Inside the 76ers arena agreement approved by Philly City Council members
The agreement requires the Sixers to pay $60 million over 30 years as part of a community benefits agreement.
Over several days of intense negotiations, City Council President Kenyatta Johnson pushed for the 76ers to dramatically increase how much the team was willing to pay as part of a community benefits agreement associated with its Center City arena project.
But in the final talks, the 76ers never blinked, and Johnson put the deal up for a key committee vote on Thursday morning.
The team had initially offered to pay $50 million as part of the CBA, which is meant to offset the impacts of the development on neighboring communities, but will also fund some citywide programs. On Tuesday, Council leaders floated legislation that would require them to pay double that.
The team signaled last week that it was willing to give more than $50 million, and Councilmember Mark Squilla, who introduced the legislation authorizing the arena project, said that Council’s floor would be $60 million.
That ended up being the ceiling as well. Members gave initial approval Thursday to a final deal that includes a $60 million, 30-year community benefits agreement.
The agreement also followed a late commitment from Mayor Cherelle L. Parker — who supports the arena project — to set aside $20 million in city resources to support affordable housing in Chinatown, which abuts the proposed site of the arena near 10th and Market Streets. Advocates for the neighborhood are vehemently opposed to the arena project and say it will usher in a wave of gentrification and disrupt businesses in the historic neighborhood.
Johnson said Thursday the agreement represents a balancing of interests.
”I would love if the Sixers went higher than $60 [million], but at the end of the day it was more than the $50 [million], right?” Johnson said. “They did move to 60. And we had a chance in the CBA to address a variety of different issues that particular members had concerns about.”
Here are some highlights of what changed in the final version of the community benefits agreement:
Increasing funding from $14.2 million to $17.5 million for a new special services district that will provide public safety, cleaning, and other services around the arena.
Increasing aid for businesses that will face disruptions during the arena’s construction from $1.6 million to $5 million.
Doubling funding, to $3 million total, for a new “neighborhood security sub-station” that will include staff from the Police Department, SEPTA, the Center City District, and Jefferson University Hospital.
$3.5 million for the Philadelphia City Fund, formerly known as the Mayor’s Fund, for grants “that support the children of Philadelphia.”
$1 million for city parks and recreation center renovations.
$1 million for an apprenticeship and workforce development program.
$2 million for a Chinatown Legacy Business grant program.
$250,000 in seed money for a Chinatown Community Land Trust.
For some programs, funding was increased or maintained from the initial $50 million CBA but fell substantially short of the amounts in larger versions that Johnson floated in the final days of negotiations. In a $75 million CBA draft version Johnson floated Wednesday evening, for instance, the special services district was funded at $20.5 million, and the aid for businesses disrupted by constriction totaled $7 million.
The new version of the CBA also cut several line items that would cost the 76ers little or nothing in direct spending and were perceived as things the team should provide regardless of how the CBA turned out. They include $1.5 million for expanding the Sixers Neighborhood Basketball League, $3 million worth of free tickets for Philadelphia public school students, and a $750,000 in-kind contribution for “community use” of the arena.
Parker negotiated the initial version of the CBA directly with the 76ers before turning it over to Council. The mayor included funding for some of her top priorities, including $7 million for her year-round schooling initiative and $4.5 million for the City College of Municipal Employment. Council left those provisions in the final deal.
» READ MORE: As Chinatown advocates see ‘betrayal’ in 76ers arena win, others see economic opportunity for Philadelphia
And, in a last-ditch effort to get the deal across the finish line late Wednesday, Parker offered to set aside $20 million in city resources to support affordable housing in Chinatown.
In a letter sent to Council members, which was obtained by The Inquirer, Parker’s director of planning and development said the city plans to dedicate $20 million “to affordable housing activities in the Chinatown community.”
The letter didn’t say from where that money would come or when it would be spent. It is in addition to $3 million that the Sixers have agreed to finance for housing support in Chinatown as part of the community benefits agreement.
Squilla said Parker’s commitment was a critical part of the deal reached to ensure a majority of members would vote in favor of the project. He said it would serve to “offset” concerns about displacement in the neighborhood as a result of the arena, which is proposed to be built adjacent to Chinatown.
But several members who voted against the project during the committee vote Thursday panned Parker’s offer.
”I didn’t even understand where the money was coming from,” said Councilmember Jamie Gauthier, who represents parts of West Philadelphia. “It didn’t feel like a commitment, and it didn’t feel good enough to support Chinatown. … We need a real commitment to affordable housing, not a handshake.”
Two members of the progressive Working Families Party said in a joint statement that Parker’s commitment was a “Hail Mary measure to save a bad deal.”
”This is not part of a Community Benefits Agreement, but rather giving developers an out from their responsibility to mitigate the harm caused by their own project,” Councilmembers Kendra Brooks and Nicolas O’Rourke said in the statement. “This approach gives the appearance of solving a problem, but it ultimately serves to redirect limited city funds from other priorities.”
As of Thursday afternoon, Parker had not commented publicly on her housing commitment. She praised Council’s vote as “monumental,” saying in a statement that the arena’s benefits would extend “far beyond” basketball.