76 Place will generate approximately $1.5 billion in new taxes for the city, state and School District — over $800 million for the city, $200 million for the School District and $450 million for the state. These are new funds that would otherwise be unavailable if the 76ers remained at the Wells Fargo Center.
To quantify the tax benefits of 76 Place, we hired MuniCap, a firm with over 20 years of experience in tax projections and advising municipal governments across the country, to estimate tax revenues by applying the City’s taxing methodology and tax rates to the taxable operations for both 76 Place and the redesigned Fashion District Mall. Its’ analysis assumes removal of the arena parcels from the existing TIF district, construction of the arena, and repositioning of the Fashion District Mall.
The tax streams analyzed include wage, business income, sales & use, use & occupancy, property, amusement, outdoor advertising, realty transfer and liquor taxes and are based on construction and operating assumptions for the arena and portion of the mall to remain. The key underlying assumption is that Philadelphia will host 50 additional events each year as the result of having a second arena, a conservative estimate from CAA Icon, an industry-leading sports and entertainment consultant, that has been reviewed by multiple industry experts, concert promoters, and analysts. Industry leaders, including Irving Azoff, FELD and Live Nation have all confirmed Philadelphia is currently underserved and can handle a second arena, as it did when both the Wells Fargo Center and the Spectrum operated for over a decade.
The estimated tax revenues were first calculated on a gross basis, and then the tax revenue currently generated by the existing uses on site was subtracted as well as the tax revenue currently generated by the Sixers games and other events that are already occurring in Philadelphia at the Wells Fargo Center. This was done in order to ensure there was no “double counting” of tax revenue.
MuniCap’s analysis does not include any estimates of taxes generated by offsite activity such as spending at restaurants, bars, retail, hotels or other businesses: it is solely based on the onsite activity and thus is a conservative outlook on the overall tax impacts.
The detailed analysis has been submitted to the City for independent review and analysis by their consultants. For more information, please visit 76place.com, where the details of the two MunciCap studies are posted.
