Long-awaited Arena studies say 76 Place could boost economy but accelerate Chinatown gentrification

The verdict is finally in: A long-delayed analysis of a new $1.5 billion 76ers arena shows that Philadelphia could sustain an NBA arena in Center City and the development could bring $1.9 billion to the economy.

But not all of the results of a series of consultant studies published on Monday evening were positive – or even conclusive – regarding the arena’s impact.

Courtesy of Gensler

A rendering of 76 Place, the planned Philadelphia 76ers arena on East Market Street

The city hired consultants last July to review the proposal for an 18,500-seat arena, focusing on the impact on the area from Spring Garden Street to South Street in a north-south direction and from Broad Street to Sixth Street in a west-east direction.

More than a year later, Philadelphia officials released the results of months of data collection, in-depth studies of arena projects in other cities, and interviews with local focus groups that would be affected by the project known as 76 Place. The studies included a community impact analysis, an economic impact analysis projecting decades into the future, a parking and traffic report, and a design review report.

In the end, there was both good and bad news for supporters on both sides of the arena dispute.

For example, key findings from the community impact analysis show that placing the arena at the corner of 10th and Market streets, just blocks from historic Chinatown, could result in “indirect displacement” of some residents. Although building 76 Place would not eliminate housing and developers have proposed adding some affordable housing, the arena’s presence could have a spillover effect if rents in the area skyrocket and displace low-income residents.

On the other hand, the studies concluded that two large arenas would be financially viable for the city. This contradicts the commissioned study published by Comcast Spectacor earlier this month. This study said that only Los Angeles and New York could finance two arenas.

Both Comcast Spectacor, which owns the 76ers’ current stadium at the Wells Fargo Center, and 76 DevCo, the development group behind a new arena in Center City, made their own arguments for and against building a second major arena last month, reaching very different conclusions.

The city’s own picture falls somewhere in between, showing that a new arena wouldn’t have quite the economic clout 76 DevCorp projected, while contradicting Comcast Spectacor’s claim that a second arena would only result in a handful of additional events in the city.

Highlights of the city analyses include:

• 76Place could create 1,780 direct full-time jobs in Pennsylvania. 76 DevCo’s own study, which was Bisnow, shows that his consultant predicted 10,100 direct full-time jobs, of which about 9,100 would come from the construction of the project alone.
• The arena could provide $1.05 billion in net tax benefits to the city, its school districts and the state. The study linked to 76 DevCo says the cumulative net tax benefits of a new arena would be $1.5 billion.
• If an arena project goes ahead, it could add about $1.9 billion in value to the overall economy over 30 years. According to the 76 DevCo study, the impact could be more than $2.3 billion.
• 76 Place could host an estimated 150 events per year. The study predicts an additional 53 entertainment events such as concerts per year. The study, funded by Comcast Spectacor, predicted that a new arena would only bring eight to 12 additional events per year.
• About one-fifth of Chinatown’s 380 small businesses could derive positive net benefits from a neighboring location, primarily those in entertainment, food, and hospitality services. However, half of all Chinatown businesses would likely derive no net benefit at all from a new location, and 30.1% would derive varying or limited benefits.
• The 76DevCo study assumes that 40% of all event-goers would take public transit directly to the arena. But the studies commissioned by the city say that’s “not a foregone conclusion” and point out that careful planning with SEPTA and PATCO must first take place. To reach the 40% mark, all tickets would have to include a free public transit pass, city consultants said.
• The developers of 76 Place would need to pay attention to mitigating potential traffic congestion during events, coordinate traffic measures for Interstate 676 exits, provide additional parking in the 900 block of Chestnut Street for rideshare vehicles waiting for passengers, and take other measures.
• The existence of the arena could lead to an increase in panhandling behavior and therefore a larger homeless population in the area, which could potentially negatively impact the perceived safety of the surrounding streets.
• Because the arena project would require demolition of part of the Fashion District shopping center, the mall’s tax benefits would be reduced.
• A second arena would likely have little or no impact on attendance at the Wells Fargo Center hockey stadium or on ticket prices for NHL games.
• The Wells Fargo Center could take a financial hit, particularly in terms of suite revenue generation, which could mean a 15 to 25 percent drop in revenue. Suite rates would be reduced for both areas.

Courtesy of Gensler

As for Chinatown’s gentrification, city planners have determined that the neighborhood is at risk with or without the arena. The area’s Asian and Pacific Islander heritage is declining as rents and real estate prices have increased in recent years.

Studies commissioned by the city suggest that 76 Place would likely have the greatest impact on older residents, who may move away if the arena is built and local gathering places disappear.

“If the arena were actually built here, the seniors might just decide to move away from Chinatown because we are concerned about the uncertainty surrounding Chinatown’s growth,” said an unnamed resident, according to a translated statement in the study.

Comcast Spectacor and the 76 DevCo representatives said Bisnow They independently review the city’s study and compare it with their own.

Daniel Hilferty, CEO of Comcast Spectacor, praised Mayor Cherelle Parker’s transparency in releasing the study results in a statement.

“We believe what’s best for the fans and the community is for the 76ers and Comcast Spectacor to remain united and based in South Philadelphia,” Hilferty said. “To that end, we continue to offer the 76ers a 50/50 partnership of the Wells Fargo Center and have made it clear that we are open to building a new arena together at the right time.”

76 DevCo said the studies demonstrated the feasibility of the plans it had always put forward.

“The arena is an appropriate use for Center City and will generate many new jobs and tax revenues because Philadelphia can support two arenas,” a spokeswoman said in an email. “Our parking and traffic assumptions are feasible and these results are further proof that 76Place can be developed in a way that protects our neighbors and maximizes the benefit to Philadelphia.”

Now those involved will review the project and decide whether it will move forward as planned. Council member Mark Squilla, whose district includes Chinatown and the planned arena site, had previously stated that the public would have 30 days to review the studies before a law is passed on their fate.

Squilla will have a disproportionate say in every vote thanks to the Philadelphia tradition of council prerogative. This tradition gives the representative whose district includes the land almost complete authority in land use decisions.

The developers of 76 Place have stated that they must begin construction by 2026.