City Council held the first of eight days of hearings to listen to testimony and debate legislation for the proposed 76ers arena in Center City. The contentious project on East Market Street already has won key backing from Mayor Cherelle Parker's administration, but it will need to gain approval from City Council before moving forward.
Tuesday's hearing was intended to give the Parker administration the chance to make its case about the arena's economic benefits, feasibility and benchmarks, and what the city will do to invest in surrounding communities. One of the main concerns council members raised was about the demands the arena will place on SEPTA, both in terms of construction that will disrupt Jefferson Station and the need for increased service in Center City on event nights.
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"The time to respond to these challenges in a holistic and strategic way is now," Tiffany Thurman, Parker's chief of staff, told the council during her opening testimony.
Thurman was joined by City Solicitor Renee Garcia and Mike Carroll, the deputy managing director of the Office of Transportation and Infrastructure Systems, to answer questions from council members about the city's negotiations with the 76ers.
The team has pledged to privately finance the roughly $1.3 billion project between 10th and 11th streets, just south of Chinatown, and provide an additional $50 million for a community benefits agreement (CBA) supporting small businesses, residents and services needed around the arena over a 30-year period.
Council members stressed the financial strain SEPTA currently faces, including doubts about whether state funding will be approved to close a $240 million budget deficit that could result in severe service cuts in the years to come. On Tuesday morning, SEPTA proposed steep fare increases and warned about the looming impact of its financial problems.
Councilmember Jamie Gauthier (D-3rd) said an estimated $30 million will be required to upgrade infrastructure at Jefferson Station for the proposed arena, which would sit above the station that will serve as the main public transportation hub for the development on the site that's currently part of the Fashion District Philadelphia mall. Gauthier and other council members pressed the Parker administration to disclose its financial expectations of SEPTA.
"That's not something the administration will cover," Carroll said of the upgrades at Jefferson Station, claiming the team has willingly accepted those costs. "That responsibility is going to be the subject of conversations between SEPTA and the Sixers."
The more pressing financial challenge for SEPTA will be ramping up express service in Center City at night. The city's traffic impact study on the arena forecasts at least 40% of fans will need to take public transit for Center City to manage anticipated congestion. At Jefferson Station, trains currently run about once every one or two hours in the evenings, and Sixers games typically let out between 9-10 p.m. That frequency would need to be increased to about one train every 15 to 30 minutes, a level of service that SEPTA's estimates say could cost about $20 million as an initial investment when the arena opens.
"Per the deal, (the 76ers) have to pay for all infrastructure, not necessarily increased service," said Councilmember Mark Squilla (D-1st), who sponsored the 76ers arena legislation because the proposed site is in his district.
The Parker administration still has not provided council members with detailed plans from negotiations between SEPTA and the 76ers. Several council members asked whether that information would be available before a final vote is expected on the arena.
The earliest City Council could vote to approve the arena will be in December. Dec. 12 is the council's final session of the year.
"I don't believe we can sit back and say, 'SEPTA and Sixers, work things out,'" said Councilmember Cindy Bass (D-8th).
SEPTA and the 76ers did not immediately respond to requests for comment about their ongoing negotiations. SEPTA officials are expected to speak at a hearing next week.
Squilla testified that the city intentionally maintained a higher level of matching funds for SEPTA in its budget this year after the state failed to pass a funding increase for public transportation that Pennsylvania Gov. Josh Shapiro had proposed in August. Despite the lack of clarity about funding for more SEPTA service, Squilla said he thought it was "not necessary" for the arena legislation to spell that out while the team's negotiations with SEPTA continue.
"We recognize the fact that the service needs to be there," Squilla said. "People can't ride trains if they don't exist."
Councilmember Rue Landau (D-At-Large) said the unanswered questions about SEPTA funding and other aspects of the arena are worrisome. Landau served in former Mayor Jim Kenney’s administration during President-elect Donald Trump’s first administration, a time when she said many funding streams were cut.
“I feel very uneasy about the amount of question marks we have here about who’s paying for what — and what the full picture is," Landau said. "It’s very concerning to be asked to do something now when there are still so many question marks about who’s paying for what in the future."
The Parker administration cautioned against a rush to judgment about what SEPTA's finances could look like by the time the arena's construction would be complete in 2031.
"That's what SEPTA is working on, making sure that they have capacity for folks who are going to and from the suburbs to attend events," Carroll said. "And that's where most of the work will be focused. We're supportive of that work."
Save Chinatown Coalition rallies outside
Ahead of Tuesday's hearing at City Hall, members of the Save Chinatown Coalition gathered outside to hold a "people's hearing" about the proposed arena. Organizers said they were frustrated by City Council's schedule for the arena hearings and wanted a forum to voice objections to the project before next week's public testimony begins.
"(City Council) has cleared their schedule on a timeline that suits the billionaires — not Philadelphians," said Seth Anderson-Oberman, executive director of Reclaim Philly. "Philly knows this is a bad deal for everyone other than the billionaires who own the Sixers (and are) holding taxpayer time and money hostage to rush the arena through on their made-up timeline."
The Save Chinatown Coalition has cast the arena as an unpopular project that will be detrimental to small businesses and residents, causing the community to suffer in the shadow of a project that doesn't serve it. At their meeting on Tuesday morning, coalition leaders talked about the importance of the city investing in affordable housing, schools and programs that will promote sustainable job creation.
For more than a year, the Save Chinatown Coalition has claimed the Parker administration won't meet with them to talk about their concerns with the arena. Thurman, Parker's chief of staff, gave testimony Tuesday that included a list of dates the Parker administration said it met with stakeholders from Chinatown — including the coalition — and civic groups from other neighborhoods.
Several members of City Council indicated that they plan to grill both the Parker administration and the 76ers about their commitments to the communities impacted by the arena. Several members have expressed skepticism about the project and have said they will need to be convinced to vote for it.
Parker's staff was pressed to answer questions Tuesday about the breakdown of the team's CBA and an arena oversight committee that will bind the 76ers to uphold their labor obligations to hire a diverse workforce — both during construction and with the operation of the arena. Council President Kenyatta Johnson (D-2nd) said the city needs to ensure the team makes a "good faith effort" to meet its diversity benchmarks and ensure they are more inclusive and detailed than they have been for past development projects.
"Often times, we put out (requests for proposals) for contractors to come do work, and my understanding is that sometimes, folks will call back and say, 'We can't find anyone to do that type of work," Council President Johnson said of the challenge of finding minority contractors.
Councilmember Isaiah Thomas (D-At Large) suggested not enough money is being set aside for small business disruption during the four-year period of the arena's construction. He said the $1.4 million figure for Chinatown businesses appears low, especially compared with larger commitments that have been made in years past for communities affected by highway construction projects.
The Parker administration has said it expects a new arena to generate more than $700 million in tax revenue for the city over 30 years, in addition to as much as $300 million for the School District of Philadelphia. The city said the team and city also plan to spur major residential and retail development along Market Street, adding nearly 1,000 new housing units and revitalizing a commercial corridor that has dried up in recent decades.
"We have the opportunity to reimagine Market East to suit our modern-day needs," Thurman said.
The 76ers will present their plans during a hearing Wednesday, followed by three sessions for public testimony next week. Another round of hearings will cover details of the legislative package and offer a final opportunity for the public to express concerns about the project.