A billion-dollar saga: How the Sixers arena proposal went from a done deal to a stunning reversal

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The news was stunning.

Less than a month after the 76ers got the green light to build a $1.3 billion arena in Center City, the team announced it was walking away from the project and partnering with Comcast Spectacor to develop a new facility at the sports complex in South Philadelphia.

The decision, which came to light Sunday, upended a development more than two years in the making, following a string of daylong public hearings, hours of closed-door negotiations and hundreds of protests and rallies organized by arena opponents.

As we await more details on the new proposal, here’s how we got to this moment.

Background

In July 2022, the Sixers announced a proposal to build a new basketball arena in Center City.

The privately funded facility, dubbed 76 Place, would sit atop SEPTA’s Jefferson Station at 10th and Market streets, taking over about a third of the Fashion District mall.

If approved, the team would open the arena in 2031, when its lease expires at the Wells Fargo Center in South Philadelphia.

The news drew a mix of optimism and opposition.

While elected officials and real estate experts applauded the proposal for its potential to help revitalize a struggling commercial corridor, residents in nearby Chinatown quickly denounced the development, saying it would dismantle the 150-year-old ethnic enclave.

Activists vowed to fight the project with the same gusto they fought other large developments planned for the neighborhood.

“This is not the first time that big developers proposed to build something without our input: the baseball stadium, the casino, to name a few,” said Wei Chen, civic engagement director at the Chinatown-based nonprofit Asian Americans United, in a statement that July. “We have defeated each of them. We are ready to fight to protect our community.”

Revitalizing Market East?

Against that backdrop, the Sixers launched an outreach campaign designed to educate residents and stakeholders about the controversial project. In November, the team hosted a series of tours of the proposed site.

The team’s pitch was rooted in economic development.

The arena, representatives argued, would be a catalyst for changing the fortunes of Market East. Once home to the city’s premier retail hub, the area has widely been considered a dead zone with a disjointed commercial corridor that no one could revive despite millions in investment, including the $400 million it took to open the Fashion District mall.

Building the arena, slated to be open about 150 nights a year between games and concerts, would encourage private real estate developers to invest in Market East, they said.

David Adelman, chair of 76 Devcorp, the team’s development arm, told reporters the team hoped to have the legislative approvals it needed to start construction by June 2023, as well as a community benefits agreement in place before that.

By then, the Sixers had held over 80 community meetings with more than a dozen groups representing Chinatown.

“I think people are really receptive to what we’re looking to do. And the main reason is if we don’t do this and the mall goes bankrupt, someone knocks it down, you could build three Liberty Place towers on those three blocks by right … and the community would get nothing,” said Adelman at the time.

But about two months later, the reception at a packed town hall in Chinatown made it clear that many residents and business owners in the neighborhood were strongly opposed to the team’s arena proposal.

Their top concern: traffic. The arena would create such a traffic nightmare, they argued, that people would avoid Chinatown on game days, hurting hundreds of small businesses in the process. There were also deep concerns about the project displacing longtime residents as a result of rising property values.

As the meeting inside the restaurant Ocean Harbor wrapped up after nearly three hours, members of the audience began to chant as team officials made their exit.

“Hands off Chinatown,” they yelled.

Preparing for battle

By the time the Sixers announced they were staying in South Philadelphia, arena opponents had organized hundreds of protests, rallies and press conferences to urge elected officials not to back the team’s arena proposal.

The opposition was hard to ignore. But the Sixers did have people in their corner pushing for the arena to be built, including the Philadelphia Building and Construction Trades Council, the politically powerful umbrella group that represents more than 50 unions in the construction industry.

Members argued the arena would create hundreds of family-sustaining jobs while providing the city with much-needed tax revenue, and an opportunity to transform Market East.

The Sixers also got support from the Building Industry Association of Philadelphia, the Black Clergy of Philadelphia and Vicinity, the Philadelphia chapter of the NAACP, and the African American Chamber of Commerce.

