NEW ARENA WILL GENERATE MORE THAN $1 BILLION IN NEW TAX REVENUES FOR CITY, STATE AND SCHOOL DISTRICT OF PHILADELPHIA, GIVE CITY ADDITIONAL CONTROL OVER PROJECT
Philadelphia, PA, July 27, 2023 – As a follow up to the City of Philadelphia and the Philadelphia Industrial Development Corporation’s (PIDC) announcement that firms have been retained to conduct an independent analysis of the proposed 76 Place at Market East, 76 Place is releasing 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, previously submitted to the city, is a plan to generate more than $1B in new tax revenues for the city, state and School District of Philadelphia, and give the city additional control and influence over the project. Initial analysis by the team shows the new 76 Place on Market East will generate additional tax benefits totaling $200M for the School District of Philadelphia and $800M for the city until the end of the 30 year lease term.
“The new 76 Place at Market East will be an exciting new home for the team and a benefit to the city, including its neighbors in the Fashion District, Jefferson, Chinatown, Midtown Village and Washington Square West, area businesses and workers,” said David Adelman, the Chairman of 76DevCo. “The new 76ers arena will be one of less than five arenas developed across the country over the last 20+ 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.”
76ers Will Convey Private Land to City of Philadelphia
Among the agreements 76 Place is prepared to make is the conveyance of currently private land to the City of Philadelphia. The precedent in Philadelphia, and generally across the country, is for cities to own the land of stadiums and arenas. Cities, Philadelphia included, frequently contribute public property at no cost to developers, however the 76ers will use private funds to purchase the land and convey it to the city at no cost. 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.
76ers Will Remove the Arena Site from the Existing TIF
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. This will result in significant incremental tax revenue for the city and School District during this time period and beyond.
76ers Will Create New PILOT in Accordance with State Law
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 totaling $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. Calculation for taxes benefitting the state will be forthcoming.
“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,” said Adelman. “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 76ers first announced its plans for 76 Place at Market East approximately 12 months ago. Since then, the development team has been on a listening tour, conducting more than 50 meetings with community leaders, neighbors, workers and government officials to discuss the project and understand how the official proposal could address the needs of the community. In the coming weeks, there will be exciting announcements about the project including additional information about community meetings and opportunities for community engagement.