SEPTA, community benefits funding, and a rush to approve: City Council members raise concerns about the 76ers’ arena proposal

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 2½ 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 approval by the team’s December deadline.

» READ MORE: Sixers officials expected to testify at second day of City Council hearings on proposed arena

The team plans to open the arena before the 2031-32 season. The facility would sit between Market and Filbert Streets and 10th and 11th Streets.

Parker has pitched the project as a transformative opportunity that could provide thousands of jobs and revitalize East Market Street. But all major neighborhood groups that border the project, including those in Chinatown and the Washington Square West Civic Association, have come out against it.

Here are some key takeaways from the first day of hearings.

The 76ers have pledged to contribute $50 million to a community benefits agreements since shortly after the team unveiled the proposal in the summer of 2022, when Mayor Jim Kenney was still in office. Councilmember Jeffery “Jay” Young Jr. asked the members of Parker’s team whether they attempted to get more money from the team after she took office in January.

“When we got here on day one — Jan. 1 — $50 million was negotiated in the CBA, and what we wanted to ensure is that we stretched that,” said Tiffany W. Thurman, Parker’s chief of staff.

Young, who opposes the arena, said that he believed the scale of the arena project would warrant a $300 million community benefits agreement. He argued that estimates of the project’s positive impact on tax revenues are likely inflated, as experts have said similar economic impact studies almost always are.

» READ MORE: A new Sixers arena could come with $50 million in community benefits. Critics ask who would gain.

In one of the more tense exchanges of the daylong hearing, Young challenged Thurman on why the administration didn’t seek more, rather than accepting the community benefits proposed during the previous administration.

“I understand it’s the best deal that you probably could negotiate … but it’s still a bad deal for the city,” Young said.

Thurman said the city considered a variety of positive impacts that could come from the arena, including increased tax revenues, and didn’t focus solely on the price tag of the CBA. She emphasized that the team is not seeking a city subsidy, meaning any positive financial impacts for the city would be net benefits, and shot back at critics of the deal.

“Since we got here, even before we reached a deal,” Thurman said, “these same people that have said that this was a bad deal. They were saying it then before we came to a deal, and they’re saying it now.”

After the hearing, Thurman said the administration wasn’t opposed to seeing an increase in community benefits funding.

“We’ll never say no to additional funding to help us support and advance what our priorities are,” she said.

Several Council members on Tuesday expressed concerns about costs that SEPTA may incur due to the construction and operation of the 76ers’ proposed arena.

Michael Carroll, the city’s deputy managing director for transportation and infrastructure, reassured lawmakers that city taxes will not be used for any costs related to the arena’s impact on SEPTA operations.

“That’s not something the administration would contemplate,” Carroll said. “That responsibility is going to be the subject of conversation between SEPTA and the Sixers.”

But some members said they wanted further reassurances that SEPTA, which is facing a serious funding crisis, will be held harmless in the deal — not just the city.

Councilmembers Jamie Gauthier and Isaiah Thomas said lawmakers should have an exact cost estimate from SEPTA on its potential liabilities before voting on the project. Councilmember Cindy Bass said she met with SEPTA officials Tuesday morning and came away concerned about how the project could affect the struggling transit system.

“They’re not paying for these costs,” Bass said. “They’re not going to do it.”

Administration officials said the 76ers are responsible for paying for physical changes to Jefferson Station related to the construction of the arena. But the team and the transit agency are negotiating over how much the team might need to pay for impacts on SEPTA service caused by construction to the Center City transit hub, as well as how to cover costs for increased Regional Rail service that will be needed to accommodate suburban 76ers fans once the arena opens.

“The Sixers are responsible for the operational costs for SEPTA for this project,” Thurman said.

Carroll noted that SEPTA’s position is that any added service to accommodate 76ers fans needs to become a fixture of the rail system’s schedules, and not just a “party” train.

“That service can’t just be there on game day,” he said. “It has to be an established service.”