Some backed the project because of a promise the Sixers made to create a $2 million fund dedicated to preparing Black-owned businesses to be vendors, suppliers and concessionaires at 76 Place. The team also said they wanted to have Black-owned businesses run 40% of the food, drink and concession operations at the arena.

“Too often, Blacks have played on the court, but not at the cash register in the business of professional sports. [76 Place chairman] David Adelman and the 76ers are changing that,” Rev. Robert Collier said during a news conference in October 2023.

As people and groups took sides, Comcast Spectacor, which owns the Wells Fargo Center, continued to push for the Sixers to remain at the stadium district with the rest of the city’s professional sports teams.

That April, then-Mayor Jim Kenney announced the city would commission a group of independent studies that would evaluate and analyze the impacts of the proposed arena. And it was later revealed that the Sixers would be bankrolling the effort.

It was a defining moment in the arena saga.

At the time, few elected officials had weighed in on the arena. And until the results of the studies were released, they wouldn’t.

City Councilmember Mark Squilla, whose district included the proposed site, repeatedly told reporters that the impact studies would inform his decision-making, and help guide the legislative process.

Because of councilmanic prerogative, it was up to Squilla to introduce any bills authorizing the arena. Technically, he had the power to block the introduction of arena-related legislation.

“If it comes back and says, ‘Hey, listen, it doesn’t work in this location. The city can’t sustain two arenas of this size’ or whatever comes back and says it just isn’t feasible, then I would say, ‘Yeah.’ I mean, it’s very possible that it wouldn’t be introduced,” said Squilla that July.

A month earlier, the Sixers released the first set of architectural renderings of the 18,500-seat arena.

‘Opportunity’ or ‘killer’

In the end, it took more than a year for the impact studies to be released.

Eight months past its original deadline, the city released a community impact assessment, an economic impact analysis, a design consulting, and a traffic, transportation and parking analysis.

The results were mixed.

The community impact study was unequivocal.

The analysis echoed concerns about traffic congestion and displacement, with consultants writing that the controversial development “could potentially result in the loss of Chinatown’s core identity and regional significance.”

“Although the project will not lead to direct housing displacement, there is evidence for increased displacement of small businesses and low- and fixed-income individuals through gentrification and loss of cultural identity in Chinatown if the 76 Place were built,” researchers concluded.

The economic impact analysis found that the Philadelphia metro could support “multiple professional arenas” and that both arenas would ultimately be “financially viable.” The Wells Fargo Center would likely be negatively impacted by the construction of a new arena, however, when it came to suite revenue generation, naming rights and the loss of Sixers games, consultants found.

The traffic report concluded that the Sixers’ hopes of having 40% of fans travel to the arena via public transportation was “attainable” and that there was “sufficient garage parking” in the vicinity of the arena to meet the expected demand from drivers.

Arena opponents panned the studies while renewing their concerns about the project being a destructive force for Chinatown.

As lawmakers prepared to return from summer recess, Squilla told reporters he wanted to introduce enabling legislation “as soon as possible” to give residents ample time to review them. He had vowed to share copies of the proposed measures with constituents at least 30 days before introduction.

He said he would consult and coordinate with Mayor Cherelle Parker’s administration before getting the ball rolling toward a final decision. To date, Parker had not taken a public stance on the arena, but many expected she would back the project, in part because of her strong political ties to the city’s building trades.

And yet the arena’s future was far from secured.

“Is the project an opportunity or is it a killer? I think we have to look at those things through the studies,” said Squilla.

Dueling tax incentives and a ‘historic agreement’

Roughly a year later, in the fall of 2024, the Sixers were still negotiating with the city over the team’s arena proposal. By then, they had spent millions on public outreach and lobbying.

That September, it came to light that New Jersey was making a play to build an arena for the team in Camden. The team already had its headquarters and practice facility across the river.

In a letter signed by Gov. Phil Murphy and sent to the Sixers from the New Jersey Economic Development Authority, officials stated they were “committed to bringing the 76ers to Camden.”

