The Sixers want to build a new $1.3 billion arena in Center City

The managing partners of the 76ers are teaming up with Philadelphia apartment developer David J. Adelman and others in a proposal to build a new NBA arena at 10th and Market Streets, which they say will create investment and employment opportunities in a city that needs them.

The Sixers’ Josh Harris and David Blitzer want to demolish a block of the Fashion District Philadelphia (the former Gallery) shopping center and, like other National Basketball Association teams, build atop a key public-transit hub. The block is home to SEPTA’s Jefferson Station and a Market-Frankford subway stop, as well as a short walk from the PATCO trains to South Jersey. It connects to parking garages a short drive from I-95, the Vine Street Expressway, and the Ben Franklin Bridge.

“We are going to have our own Madison Square Garden,” but newer, with a “world-class team in a new shiny arena,” Adelman told The Inquirer before Thursday’s planned announcement.

The $1.3 billion project would take up to nine years to plan and construct. It would be ready by the time the Sixers’ lease expires at the Wells Fargo Center in 2031.

“This is huge,” said Paul Levy, president of the Center City District. It would be “one of the most transit-accessible arenas in the nation.”

The details will fall to a team headed by Adelman, whom Harris and Blitzer have chosen to chair the project’s development company, 76Devcorp. Their own company’s top real estate lieutenant, Jonathan Fascitelli, serves as chief executive.

“Arenas are evolving to be downtown, in the urban core,” Fascitelli said. “They bring people together, which can spur a meaningful economic revitalization and improve the quality of life.”

The group already has brought in stadium designer Gensler of San Francisco, stadium builder AECOM Hunt of Dallas, Langan Engineering of North Jersey, and Philadelphia developer Mosaic.

The new arena would seat 18,500, below the 20,478 capacity at the Sixers’ current home in South Philly, which the team shares with the National Hockey League’s Philadelphia Flyers.

“We’ve had a terrific partnership with the Sixers for decades and look forward to hosting the team in this world-class facility until at least 2031,” Comcast Spectacor said in a statement issue Thursday. “We’ve invested hundreds of millions alongside the city, Phillies, and Eagles to make the South Philadelphia Stadium District an incredible destination for sports, entertainment and our passionate fans.”

» READ MORE: Everything we know about the Sixers’ plans for a new Center City arena

Macerich, the California real estate company that operates the ailing mall, has endorsed the Market Street proposal as “a natural evolution” of the property, chief executive Thomas O’Hern said in a statement. The Fashion District opened in 2019 after more than $300 million in renovations of the former Gallery but has lost business with the COVID-19 shutdowns of the last two years.

Adelman said the project would seek no city dollars, in contrast with many U.S. pro sports facilities over the last 50 years, though an agreement that reduced property taxes for the site will remain in place through 2035.

“This has the potential to be extremely exciting. It could be a huge win for the city and the region” if the developers make good on projected community benefit and hiring guarantees, said State Sen. Vincent Hughes (D., Philadelphia).

The project is so big that “it is highly likely that there will need to be some type of ordinance or package of ordinances,” said Anne Fadullon, the city planning director. Most important, she said, developers must “ensure the project works for the surrounding communities affected by this new arena.”

“I grew up watching Dr. J and Allen Iverson, from seats a lot higher up,” Adelman said. “It’s really exciting to build something good for the city. I just turned 50; we’ll play our first game there when I’m 60. So this is for our kids, and grandkids.”

The plan focuses on the block between 10th and 11th, and Market and Filbert Streets. Macerich also owns properties on the south side of Market Street, and, in partnership with Philadelphia-based PREIT, the store block east of 10th. Across Filbert sits the city’s Greyhound bus terminal; to the east is the Jefferson (formerly Aramark) office tower.

Those and other nearby properties could be expected to gain value from the arena, Adelman said, and some could become part of an expanded proposal.

“This is private dollars coming into a tough city that‘s got its problems, and making a bet on the city and on the people,” Hughes said.

He noted that the developers have committed to meeting with, supporting and satisfying neighborhood groups in the nearby Chinatown and Washington Square neighborhoods.

“They have got to make that right,” Hughes said.

Asked about traffic and potential neighborhood concerns, Adelman said the owners have committed to spending millions through a “public benefits agreement” to help the area. They have also promised hiring agreements to ensure that women, Black and other underrepresented contractors make up a large part of the workforce.

