Tom Garlish/The Philadelphia Inquirer via AP
A supporter of the proposed new 76ers arena expresses his opinion in City Council chambers, October 24, 2024, in Philadelphia, during a protest after the legislation needed to authorize the arena was introduced.
If a proposed sports playpen threatened to crush a historic enclave, scatter people, and hollow out a major asset of a public transit system in fiscal crisis, a city with a clue would send those team owners packing. But the Second Gilded Age requires monuments to excess, and Philadelphia is ready to deliver.
On Thursday morning, after a twice-postponed vote the day before, the Philadelphia City Council moved forward with 76 Place, a $1.5 billion professional basketball arena financed by the owners of the Philadelphia 76ers, the city’s NBA team. The controversial project on the doorstep of the city’s Chinatown threatens that neighborhood, other residential areas, and small businesses in the downtown core.
The team’s community benefits agreement offer has proved to be backdrop in the latest chapter of the arena saga, with councilmembers and community groups trying with little success to get a better deal out of the team. The Sixers owners have responded to demands for better benefits with threats like moving to New Jersey, eager to extract concessions from fearful politicians without giving up another dollar that might cut into the team’s astronomical profits.
The night before the hearing, councilmembers revisited a $50 million, 30-year community benefits agreement (CBA) originally negotiated by Mayor Cherelle Parker. (When a few men shoveling billions into their many portfolios expect a city to settle for $1.67 million per year over the span of three decades, and demand that the transit system provide and pay for the additional game-day services, those are certain signs that “the system” has failed.)
The city’s leaders discussed a $100 million CBA. Some community groups have demanded as much as $300 million. So the Sixers’ ownership (personal net worth nearly $20 billion, team valuation nearly $5 billion) upped their CBA offer to a grand total of $60 million.
The councilmembers took it and ran. Parker hailed the 12-4 vote as “extend[ing] far beyond the basketball,” even though $2 million per year in a large, poor American city is an insult.
Since the 1990s, communities have been warned by sports economists, city planners, and journalists that teams structure arena and stadium deals to benefit themselves, not residents. Thousands of pages have been filled with the poor decision-making involved in steering millions of taxpayer dollars, directly or indirectly, to provide services for projects that sports team owners want and elected leaders facilitate.
If Philadelphia’s Chinatown is expendable and community benefits are negligible, it’s not surprising that the crisis plaguing the public transportation system serving the area has been minimized by city leaders and team owners.
Since the 1990s, communities have been warned that teams structure arena and stadium deals to benefit themselves, not residents.
The plan for the arena is to essentially build it on top of the existing Jefferson Station, a major subway, commuter rail, bus, and trolley hub that serves the downtown core. A May transportation impact study conducted by the city's consultants and paid for by the Sixers concluded that steering event attendees to transit could mitigate the traffic nightmares that loom large over a city center with dozens of narrow feeder streets. The Southeastern Pennsylvania Transportation Authority (SEPTA) is the key to sparing downtown Philadelphia this gridlock.
With federal COVID funding finally drying up, SEPTA has far bigger problems than providing service to a new downtown arena. The country’s sixth-largest transit system has a $240 million budget deficit. To avoid levying a massive fare increase on riders, Gov. Josh Shapiro “flexed” $153 million in federal highway funds, a permissible but not often-used tool, to SEPTA to plug this fiscal year’s budget hole as a short-term stopgap. According to the Federal Highway Administration, the agency authorized the transfer to the Federal Transit Administration (FTA) in early December, and FTA will oversee the transfer of those monies to SEPTA.
A longer-range statewide transportation budget solution that includes SEPTA and other statewide assets has yet to be developed. But the governor and state lawmakers, particularly the Republicans who control the state Senate, continue to talk around it.
The day before a narrowly avoided mid-November strike by transit workers, SEPTA stepped into the void with its own impact assessment on the 76 Place plan. Crafted in neutral tones, most transit studies are pro forma evaluations of a project’s pros and cons. SEPTA delivered something of a twist, a scathing (for a transit agency) condemnation of the fiscal and spatial limitations of building an arena on top of an existing rail station.
Another question mark for SEPTA revolves around the team’s projection that 40 percent of arena attendees would use transit options like regional rail lines and buses. (Currently, 85 percent of event attendees, including Sixers fans, drive to the Wells Fargo Center, situated in a purpose-built sports complex several miles from downtown, with acres of parking.) Plans have been floated by the team to provide some or all attendees transit passes for one year.
Providing new levels of service to reach that 40 percent goal would cost SEPTA between $20 million and $25 million per year—money it doesn’t have. The agency doesn’t expect that it will be able to recoup those funds through fare revenues. (The agency estimates it would need 20 more trains in the evening every day and five buses on current routes.) SEPTA flatly states that the 40 percent goal is “an assumption” that Harris Blitzer Sports & Entertainment (HBSE), the entity that owns the team, has not studied.
SEPTA concludes that construction disruptions and delays—six years’ worth, to be exact—at Jefferson Station would cost the system anywhere from $25 million to $50 million. HBSE, however, “expects minimal disruption to service,” an unrealistic assumption during major construction.
The construction “risks degrading the transit user’s experience,” SEPTA claims, which would lead to decreased ridership and revenues for one of the system’s more attractive underground stations. (It benefits from an atrium that brings natural light.) More than a few local critics have compared these proposed changes to the ones foisted on the “new” Penn Station in New York. SEPTA has warned that “dark spaces and corridors are less inviting to public circulation and are commonly associated with the perception of crime and limited safety,” which is a perfect summation of attitudes toward Penn Station today. Vincent Scully, an art and architecture historian, once remarked after Madison Square Garden replaced the palatial old Penn Station that “one entered the city like a god; one scuttles in now like a rat.”
SEPTA officials testified at a November hearing that the team did come up with updated design plans. But those designs “would not change the impacts [analyzed in the report] in any meaningful way.”
Most importantly, HBSE fails to realize that SEPTA must demonstrate to the Federal Transit Administration that the non-transit structural changes that 76 Place requires will not compromise the federal investments that have already been made. (It remains unclear how the incoming Trump transit officials view the plan’s current federal requirements.) Even more ironically, the deep-pocketed owners continue to bank on state or federal assistance, two very wild cards, especially since the federal environment of 2025 promises to be difficult for urban public transportation systems to navigate and Pennsylvania is likely to be less disposed to spend its limited transportation funds on a private project.
Some 76 Place supporters have admitted that SEPTA’s objections are damning. A few councilmembers want the team to offset some of the agency’s construction and operations expenditures; others have adopted what amounts to a “build it and see” approach. What is evident is that the project would significantly disrupt SEPTA operations and finances, an issue that the mayor and a majority of city councilmembers appear to believe that someone else will handle.
SEPTA’s fiscal crisis has been largely ignored in the debate over a new shiny bauble that the city wants to plunk on top of Jefferson Station, despite the authority’s own analysis that the arena plan will leave it in worse shape. Burdening a debt-ridden transit system with providing service to a controversial privately financed project is a stunning example of weak city leadership, misuse of taxpayer dollars, and a failure of creative vision on how best to revitalize a city center in the post-pandemic era.
The final Philadelphia City Council vote on 76 Place takes place on December 19.