The proposed 76ers arena in Center City threatens to dramatically destabilize Chinatown's economic and cultural fabric, leaving businesses and residents with inadequate lifelines to survive the impacts of the the project in its current form, neighborhood advocates told City Council on Tuesday during the third day of hearings on the team's $1.3 billion development plan.
Chinatown leaders and business owners, labor unions, academic experts and SEPTA officials gave testimony on their concerns about the arena, its logistics and how it will affect the area. The project would replace a portion of the Fashion District mall on Market Street between 10th and 11th streets, just south of Chinatown, and would rely heavily on fans using public transportation to limit gridlock in Center City.
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"Chinatown's future has never been more vulnerable in my lifetime," John Chin, executive director of the Philadelphia Chinatown Development Corp., told council members. "This arena will push Chinatown toward the precipice."
Chin and other Chinatown leaders said the neighborhood is home to about 8,000 residents and attracts thousands more visitors each day at its restaurants and cultural institutions. The city's community impact study released in August projected about 50% of Chinatown's 300 businesses would be negatively impacted by the arena, both during its construction phase and after it opens. The study also noted that Chinatown will face economic pressures from gentrification with or without the arena.
Opponents of the arena project called it shortsighted and harmful, describing how it will disrupt a delicate balance that sustains Chinatown. The neighborhood relies on having a sturdy small business sector, a growing residential base and a network of mostly nonprofit cultural centers that create community. All of these pillars can be weakened by large-scale developments, including those clearly intended to benefit Chinatown.
Chin talked about how even the Chinatown Stitch — a federally supported project that will build a cap over a portion of the Vine Street Expressway, reconnecting areas divided by the highway — poses challenges that require careful planning to protect the existing community.
"Our very own project to improve the conditions of Chinatown will cause gentrification," Chin said. "Out of this project, we have set aside foundation funding to help us figure out how to achieve equity with this project and how to not displace people."
Chin and other Chinatown advocates said the 76ers have not followed a similar planning process. They argue the $50 million community benefits agreement is about half the amount it should be and doesn't provide nearly enough support — or the right kind — specifically to Chinatown businesses and residents.
"It doesn't resemble any of the conversations we have had about Chinatown's need for protection," said Chin, who claimed his organization hasn't heard from the 76ers since March.
Councilmember Mark Squilla (D-1st), who sponsored the arena legislation because it falls in his district, testified that he agrees the current CBA is insufficient. He said negotiations are ongoing with the 76ers to increase funding for the CBA and modify its programs.
"We believe that there needs to be more in order to move forward," Squilla said.
At a meeting in Chinatown on Monday night, Squilla told community members he does not expect the arena legislation to come to a vote until next year. The 76ers have pushed for timely passage to adhere to a timeline that would have the arena finished in 2031, when their lease at the Wells Fargo Center expires.
Chin testified that if the arena does move forward, he would like to see the CBA provide dedicated funding for community and commercial land trusts, which would ensure Chinatown's long-term preservation.
"It allows second- and third-generation families who don't want to be in the business that their parents or grandparents were in to be able to sell their property so that the land trust can acquire it, and that land trust can implement rules and regulations to preserve affordability, the type of use, and the type of alignment of what we see in Chinatown," Chin said.
Union leaders tout arena as investment in workforce
Members of local labor unions testified Tuesday that building a new arena will create 9,000 construction jobs and up to 3,000 long-term employment opportunities for the venue's operations. They also argued the project is critical to the revitalization of East Market Street, a former commercial powerhouse now lined with empty storefronts.
"It's a signal that Philadelphia is open for business and large-scale investments," said Layla Bibi, council representative for the Eastern Atlantic States Regional Council of Carpenters.
Ryan Boyer, business manager for the Philadelphia Building and Construction Trades Council, said the city can't afford to pass up the 76ers' proposal — which would be mostly funded privately — and neither can Chinatown. He urged the city to be bold about growth and argued that many of the questions surrounding whether SEPTA can manage the demands of an arena can be answered during the intervening years of construction.
"What signal does it send to all capital if we turn away ($1.3 billion) in private capital?" Boyer asked council members "We can argue about the $50 million CBA all we want, but the reality is, if this doesn't happen, there will be no CBA and the gentrification will happen in Chinatown. ... The problems that Chinatown have are real, but we can walk and chew gum at the same time."
