Arena on East Market will create substantial benefits from construction, job creation, and sales and use taxes.
In a new analysis of the tax benefits that the proposed 76 Place will provide to state taxpayers, MuniCap, Inc., which has more than 25 years of experience advising project managers and municipal governments, determined that a new arena on East Market Street will generate an estimated $472 million in new net state tax revenues. The $472 million in state tax revenues is in addition to the approximately $1 billion the project will generate in new tax revenues for the City of Philadelphia and its School District. These new tax revenues would not be available if the 76ers were not building a new arena and stayed at the Wells Fargo Center.
“Since we first announced the new 76 Place at Market East more than a year ago, we have been clear that we are committed to it being as much a benefit to our neighbors and taxpayers as it is to the 76ers and our fans, which is why we won’t use any city taxpayer money to build the arena and have committed to the largest Community Benefits Agreement in Philadelphia history,” said David Adelman, the Chairman of 76DevCo. “Now, MuniCap’s analysis confirms that the project will generate close to $1.5 billion in new tax revenues to the state, city and School District, making 76 Place one of the most significant private sector developments in the city’s history.”
The new MuniCap analysis identified five major categories of tax revenues the new 76 Place will generate:
- Personal income taxes: $74,721,570
- Sales and use taxes: $248,955,213
- Corporate net income taxes: $118,859,284
- Liquor taxes: $28,749,248
- Realty transfer taxes: $800,000
“Our analysis projects that 76 Place will generate significant tax revenues for state taxpayers—more than $450 million in net new taxes generated,” said Max LeVee, a Vice President at MuniCap. “While we have been involved in many high-profile projects over the last quarter century, 76 Place is notable due to its projected positive fiscal impact to taxpayers and its leveraging of private investment.”
In July, the team behind 76 Place announced the new arena will generate more than $1 billion for the City of Philadelphia and its School District due in part to a series of agreements it will make with the city. Among the agreements the team is prepared to make if the project is approved are the conveyance of the underlying property to Philadelphia, removal of the site from the existing TIF and creation of a new PILOT in accordance with state law.
The 76ers first announced its plans for 76 Place at Market East approximately 12 months ago. Since then, the development team has conducted more than 80 meetings with its neighbors and other stakeholders, including a series of five online community information sessions in August, announced new updates in response to community feedback — including the addition of a new mixed income residential building — and announced support from the Building Industry Association (BIA) and the Pennsylvania Restaurant & Lodging Association (PRLA). The City of Philadelphia is conducting an independent study of the project, expected to be finalized this fall. In the coming weeks, there will be exciting announcements about the project including additional community meetings and support for the project.