A key part of the Sixers’ plan hinges on public transportation — specifically that 40% of fans attending games would travel via SEPTA trains, trolleys, subways, and buses, or take PATCO from South Jersey. That would be a major shift for 76ers fans. Comcast Spectacor, which owns the Wells Fargo Center, the team’s current home, has said that across all events, about 85% of guests drive to the venue.

A city-sponsored study found that the Sixers’ goal of increasing transit use to 40% of fans, while another 40% travel by car, is attainable — but not a foregone conclusion. Traffic would remain manageable if no more than 40% of attendees drive to games, but even marginal increases in auto use beyond that threshold would result in gridlock at critical intersections near the arena, which would sit two blocks from Jefferson University Hospital, the study said.

The 76ers have said they are not seeking taxpayer subsidies from Philadelphia’s city government, but they have left the door open to seeking state or federal subsidies despite frequently describing the project as “privately financed.”

Councilmember Kendra Brooks asked Parker’s team about the city’s expectations about whether the 76ers will seek taxpayer assistance from other levels of government.

“I think that there is a possibility that they will, yes,” city Finance Director Rob Dubow said.

Progressive Council members who oppose the arena questioned why the city is prioritizing approving the project this fall when Philadelphia faces other pressing concerns, including what the election of President-elect Donald Trump will mean for the city.

“We have a housing crisis that we’re failing to address and an impending Trump administration that has Philadelphia as its target,” Brooks said, adding that she believes the legislative process is being rushed. “We have so many other things that we should be focused on besides pleasing Josh Harris, David Blitzer, and David Adelman,” she said, referring to the 76ers’ owners.

Councilmember Nicolas O’Rourke said lawmakers were scheduled to participate in 41 hours of committee hearings and meetings in the coming weeks, pointing out that there are only 69 days until Trump is inaugurated. The president-elect has vowed to cut funding to cities that oppose his policies, including so-called sanctuary cities like Philly.

“We are staring down another Trump presidency — here we go again — that the city itself is not prepared for,” O’Rourke said. “We are prioritizing a pet project of billionaires instead of the material needs of Philadelphians.”

» READ MORE: See the impact of the proposed Sixers arena on Philly and how it compares with other cities’

In a separate exchange, O’Rourke noted that the consulting firm that CSL International, which was hired by the city to do an economic impact study, is owned by Legends Hospitality Management, a stadium concessions company partly owned by the Dallas Cowboys and the New York Yankees.

Dubow said the city was confident in the firm’s projections because it required CSL to use conservative assumptions. CSL found that the Philadelphia market would see a net of 53 new events with the opening of a new arena, resulting in $1 billion in new tax revenue for the city, school district, and state.

Before the hearing began, advocates for Chinatown and other arena opponents held a “people’s hearing” outside City Hall. Marya Camilleri, whose child attends Folk Arts-Cultural Treasures Charter School, told the crowd she worried about the potential health impacts of demolition to construct the new arena, and what it would mean for neighbors and businesses.

“I have lived in West Philadelphia long enough to remember how El construction devastated 52nd Street,” she said. “And I worry Chinatown could suffer the same fate.”

Inside Council chambers, Thomas asked the administration to provide details on how often it had met with leaders in Chinatown, because activists in the neighborhood say they have been shut out of the process.

John Mondlak, chief of staff in the Department of Planning and Development, responded by ticking off a list of nearly a dozen meetings dating back more than a year at which he said Chinatown representatives were included. Suggestions from Chinatown leaders were incorporated, he said, such as the formulation of how the city’s neighborhood-impact study would be conducted.

He clarified after the exchange that the Chinatown representatives were part of larger meetings that included officials from the city and from the Philadelphia Industrial Development Corp., among others. Thomas said he wanted more specific details about the listed meetings.

The Save Chinatown Coalition issued a statement saying that it had four times invited Parker to meet with residents, small-business owners, and community organizations, and “in each and every instance, the request was declined or ignored.”

The committee will take up the arena plan again on Wednesday, when 76ers representatives are scheduled to testify.