“We envision a multi-billion dollar, privately-led comprehensive mixed-use development north of the Ben Franklin Bridge that would serve as a transformative catalyst for Camden and New Jersey,” the letter said.

To entice the team, the state offered up to $800 million in tax credits.

The Sixers, who insisted they needed legislative approval by the end of the year, said in a statement that while their priority was building in Center City, they had to “take all potential options seriously, including this one.”

Two weeks later, Parker broke her silence in a pre-recorded video posted to social media.

From her desk on the second floor of City Hall, the mayor announced she was backing the arena and that the city and the team had reached a “historic” agreement that would keep the Sixers in Philly.

“This is an historic agreement,” Parker said. “It is the best financial deal ever entered into by a Philadelphia mayor for a local sports arena. And I wholeheartedly believe it is the right deal for the people of Philadelphia.”

The video came a week after Parker presided over a lively community meeting packed with opponents and supporters of the arena proposal. While she did not take a stance that night, political observers expected her to throw her weight behind the arena given her strong ties to the city’s building trades, the first group to endorse her run for mayor and a major contributor to her campaign.

After the mayor’s announcement, things moved quickly.

A week later, Parker held another community meeting to detail the city’s agreement with the Sixers.

Inside the Pennsylvania Convention Center, she said the team would stay in the city until at least 2061. Under the deal, the team would contribute $50 million for a community benefits agreement and about $6 million a year in PILOTS — payments in lieu of taxes — to the city and its school district.

The agreement also included an economic opportunity plan designed to ensure a diverse workforce, including women and minorities, would benefit from the investment.

If there were any question about where Parker stood on the project before the meeting, there wasn’t afterward.

“Anyone who has any challenges with what is contained in this agreement, you no longer have the Philadelphia 76ers as the villain here. I am Cherelle L. Parker. I am the 100th mayor of the city of Philadelphia. I am proud of and take full responsibility for what is included in this agreement,” said Parker.

Parker told the room her administration would transmit enabling legislation for introduction during City Council’s stated meeting on Oct. 24.

Sixers arena sticking points

During a raucous meeting marked by boos and loud chants for and against the arena,  Councilmember Squilla introduced a package of bills on behalf of the administration that included 11 ordinances and two resolutions.

Part of the package contained zoning and planning approvals. Other measures were related to an existing neighborhood improvement district and financing arrangements tied to the Fashion District mall.

Squilla also introduced two arena-related bills of his own, including two ordinances designed to help protect Chinatown during construction and beyond.

“It’s gonna be a robust dialogue to make sure that the end product is one that represents what the city of Philadelphia looks like demographically and, most importantly, addressing the district councilperson’s issues and concerns,” said Council President Kenyatta Johnson after the meeting.

Before voting, lawmakers would host a string of full-day hearings devoted to the Sixers’ arena proposal and the agreement the team reached with the city. The hearings would also give the public the opportunity to voice their support or opposition for the project.

Most lawmakers had yet to take a stance on the arena, but it appeared Parker and the Sixers had a good chance of getting what they both wanted: the green light for a new arena in Center City.

In mid-November, City Council began hearing testimony from a range of stakeholders, including the Parker administration, the Sixers and SEPTA.

Lawmakers grilled team officials over the course of two hearings, largely focusing on the value of the community benefits agreement and the lack of funding for SEPTA to expand its rail service to accommodate fans before and after games.

Several lawmakers told the team that $50 million was insufficient for a CBA, in part because it did not provide enough funding for safeguards for Chinatown, the closest community to the proposed site.

Council members also chided representatives after they learned the team was still negotiating with SEPTA over the cost of providing additional trains for fans who opted to use the authority’s Regional Rail lines to get home from games.

Amid a financial crisis, SEPTA had announced plans to increase fare prices and make severe service cuts. Officials would later testify the authority could in no way afford to expand service.

