December 03, 2024
Provided Image/Gensler
City Council's hearings on the 76ers' arena proposal in Center City are entering a crucial stage for the project to gain approval by the end of the year, a timeline the team has urged for legislation to be passed.
Members of City Council declined to hold a vote Tuesday afternoon that will be necessary to take the next steps in their consideration of the 76ers' proposed arena in Center City. Progress on the legislative package has been held up by negotiations surrounding the team's proposed $50 million community benefits agreement, an investment far below what some lawmakers believe is warranted.
Tuesday was the last of eight planned hearings that began Nov. 12 to assess the team's $1.3 billion arena plan, which would replace a portion of the Fashion District mall on East Market Street. Testimony in recent weeks has covered its impacts on Chinatown along with the logistical and financial demands a Center City arena would place on SEPTA.
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It was expected that City Council would vote Tuesday to move the bulk of the arena legislation out of the committee of the whole, a step that's required before the project can be put to a final vote.
"The goal was to pass it out with enough votes and get enough information into the CBA that we could work with our council members to see if that would be good enough to bring it up for a vote," said Councilmember Mark Squilla, whose 1st District covers the proposed arena site. "But we don't have that information today, so it's back to the negotiating table with the council president and the 76ers."
Another hearing has been scheduled for Thursday morning, but Squilla said he's unsure whether the vote will be held at that time. City Council is entering the final weeks of this year's session, setting up a potential scenario that pushes consideration of the arena into next year in the absence of a final vote on the project.
Representatives from the 76ers were questioned Tuesday about how the team is revising its proposed CBA in response to the feedback given over the past few weeks. Lawmakers have consistently voiced concerns that the team's CBA does not go far enough to offset anticipated business disruption in Chinatown and guarantee that workforce diversity commitments for the arena are met.
Councilmember Jim Harrity (D-At-large), who has been favorable toward the project, said Tuesday that the 76ers must dedicate more than the CBA's proposed $1.6 million for a business disruption fund in Chinatown. Harrity argued that the fund should be increased to $7.5 million based on the city's community impact study, which estimates about half of Chinatown businesses will face negative impacts from the arena.
"The business disruption fund is nowhere near enough," Harrity said.
At-large Councilmembers Kendra Brooks and Nicolas O'Rourke, both of the Working Families Party, said they would prefer to see the CBA land in the range of $300 million. They noted that a significantly higher investment from the team would make up for property taxes that the city and school district are forgoing as a result of the plan to lease the arena site to the 76ers for $6 million per year over 30 years.
David Gould, chief corporate affairs officer for 76ers owner Harris Blitzer Sports & Entertainment, testified that the arena would be "economically non-viable" if the team committed $300 million to a CBA.
Squilla said passing the legislative package out of committee likely will require the team to agree on a larger CBA investment.
"We understand that they have had a stance of $50 million was their CBA limit ... and we have a stance that it has to be more than that in order for this to potentially get voted on," Squilla said. "They have to come up with additional dollars in the CBA. ... I would think there is a number that I would rather not say, but there is a number that I think would be sufficient to at least bring it up for a vote."
Squilla said the 76ers have been made aware of this number. 76ers spokesperson Molly McEndy acknowledged Tuesday afternoon that the need to finalize specifics of the CBA was a key takeaway from the hearing.
Team officials also were asked Tuesday whether they had made progress in developing a clearer plan to support SEPTA, whose long-term funding challenges have been a central part of the arena hearings.
The 76ers have committed to paying for infrastructure upgrades at SEPTA's Jefferson Station and ensuring that the transit hub stays open throughout the arena's construction phase. It remains unknown who would pay for up to $25 million in annual operating costs SEPTA estimates it would need to increase service through Center City on event nights.
76ers officials testified Tuesday that the team continues to hold weekly talks with SEPTA to discuss feasibility issues related to the arena. Mayor Cherelle Parker's administration — which has already backed the arena — said they also are working on a revised transportation impact study that could take a month or more to complete.
Transportation experts have said the arena plan hinges on at least 40% of fans consistently using public transportation to avoid significant gridlock in Center City on event nights.
"We feel very confident that if we can hit these mode share numbers, this is going to be pretty straightforward," Michael Carroll, deputy managing director of the city's Office of Transportation and Infrastructure Systems, testified Tuesday.
Carroll also acknowledged that if this target can't be reached, traffic sensitivity tests in Center City demonstrate that the arena would create heavy congestion.
Councilmember Rue Landau (D-At-large) expressed frustration that the 76ers have not given council members answers to core questions that have repeatedly been brought up over the last few weeks of hearings.
"I'm a little stunned that you're coming back without answers to our questions," Landau said.
Last week, Landau and Councilmember Jamie Gauthier (D-3rd) voted against two other pieces of arena legislation that made it out of committee. Both cited "too many unanswered questions and significant unaddressed concerns" to feel comfortable advancing the proposal.
During Tuesday's hearing, Landau criticized the team's rush for approval of the project and the urgency they have conveyed to lawmakers about the need to stay on a schedule to open the arena in 2031.
"This timeline is not fair. It is not respectful. It is wrong," Landau said. "And we want answers to our questions."