Union officials also called the arena a vital investment in building a workforce that represents communities of color, offering apprenticeship programs that will prime the next generation of laborers during the timeframe leading up to and through construction.
"Whatever the trade, we can have people complete their whole apprenticeship in one facility," said Elaine McGuire, member services representative for the International Brotherhood of Electrical Workers Local 98.
The arena's critics testified that job creation isn't a justification for the Sixers' project compared to any other potential investment at the same site.
Domenic Vitiello, an associate professor of regional planning and development at the University of Pennsylvania, warned council members that arenas rarely live up to their billing. He said numerous cities have learned the hard way that building arenas in their downtown districts creates "dead zones" on non-game days and doesn't generate the tax revenue projections promised by flawed economic impact studies.
"There are other, much better ways to get many more jobs in construction on East Market Street, in South Philadelphia and elsewhere," Vitiello said.
During Chin's testimony, Councilmember Katherine Gilmore Richardson (D-At-large) asked him what kind of project he would hope to see as an alternative to the arena at the Fashion District site.
"If you give me ($1.3 billion), I propose mixed-income housing that addresses poverty, a social service center that addresses poverty and a small business incubator that lifts residents out of poverty," Chin said. "I don't have the resources, but (that money) can be better spent and construction jobs will still be there."
When Council President Kenyatta Johnson (D-2nd) asked union officials whether a different location for a new arena would change their support for the project, Boyer and McGuire both said Philadelphia would stand to lose the most by not having it built on Market Street where investment is most needed.
SEPTA 'cannot shoulder burden' of added transit costs
Tuesday's hearing included testimony from SEPTA officials about the challenges they anticipate would come with the construction and operation of a new arena atop Jefferson Station in Center City. At least 40% of fans would need to use SEPTA and PATCO service to the arena to avoid creating unmanageable traffic congestion in Center City. The required transit split is higher than the 10-20% of fans who use public transit to get to the facilities at the Sports Complex in South Philadelphia.
In addition to the technical challenges of building an arena on top of an active rail hub, SEPTA officials project that they will need to add significant service to Jefferson Station to handle the influx of riders and have trains available every 30 minutes on event nights.
"The reality is that SEPTA simply cannot assume these new costs within the framework of its operating budget," SEPTA interim General Manager Scott Sauer said.
In the absence of new state funding for public transportation, SEPTA is facing yearly budget deficits of $240 million — a threat officials said could trigger severe service cuts in the years ahead. SEPTA last week proposed a steep fare increase that would take effect in the new year.
In an impact assessment released Tuesday, SEPTA officials said they expect the arena would require an estimated $32 million in infrastructure upgrades to Jefferson Station. SEPTA also would need to put 20 more Regional Rail cars and five more buses in service on game nights at the arena, which is estimated to cost between $20 million and $25 million per year. Those figures include increased revenue projections from the proposed fare hike and about $2.3 million in annual revenue that would be generated by arena-related service.
"We do not think we can get that (40% transit split) without adding service," SEPTA Chief of Staff Liz Smith said, adding that the arena would never be "a money-making endeavor" for SEPTA.
Still, SEPTA is optimistic that the 40% target is achievable because an arena in Center City would offer a direct connection for suburban fans who use Regional Rail. At the Sports Complex, taking public transit requires people from the suburbs to get a train to Center City and then a subway to South Philadelphia.
At a hearing last week, Squilla said the 76ers have committed to covering infrastructure costs at Jefferson Station. Those projects would require federal approval because of Jefferson Station's role as a regional transportation hub.
How SEPTA would fund added service remains unknown. SEPTA has been in negotiations with the 76ers about support for more service, but officials said they were not publicly making a request for funding. Even if SEPTA were to receive full funding from the state, it would not be enough to cover the budget to increase service for the arena.
"We will take that subsidy from wherever we can find it," Smith said.
SEPTA officials declined to take a position on the arena. They acknowledged that the project could have a transformative impact on Center City, but said its success will depend on having a public transportation system capable of meeting considerable new demands.
"Service must be robust and attractive enough that it will become a preferred option for getting to and from the arena – that is, fans will choose to leave their cars at home," Smith said. "It must be safe, reliable, frequent, and easy to access."