Sixers official says team won’t add more money to community benefits agreement, Squilla says they may have to for arena legislation to pass

How can Philadelphians trust that a new 76ers arena won’t require taxpayer dollars? Why won’t the team offer more than $50 million to help mitigate the arena’s impacts? Why won’t the Sixers’ billionaire owners testify in City Council?

These were some of the questions lawmakers asked a pair of 76ers executives Wednesday during a tense five-hour hearing about the team’s plan to build a new arena on East Market Street in time for the 2031-32 NBA season.

Council is slated to vote on the project in just three weeks, and Wednesday was the second of eight days of committee meetings lawmakers are scheduled to hold on the arena before then.

Councilmember Jamie Gauthier told the Sixers’ representatives that a lot of the conversation has centered on the site itself. But she wanted to know why is Market East the preferred location, as opposed to the Navy Yard or some other place?

David Gould, the team’s chief corporate affairs officer, cited several reasons in answering: The team wanted to be in the city. It liked the connection to public transit that building atop Jefferson Station provided. And he said, the team needed a site that was available.

“We know Market East is in need of investment,” he said, describing the area as a deterrent to tourists and noting that the Philadelphia Marriott has shut its Market Street entrance.

Councilmember Jeffery Young Jr. told the Sixers that their lack of communication with Council has been “a slap in the face.” And the refusal to increase the dollars in the community benefits agreement shows, “You don’t want my support.”

Young then asked a question: “Why the rush?”

Why does the project have to be approved in council in December? Why not in January, he asked, if that becomes necessary?

City Council members on Wednesday questioned whether the 76ers’ plan to build a new arena in Center City would truly be cost-free for local taxpayers, as the team has repeatedly claimed.

Councilmember Kendra Brooks noted that the team is planning to avoid paying property and use-and-occupancy taxes by temporarily donating the land under the arena to the city and making payments in lieu of taxes, or PILOTs — a common arrangement for sports facilities that is likely to save team owners’ millions.

The team has negotiated a $6 million per year PILOT with Mayor Cherelle L. Parker’s administration, amounting to $180 million over the course of the 30-year life of the proposed arena deal.

Councilmember Mark Squilla, a key player in the arena debate, told reporters that the project could stall in council if no changes are made to the community benefits agreement.

“I don’t think there right now is enough votes to pass it out of legislation,” he said as the morning session ended.

He was asked if he would go to the Sixers and tell them that the $50 million CBA figure needed to be increased or the project could fail.

David Gould, the Sixers' chief corporate affairs officer, said the team would not add more money to the $50 million community benefits agreement that has been negotiated with the city.

The figure was based on the economics of the project, he said, adding that he supposed the team perhaps should have offered a smaller figure and then negotiated its way to $50 million.

"Potentially shame on us for not starting low and negotiating up,” Gould said.

Several City Council members on Wednesday grilled representatives for the 76ers testifying about the team’s Center City arena plan with questions about the team’s ownership and corporate structure.

Councilmember Cindy Bass asked why none of the team’s owners appeared at the hearing, which featured testimony from chief corporate affairs officer David Gould and senior vice president Alex Kafenbaum. Bass made her point by asking a rhetorical question about who came up with the plan to build a new arena on East Market Street.

"I’m suspecting that it’s the owners of the Philadelphia 76ers, none of whom felt the need to come and discuss their vision of the concept today which is quite inappropriate and disrespectful,” Bass said. “if you have something that you’re trying to get done, you’ve got to show up.”

Sixers officials told Council they were well aware that in 2026, when demolition for the arena is scheduled to begin at the Fashion District mall, the city will be celebrating the nation’s 250th birthday, the Semiquincentennial.

“We’re very mindful of being sure we’re not disruptive to 2026,” David Gould, the Sixers' chief corporate affairs officer, told council. Demolition would start on the interior of the former Gallery mall, he said, dissimilar from the public demolition that brought down Veterans Stadium in 2004.

People who live near the site at 10th and Market Streets have raised concerns about health and air quality during demolition, and businesses have worried they could lose customers.

David Gould, the Sixers' chief corporate affairs officer, began Wednesday's hearing by touting the arena proposal as a major economic opportunity for Philadelphia that wouldn't cost city taxpayers anything.

"The 76ers want to be in Philadelphia, our home for more than six decades," Gould said. "We never expected a rubberstamp approval, and as we will detail we already made a number of important changes in response to feedback we have received."

Gould said the team is committed to ensuring that the project's workforce reflects the diversity of the city and said the arena would be the city's first sports facility designed with public transit in mind.

City Councilmember Jamie Gauthier issued a statement Tuesday night saying she “cannot deny that my working-class, Black and brown constituents would benefit immensely from family-sustaining jobs and lucrative contracting opportunities” created by the arena.

“But I also represent a large constituency that rightly sees Chinatown, the Gayborhood, and Washington Square West as irreplaceable havens for vulnerable communities in Philadelphia – including my constituents,” she said. “If we allow this arena to move forward without doing much, much more to protect impacted communities, I worry we will be on the wrong side of history.”

Issues including potential, additional costs to SEPTA and the community benefits agreement that was negotiated between the city and the team must be addressed before council votes on the proposal, she said.

The Council witness list for the Sixers consists of two people, as testimony kicks off for the day:

Alex Kafenbaum, senior vice president and head of development for Harris Blitzer Sports & Entertainment, which owns the team. And David Gould, chief corporate affairs officer of HBSE.

Gould has been out front in promoting the arena, which was first announced by the team in July 2022.

City Council is expected to resume hearings on the proposed 76ers area in Center City at 11 a.m. Wednesday.

The hearing will be streamed live on City Council's website.

Officials from the Sixers are expected to testify about the $1.55 billion project Wednesday.

On the first day of Philadelphia City Council’s high-profile hearings on the 76ers’ arena proposal, lawmakers raised concerns about the project’s potential impact on SEPTA, whether the $50 million community benefits agreement negotiated by Mayor Cherelle L. Parker was sufficient, and why some city leaders appeared to be rushing to approve the proposal by the end of the year.

Tuesday’s six-hour meeting of Council’s Committee of the Whole — which includes all 17 city lawmakers — was the first of eight scheduled days of hearings on the $1.3 billion plan, and it featured testimony from top members of the Parker administration.

If the arena project is to be approved by the end of the year — as the 76ers have requested and as Parker is aiming for ― lawmakers would have to vote it out of committee in just three weeks. Although the proposal was first announced two and a half years ago, the legislation Council needed to approve it was not introduced by Councilmember Mark Squilla until Oct. 24, leading to a compressed timeline for it to be approved by the team’s December deadline.