Plenty Of Hoops Ahead For 76ers' Proposed Center City Arena Project
The Philadelphia 76ers’ proposal for a new $1.3B arena in Center City has the whole city talking, but with at least four years until physical work begins, talking is the development team’s main job for now.
Harris-Blitzer Sports Entertainment, the majority ownership group for the 76ers, formed the company 76 Devcorp to handle pre-development and development of the arena, naming local billionaire investor and Campus Apartments CEO David Adelman to lead the new venture.
Though 76 Devcorp secured agreements with owners of properties central to the proposal before making the initial announcement in late July, it will need entitlements to city streets and some level of buy-in from local officials and stakeholders to secure whatever permissions it winds up needing.
The plan, given the working title of 76 Place, centers on the block of Market Street between 10th and 11th streets, where the western third of downtown mall Fashion District Philadelphia opened in late 2019. The mall’s developer, PREIT, ceded control to equity partner Macerich in exchange for help paying down a loan on the property, which was 80% leased as of June 30.
In a list of responses to emailed questions, Adelman declined to elaborate on 76 Devcorp’s deal with Macerich beyond saying the two companies will be “partnering closely.”
While Macerich CEO Tom O’Hern has echoed Adelman’s comments in his public statements about the project, he said on the company’s second-quarter earnings call that he expects to close on some formal agreement with HBSE and 76 Devcorp at some point next year, though he cautioned that the project is “not a done deal.”
Macerich tentatively plans to move the tenants in the to-be-demolished portion of Fashion District, including an AMC movie theater and a Round 1 arcade and bowling alley, to the remaining two-thirds of the mall, O’Hern said. Representatives from PREIT declined to comment, referring inquiries to Macerich.
The plan for 76 Place also includes taking over a Greyhound bus depot owned by a New York investor, which Adelman told the Philadelphia Inquirer is under contract. Beyond that, the plan includes a vision to close a block of Filbert Street to cars and turn it into a covered pedestrian arcade, which would require multiple types of city approval. That could activate the outside of Reading Terminal, the popular, historic food hall.
Beyond changing the streetscape and coordinating the relocation of a key transportation terminal, for which Greyhound has called on the city for help, the Sixers will need other forms of cooperation from the Philadelphia City Council and the next mayor once Jim Kenney’s term ends in January 2024.
76 Place is promised to be privately funded, but a pro basketball arena with plans to host events on most off nights almost certainly will need some form of city-level legislation to proceed, Philadelphia Department of Licenses and Inspections spokesperson Karen Guss told Bisnow.
“It’s just too early on in the process to have a handle on the specifics,” Guss said in an email. “At this point, the City’s focus is that for the project to move forward, it is imperative that the development team ensure that it works for the surrounding communities that would be affected by the new arena.”
The exact nature of the community engagement process 76 Devcorp will need to go through has only begun to be considered but promises to be fraught with challenges.
The history of urban sports stadiums and their construction is littered with examples of displaced neighborhoods of color, and the 76ers proposal borders Philly’s Chinatown to the north.
Heavily affected by the mid-20th century construction of the Vine Street Expressway, Chinatown residents have begun mobilizing and organizing to represent their own interests. Some have positioned themselves as opposed to any arena plan based on that history.
“We are committed to partnering with the surrounding neighborhoods so that they can reap the benefits of the arena development,” Adelman told Bisnow. “We know that only happens if we are intentional about it and if it's done in partnership with the community, two things we are committed to.”
A frequently asked questions page on the promotional website for 76 Place says the proposal will not displace any homes in Chinatown, and the arena’s proposed footprint doesn't cover any residences.
Adelman and other advocates for the arena say the increased foot traffic and entertainment will be a boon for Chinatown businesses. But opponents fear the downsides of that type of foot traffic, as well as the potential for real estate investors to pressure sales as the neighborhood’s land value increases, WHYY reports.
The team behind the arena may be motivated to find its own place for monetary reasons, as its lease at the Wells Fargo Center precludes it from controlling the destiny of the surrounding land, but HBSE co-owner Josh Harris’ recent history suggests the 76ers could take a community-oriented approach.
This January, Harris invested $10M in Mosaic Development Partners, which has used that capital to compete for larger and larger projects while making standard-setting commitments to racial and gender equity at the development and community levels.
Because of Chinatown’s history, ethnic makeup, density and proximity to the Market Street corridor, which Fashion District failed to galvanize at the pedestrian level, the concerns specific to 76 Place don’t resemble debates surrounding large-scale developments in more residential areas of the city.
That makes it hard to predict what concessions community groups will seek, much less be able to get; for that matter, it remains to be seen how 76 Devcorp navigates relationships with the many advocacy groups active in Chinatown.
“Communities are not homogeneous and there is rarely, if ever, 100% agreement on anything, but as we educate people about the project and incorporate community feedback into our plans and a Community Benefits Agreement, we’re optimistic we can make this a win for everyone,” Adelman said.
