Long-Awaited Arena Studies Say 76 Place Could Boost Economy But Speed Up Chinatown Gentrification

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

But not all findings in a series of consultant studies released Monday night were glowing — or even conclusive — in regards to the arena's impact.

The city commissioned consultants to review the 18,500-seat arena proposal last July, focusing on impacts to the area ranging from Spring Garden Street to South Street from north to south and Broad Street to Sixth Street from west to east.

More than a year later, Philadelphia officials posted the results of months of data collection, deep dives into 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 that projects decades into the future, a parking and traffic report, and a design review report.

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

Key findings from the community impact analysis, for instance, indicate that placing the arena on 10th and Market streets just a few blocks from historic Chinatown could cause “indirect displacement,” of some residents there. Though construction of 76 Place would not remove any housing and developers have proposed adding some affordable units, its presence could have a spillover effect if area rents spike, booting out low-income locals.

On the other hand, the studies found that two major arenas are financially viable for the city, contradicting Comcast Spectacor's commissioned study issued earlier this month. That study argued only Los Angeles and New York can support two arenas.

Both Comcast Spectacor, which owns the 76ers' current home at Wells Fargo Center, and 76 DevCo, the development group behind a new Center City arena, made separate cases for and against a second big arena venue over the past month, reaching very different conclusions.

The city's own overview falls somewhere in the middle, revealing a new arena would not quite pack the economic punch 76 DevCorp had projected, while also contradicting Comcast Spectacor's claim that a second arena would lead to only a handful of additional events in the city.

Highlights of the city analyses include:

• 76Place could add 1,780 direct full-time jobs to Pennsylvania. 76 DevCo's own study, obtained by Bisnow, shows its consultant projected 10,100 direct full-time jobs, some 9,100 from construction of the project alone.
• The arena could add $1.05B in net tax benefits to the city, its school districts and the state. The 76 DevCo-linked study said the cumulative net tax benefits of a new arena would be $1.5B.
• About $1.9B could be added to the economy overall within 30 years if an arena project moves forward. 76 DevCo's study says the impact could be more than $2.3B.
• 76 Place could host an estimated 150 events per year. The study projects an additional 53 entertainment events like concerts per year. The study paid for by Comcast Spectacor projected a new arena would bring in only an additional eight to 12 events annually.
• About 1 in 5 of the 380 small businesses in Chinatown could see a positive net economic benefit from a neighboring arena, primarily those working in entertainment, food, and hotel services. However, half of all Chinatown’s businesses would likely receive zero net economic benefit from a new arena, and 30.1% would see varied or limited economic benefit.
• 76DevCo's study assumes 40% of all event-goers would travel by public transportation directly to the arena. However, the city-commissioned studies state that is "not a foregone conclusion," noting careful scheduling with SEPTA and PATCO would have to happen first. To hit the 40% mark, all tickets would need to include a free public transportation pass, consultants for the city said.
• 76 Place developers would need to be wary of easing potential gridlock during events, coordinating traffic measures for Interstate 676 exits, adding parking on the 900 block of Chestnut Street for ride-share cars awaiting passengers and other measures.
• The arena's presence could increase panhandling activity and lead to a larger homeless population in the area, potentially negatively impacting the perceived safety of nearby streets.
• Since the arena project calls for demolishing part of the Fashion District mall, the mall would see its tax benefits district scaled back.
• A second arena would likely have limited or no impact on Wells Fargo Center’s hockey attendance or ticket pricing for NHL games.
• The Wells Fargo Center could take a financial hit, especially in terms of suite revenue generation, which could mean a 15% to 25% decrease in revenue. Suite prices would be decreased for both arenas.

In terms of the gentrification of Chinatown, city planners have noted that with or without an arena, the neighborhood is at risk. The area's heritage of Asian and Pacific Islander residents is on the decline as rents and the price of homes have risen in recent years.

The city-commissioned studies indicate that 76 Place would likely most impact senior citizen residents, who might leave if the arena goes up and local haunts disappear.

“Actually, if the arena was built here, the seniors might just choose to move out of Chinatown since we are concerned about the uncertainty of Chinatown growth,” an unnamed resident said, according to a translated statement in the study.

Comcast Spectacor and the 76 DevCo representatives told Bisnow they are independently reviewing the city’s study and comparing it to their own.

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

“We believe that the best outcome for fans and the community is that the 76ers and Comcast Spectacor 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 been clear that we’re open to building a new arena together at the right time.”

76 DevCo said the studies show the viability of plans they have put forward all along.

“The arena is an appropriate use for Center City and will generate significant new jobs and tax revenue because Philadelphia can support two arenas,”  a spokeswoman said in an email. “Our parking and traffic assumptions are achievable and these findings are more evidence that 76Place can be developed in a way that protects our neighbors and maximizes benefit to Philadelphia.”

Now, stakeholders will review and decide whether the project moves forward as planned. Councilmember Mark Squilla, whose district includes Chinatown and the proposed arena site, has previously said the public will have the chance to review the studies for 30 days before any legislation on its fate is introduced.

Squilla will have an outsized say in any vote thanks to the Philadelphia tradition of councilmanic prerogative, which gives near total deference in land use decisions to the member whose district includes that land.

Developers of 76 Place have said they would need to start construction by 2026.