After Philadelphia approves new downtown arena, NBA's 76ers agree with landlord Comcast to build new shared (with NHL's Flyers) arena at current complex.

Barely a month after the Philadelphia City Council approved, 12-5, legislation to allow the NBA's Philadelphia 76ers to build a new downtown arena (dubbed 76Place) in Market East, and more than two years after debates, protests, studies, public hearings, and more occupied a good deal of civic energies, came Sixers’ shocking arena pivot, as the Philadelphia Inquirer put it this morning.

Once gaining leverage over their landlord, Comcast Spectacor, which owns the Wells Fargo Arena and the NHL's Philadelphia Flyers, the 76ers cut a deal with Comcast to build a new arena at that South Philadelphia sports complex. Details are expected today.

Screenshot from 76Place

"Now that the Sixers arena is dead after they used city officials as pawns in a landlord-tenant dispute and completely monopolized our already insane local politics for 2 years, Comcast can at least build their very real biomedical lab proposal at the Fashion District site now," local Chris Olley tweeted, referring to struggling mall, of which the western third would've been effaced for 76Place.

"Can’t believe we wasted so much brainspace on this negotiating ploy," tweeted Inquirer architecture critic Ingrid Saffron.

Looking to proposed arena site, Dec. 5, 2023. Photo: N. Oder

Was it ever realistic?

My comment: "& I can’t believe that consultant CSL’s report the two Philly arenas could together thrive wasn’t treated more skeptically."

As I wrote in September, CSL, which has a record of unsustainably sunny financial projections for arenas like the Barclays Center, unsurprisingly concluded—to praise from 76Place backers—that Philly could support two financially viable arenas, thus generating more spending, jobs, and tax revenue. 

Wells Fargo would retain the NHL’s Philadelphia Flyers as anchor tenant. Alternatively, as a Sportico expert previously suggested, the new downtown arena would “siphon off” revenue, becoming the dominant venue and boosting the 76ers’ value.

Indeed, CSL’s claim that Philadelphia could support 53 additional annual events, including 35 concerts, rests on questionable comparisons, notably a portrayal of a steadily growing New York market that ignored two now-closed arenas.

My annotation of Philadelphia Inquirer chart based on CSL study

No wonder Saffron told Common Edge last month, "B

ut the more I thought about it, the more I thought, Wow, at most, this building will be active 150 nights a year. That’s their number. Market Street needs 24/7 activity, so how will a big, dark box save this retail corridor? There are also very few two-arena cities where the arenas actually make money, because they basically split the business. The Wells Fargo Center right now has about 200–220 events a year."

Another issue, of course, is cost: how much public assistance, even indirect, would be available from the current site versus the proposed site. (Answer: it's complicated.)

The summary

The Inquirer's coverage of the deal noted that neither the venue representatives nor the Mayor and Council President would comment. But some Council Members who supported the move, were frustrated, while Council Member Mark Squilla, who represents the proposed site, thought the process might lead to reinvestment in Center City.

Looking south to arena site from Chinatown 
gate. Photo: Norman Oder. Dec. 5, 2023

However, noted the Inquirer, the 76ers' commitment to a $60 million Community Benefits Agreement, over 30 years, is unclear. That sum was raised, modestly, from the $50 million proposed.

Though activists in Chinatown, essentially adjacent to the 76Place site, organized against the expected traffic and residential/business displacement, and two left-wing Council Member praised the impact of organizing, it looks like this was all about leverage.

(That said, economist J.C. Bradbury suggested that both neighborhood opposition and critical press coverage deserved some credit for tilting the balance.)

The Inquirer quoted Council Member Jamie Gauthier as concerned not just about the effect on Chinatown but also on SEPTA's Jefferson Station, below the proposed downtown site, which would've required very careful construction.

In Chinatown, joy and relief as Sixers abandon plan to build an arena on the neighborhood’s southern edge, the Inquirer reported. Meanwhile, Sixers still plan to bid for WNBA team despite change in arena plans, which makes sense.

Last months' deal

Last month, the Inquirer reported, Inside the 76ers arena agreement approved by Philly City Council members, which includedMayor Cherelle Parker's commitment of $20 million in city funds for affordable housing in Chinatown. 

(That's not a lot, especially over multiple years. The Inquirer noted there wasn't a timetable attached, but it would build on $3 million--again, peanuts--from the team for affordable housing.) 

The original CBA promise

The CBA included, in the Inquirer's summary:

• Increasing funding from $14.2 million to $17.5 million for a new special services district that will provide public safety, cleaning, and other services around the arena.
• Increasing aid for businesses that will face disruptions during the arena’s construction from $1.6 million to $5 million.
• Doubling funding, to $3 million total, for a new “neighborhood security sub-station” that will include staff from the Police Department, SEPTA, the Center City District, and Jefferson University Hospital.
• $3.5 million for the Philadelphia City Fund, formerly known as the Mayor’s Fund, for grants “that support the children of Philadelphia.”
• $1 million for city parks and recreation center renovations.
• $1 million for an apprenticeship and workforce development program.
• $2 million for a Chinatown Legacy Business grant program.
• $250,000 in seed money for a Chinatown Community Land Trust.

I'd note that's rather small potatoes for workforce development and business aid. However, the notion of a special services district is something that has been suggested for the area around the Barclays Center, but never came to fruition. 

Nor is there a security sub-station near Barclays, though the 78th Precinct--not very forward-facing to the public--is a block away.