“Here we are, we’re ready to figure out what we’re gonna do here, and some of these things really should have been nailed down,” Councilmember Cindy Bass said.

Both issues emerged as sticking points as lawmakers continued to probe the proposal while listening to testimony from proponents and opponents, who each got another chance to make their case.

“We can’t be NIMBYs — not in my backyard people. You don’t get growth that way. You get growth by being bold. And the future always benefits those that are bold,” said Ryan Boyer, business manager for the Philadelphia Building and Construction Trades Council.

John Chin, executive director of the Philadelphia Chinatown Development Corporation, an influential organization in the city’s Chinese community, told council members that neither the enabling legislation nor the city’s broader deal with the Sixers contained nearly enough protections for the neighborhood.

To preserve Chinatown, he said, the neighborhood needed a combination of strong cultural and economic development plans.

“I see none of that,” Chin said. “It’s barely a mitigation plan.”

The saga continues

As the hearings unfolded, lawmakers continued to negotiate with the Sixers behind closed doors over various issues, including the value of the community benefits agreement. During its second hearing, team officials changed course and told council members they’d be willing to add funding.

Time was running out to move the project forward before the end of the year, and it appeared both sides were struggling to reach an agreement, which Johnson wanted to have in hand before calling for a vote.

An initial vote was delayed twice as negotiations stretched on for hours.

“We’re still going through the process of addressing issues and concerns of members and hopefully we’ll wrap this up tomorrow,” Johnson told reporters a day before City Council’s final meeting of 2024.

By the following day, the deal was done.

The vote: 12-4.

The community benefits agreement would now be $60 million instead of $50 million. At one point, City Council had asked for $100 million.

Councilmembers Squilla, Johnson, Katherine Gilmore Richardson, Cindy Bass, Nina Ahmad, Curtis Jones, Brian O’Neill, Quetcy Lozada, Jim Harrity, Michael Driscoll, Anthony Phillips and Isaiah Thomas voted in favor of the arena legislation.

Councilmembers Jamie Gauthier, Rue Landau, Nicolas O’Rourke and Jeffery Young voted against the project.

Johnson said the city would have been “fools” to turn down a proposal with so much potential to provide so much good for Center City.

Arena opponents were outraged, calling it a “disgrace” and a “betrayal.”

“What kind of city is this? Clearly, our council members who voted for this think this is a billionaire playground — that this is a city for the wealthy,” said Mohan Seshadri, executive director of the Asian Pacific Islander Political Alliance.

“This is a bad deal for working-class Philadelphians,” he added.

A week later, on Dec. 19, City Council took a second and final vote on the arena, passing the legislation by a 12-5 vote.

The vote, which came after dozens of arena opponents were forcibly removed from council chambers, was largely expected. The Committee of the Whole, which is composed of all 17 members of City Council, had already advanced the legislation, making it very unlikely that lawmakers would change their minds and derail the project a week later.

Parker signed the bills into law just before Christmas.

The saga was over.

Sixers arena whiplash

Until it wasn’t.

On Sunday, Jan. 12, as the city prepared to watch the Philadelphia Eagles begin their postseason, it came to light that the Sixers had abandoned their plans to build an arena in Center City.

A news conference the next day offered little insight into what happened.

Josh Harris, co-founder of Harris Blitzer Sports and Entertainment, told reporters the Sixers and Comcast had started discussing the new arena in early December after NBA Commissioner Adam Silver helped bring everyone together, and that “we got the mayor involved as soon as we could.”

“We didn’t really change our mind. We were really committed to Market East … but our North Star was to do the right thing by Philly,” Harris said. “We felt we could build a better arena and also revitalize Market East … so we pivoted.”

Comcast CEO Brian Roberts said Monday that NBC becoming a media partner of the NBA was “fortuitous” for the new arena deal.

For now, there are few details about the joint venture in South Philadelphia, which arena opponents celebrated.

The whole process starts over now.

The city will have to wait to see if there’s another plot twist.