The Philadelphia 76ers have introduced a polarizing situation that involves moving out of the Wells Fargo Center, where they are tenants, to build a new arena in the Chinatown section of the city.
While locals are not happy about it, industry experts believe it could cost the city $1 billion in tax revenue.
Dr. Arthur Acolin, a professor at the University of Washington in the Department of Real Estate, has been researching changes experienced in Chinatowns up and down the east coast for 20 years.
Judging by the results of Acolin’s study, an arena in downtown Philadelphia would serve businesses and the city as a whole. It’ll have to take operations elsewhere, which could include a trip across the Delaware River into Camden.
New study debunks 76ers’ claims for new arena location
Acolin developed a research project that suggests building an arena in Chinatown would have an extremely negative impact on the area itself, as well as the city.
“The 76ers claim that the arena will generate 1,000 new permanent jobs, $1 billion in taxes for the city and school district and $472 million for the state over the 30-year lease term,” Acolin said in the report.
“They have not provided any detailed information about how they came up with these numbers.”
Acolin broke down the potential impact of the new arena in three different categories that covers five years of construction and 30 years of full operation:
- High Impact: Cost the city 566 businesses, nearly 16,000 jobs, and a cumulative loss of nearly $1 billion in lost tax revenue.
- Moderate Impact: Cost the city 280 businesses, almost 8,000 jobs and a cumulative loss of over $454 million in tax revenue.
- Low Impact: Cost the city 170 businesses, 4,700 jobs and over a quarter billion dollars in lost tax revenue.
Acolin: Arenas ‘consistently fail to live up to … unrealistic projections’
It is not uncommon for stadiums, and especially basketball arenas, to fall short of projections, which Acolin alluded to in a press release.
Nearly every study regarding sports venues, Acolin said, comes to the same conclusion: “large positive numbers exaggerating projections to the benefit of teams and developers.”
According to Acolin, what those studies do not take into account, however, is the impact on existing communities. In fact, he added, “[c]onsultants who make their living justifying stadiums are not an independent or reliable source of information if you want to model what will happen to the local economy.
“Arenas consistently fail to live up to the unrealistic projections from these impact studies, creating a Grand Canyon-size gap between studies and reality,” Acolin continued. “Capital One Arena in Washington DC fell 80% short of consultants’ big projections. Chase Center in San Francisco fell 73% short.
“Furthermore, it’s alarming that this economic study fails to recognize that 76 Place could cost the city and state hundreds of jobs and more than $1 billion in lost tax revenue generated by existing businesses. Coupled with likely taxpayer subsidies and already-revealed tax breaks, it’s clear an arena would come at enormous cost for the local community and the city.”
Chinatown members not happy, assembling rally to stop project
As Acolin stated, the new arena would likely displace Chinatown businesses, which would make even surviving difficult, especially during construction. And once the arena is built, it could also lead to gentrification and the loss of cultural identity.
It’s not a surprise that Chinatown locals and representatives have opposed the project for years, since the Philadelphia 76ers introduced it. Debbie Wei, longtime Chinatown community member, asked the following question in a statement:
“These studies were inadequate, and yet still provide overwhelming evidence that the harms and risks of an arena outweigh any imagined benefits. What our leaders do next will answer the question: Who is this city for, and who exactly works for whom? It is time to put the well-being of Philadelphians over the profits of billionaire team owners, and stop this project.”
City Council is expected to review the reports during the fall, and come to a further conclusion on whether an arena is feasible.
Asian Americans United (AAU) and Students for the Preservation Of Chinatown (SPOC) are holding a rally at City Hall on Sept. 7 at 1 p.m. to publicly protest new arena plans in Chinatown.