“I was born and raised in Chinatown, and this is exciting,” said John Chin, executive director of the 56-year-old Philadelphia Chinatown Development Corp., which has developed affordable housing for the neighborhood. But residents would likely be “cautious” about embracing the concept.

“We know these projects have gentrifying effects on any neighborhood, and we need to be protected,” he said. “We will not allow any project to harm the preservation of our community.”

» READ MORE: The Sixers aren’t the first team to eye Center City. Here's why it didn't work for the Phillies.

Inside, the new arena would offer better game-viewing “sight lines” for spectators and enhanced digital services, said Tad Brown, head of the team owners’ management company, Harris Blitzer Sports & Entertainment.

Brown said he knew when he ended his 20-year career with the Houston Rockets to come to Philadelphia last year that he would likely be helping prep a new Sixers arena — and that Harris and Blitzer were willing to spend for a championship team in a new facility.

Philadelphia sports teams and some city leaders have long sought a downtown sports venue. The Sixers were outbid for development rights at Penn’s Landing in 2020. A late-1990s Phillies proposal to move to the neighborhood east of Broad and Spring Garden failed to win political support in the face of objections from Chinatown-area housing and business groups that feared they would be displaced.

» READ MORE: Rebuffed from Penn’s Landing plan, Sixers may begin hunt for new home elsewhere in Philly

The NBA considers the latest plan “a tremendous showcase for the city and the team” and said the Sixers’ owners “will use this development to help revitalize Center City and the surrounding community,” as NBA arenas have in other cities, NBA spokesman Mike Bass said in a statement.

“We have the luxury of a really long time before this is on the ground, and we are having a lot of conversations with workers, contractors and businesses knowing that we are generating a lot of economic opportunity for diverse Philadelphians,” said David Gould, chief diversity officer for Harris Blitzer Sports & Entertainment and a former city official.

Ryan Boyer, the Laborers’ union leader who heads the Philadelphia Building and Construction Trades Council, said the project could “galvanize the construction industry in Philadelphia.”

Boyer predicted that this project would succeed where other proposals had fallen short “because now you have David Adelman, who understands the Philadelphia group ecosystem” and how to work with the interested parties whose support makes projects happen.

The Carpenters, Electrical Workers, Sheet Metal Workers and other unions have already begun reaching out to city high schools to help recruit a “diverse and inclusive” workforce into apprenticeship programs, he said, in anticipation of at least 700 new union construction jobs on the Sixers site and other projects.

Adelman said consultants believe that as many as 9,000 professionals, trades members and managers may eventually work on the arena.

» READ MORE: Sixers owner invests $10M into Philly’s Mosaic in bid to build firm into Black-owned real estate juggernaut

Hughes said he expects the developers to agree to hire at least 40% of workers from underrepresented communities. Mosaic cofounder Greg Reaves said that he and his colleagues at the firm are “skilled in bringing in some of the most diverse professionals, architects, civil engineers, structural engineers, geotechnical engineers” and that the Sixers have made clear they want to bring in similarly diverse union contractors as a “model” for other projects.

Mosaic received a $10 million investment from Harris last winter.

City boosters cheered the plan. “Market Street is a dead zone,” said John Fry, president of Drexel University, who said he’s been a fan of Adelman’s since they served on the first University City District board in 1998. “Given the state of this city, putting something like this in one of our most important commercial districts is exactly what we need.”

“This couldn’t have come at a better time,” said at-large City Councilmember Allan Domb. “It will help with public safety.”

The development plan unites three billionaires who got to know each other watching Sixers home games from courtside seats and who have grown very wealthy in the U.S. real estate and private investment boom of the last 30 years — Harris as cofounder of Apollo Global Management, Blitzer as a senior executive of Blackstone Group, and Adelman as chief executive of Campus Apartments.

» READ MORE: What if the Phillies ballpark had been built in Center City?

Harris, the Sixers’ managing partner, and Blitzer, co-managing partner, are University of Pennsylvania graduates; their firms’ income includes annual fees from clients such as the Pennsylvania state pension systems. Like the owners, Adelman is not only a real estate mogul, but also a private-company investor. He cofounded Philadelphia-based FS Investments and owns Darco Capital, a private equity firm.

Besides the Sixers, Harris and Blitzer are owners of the NHL’s New Jersey Devils and the Crystal Palace football club of England’s Premier soccer league.

“We’ve truly enjoyed our time at Wells Fargo center,” Blitzer said, but are now “excited to give our fans and players an arena like they’ve never experienced.”