recent rise of “stadium districts” in major US cities), please click the links in this post. In addition, noarenaphl.org is a local hub with updates, stats, sources, and even a “Save Chinatown” petition you can sign to join a coalition of more than 20 organizations joined with residents in protesting the arena. Follow on Facebook and Instagram.

Thoughts? Questions? Please leave them below in the Comments.