N.J. floats up to $800M in tax incentives for a Sixers arena development in Camden

As the debate over the construction of a potential Sixers arena in downtown Philadelphia takes center stage in City Hall, policymakers may now have to contend with a plot twist in the two-year-long saga: competition from across the river.

New Jersey Gov. Phil Murphy’s administration told the Sixers in a letter Monday that the state could award up to $800 million in tax credits — as well as borrow hundreds of millions of dollars — to support an arena in Camden and a broader “large-scale redevelopment project.”

Legislative leaders in Trenton called the idea “a game-changer” for Camden, and the city’s mayor hailed it as a “generational investment,” while a prominent anti-arena activist warned Philadelphia lawmakers that the Sixers were simply trying to “scare politicians into giving billionaire team owners what they want.”

The development comes as City Council returns Thursday for its first fall session, when lawmakers could take up legislation and regulatory action to approve the $1.55 billion arena and housing tower. The city last week released long-awaited reports on the arena’s potential economic and community impact. The studies said the project at 10th and Market Streets is “appropriate” for Center City but could have a negative impact on Chinatown.

A Sixers spokesperson said the team would consider the New Jersey proposal, calling it a “thoughtful and compelling vision for the revitalization and economic growth of Camden,” where the organization already has a training facility.

“We have worked tirelessly for the past five years to build an arena in Philadelphia, and negotiations remain ongoing with city leadership regarding our proposal at Market East,” the spokesperson said. “The reality is we are running out of time to reach an agreement that will allow the 76ers to open our new home in time for the 2031-32 NBA season. As a result, we must take all potential options seriously, including this one.”

Murphy, a second-term Democrat, floated the idea of a Sixers arena in Camden in July, citing “the lack of progress in Philadelphia.” Outgoing Delaware Gov. John Carney has also publicly encouraged the Sixers to consider moving to his state.

But the letter Monday from Tim Sullivan, CEO of the New Jersey Economic Development Authority, to Tad Brown, CEO of Sixers owner Harris Blitzer Sports & Entertainment, offered more specific details about what a project outside Philadelphia might look like.

Sullivan, a Murphy appointee, said he and the governor envision “a multibillion dollar privately led” development north of the Ben Franklin Bridge that would be anchored by a “world-class arena” and include the “development of significant residential, commercial, and retail offerings.”

Tax credits would also be made available under the Economic Recovery Act, which Murphy signed in 2021, Sullivan said in the letter, which was first reported by ROI-NJ. A spokesperson for the EDA said the arena and the mixed-use development could each be eligible for tax incentive awards of up to $400 million, for a total of as much as $800 million.

The Murphy administration would work with the Democratic-led legislature to contribute state-owned land on the site of a former state prison to the project “for low or no cost,” Sullivan wrote. The Riverfront State Prison closed in 2009 and was later demolished. A Camden spokesperson said the land “has been cleaned and remediated” and is “shovel-ready” for development.

In the letter, Sullivan added that legislation could authorize the government to borrow up to $500 million to support the development, with the bonds supported by fees on tickets, concessions, and parking “with no impact to New Jersey taxpayers.” Such revenue bonds differ from general obligation bonds, which are funded through appropriations.

“We would also expect this legislation to require a comprehensive Community Benefits Agreement, strong local hiring and union labor provisions,” Sullivan wrote.

Legislative leaders including Senate President Nick Scutari (D., Union) and Assembly Speaker Craig Coughlin (D., Middlesex) said in a statement that they “strongly support Gov. Murphy’s efforts to pursue this once-in-a-generation opportunity.”

They said the development “would create thousands of jobs, add significant new tax revenue, and provide a major boost to Camden’s already strong comeback over the last several decades.”

In an interview Tuesday, Camden Mayor Victor Carstarphen said he supported Murphy’s efforts to entice the team to the city. He said he had not yet spoken with the Sixers’ owners about the idea.

“The city of Camden is open for business,” he said. Asked if the city would consider offering local tax abatements, the mayor said it was too early to say.

“The ball is in the Sixers’ court, I guess, right now,” Carstarphen said.

While elected officials touted the project’s potential benefits, analysts expressed skepticism that a state-subsidized megaproject would deliver on its promises.

“Trying to swipe a stadium back and forth across the river doesn’t actually create more economic development,” said Peter Chen, senior policy analyst at New Jersey Policy Perspective, a think tank that has been critical of corporate tax credits. “It’s just moving the thing from one place to another.”

In Philadelphia, activists who oppose the arena said Mayor Cherelle L. Parker, a Democrat, and others shouldn’t take the New Jersey proposal seriously. Parker has spoken favorably about the Center City proposal but has not explicitly endorsed it.

“It’s no surprise that after flawed but damning studies showed an arena would be bad for the city, the Sixers stepped up their veiled threats to leave Philadelphia,” said Mohan Seshadri, a member of the Save Chinatown Coalition and executive director of Asian Pacific Islander Political Alliance.

“We know Mayor Parker won’t be bullied,” Seshadri said in a statement.

Activists have also criticized an earlier economic development program in New Jersey that pledged tax credits to companies that invested capital in Camden and other cities.

The Sixers opened their Camden training facility in 2016 after the state Economic Development Authority approved $82 million in tax credits, to be awarded in 10 annual installments. For the first six months of 2024, the Sixers reported employing 279 workers at the facility, just nine of whom live in Camden.

“There’s no reason for elected officials in New Jersey to assume any of the benefits the Sixers are promising, the developers are promising, are going to come true,” Seshadri said.

The Sixers said in a report filed with the City of Camden that the team has invested more than $1 million in workforce and community development programs there.

“While our track record of community engagement is robust, we have more to do to continue our role as a good neighbor and community partner,” the Sixers said in the report.

Correction: An earlier version of this article misstated the amount of New Jersey tax credits that could be made available to the Sixers to support an arena in Camden and a broader redevelopment project. Each project could be eligible for an award of up to $400 million, for a total of as much as $800 million.