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Critics of the proposed Sixers arena on the waterfront have been vocal from the moment the Inquirer broke news about the potential project near Penn’s Landing on the Delaware River.
Philadelphians from seemingly every corner of the city have expressed concerns that range from issues with awarding public subsidies to the team’s billionaire owners to complaints over a potential influx of traffic along a stretch that’s just starting to become walkable after years of effort.
While often controversial, downtown sports arenas are on the rise across the country. Some 45 U.S. cities have seen new stadium construction or major renovation since the turn of the millennium, per a 2016 Brookings Institution study, with a total cost of $28 billion.
Results have been mixed. Government officials and sports franchises tout economic benefits that don’t always deliver. Public financing of professional sports stadiums — which made up half the money spent in the Brookings study and is already contentious — looks even more precarious at a time when city budgets have been capsized by the coronavirus.
The 76ers have been courting state and local officials for some time, but the deal is far from set in stone, as the team is one of four bidders in the running for the parcel. A decision is reportedly coming by the end of September from the Delaware River Waterfront Corporation, the quasi-public entity that oversees the district.
One thing that makes the Sixers’ proposal stand out is its price tag: $4 billion.
That would make it one of the most expensive NBA arena projects in the nation — by a lot. Over the past two decades, this kind of venture has been financed anywhere from $200k at the low end to over $1 billion.
These widely fluctuating costs are largely due to varying scope. It’s become increasingly common for stadium construction to also include mixed-use buildings, often packaged as part of a larger entertainment district.
The Sixers proposal is of that ilk. Beyond retail and commercial offerings in apartment buildings erected near the prospective arena, the team’s ownership suggests building a new public school and new homes for the Independence Seaport Museum and African American History Museum. As Inquirer architecture critic Inga Saffron noted, franchise owners Josh Harris and David Blitzer’s company is vying for “development rights for a mile-long stretch of the Delaware waterfront.”
The stadium as its own neighborhood creator is an idea that’s been floated in Philadelphia before. In other cities, it’s actually been executed — so we can look to those projects as examples of what might or might not pan out should the 76ers get approved.
Here’s a partial list of other NBA basketball teams that have recently built stadiums downtown, including the cost, the financing, the public outcry, and the economic impact of the projects.
Name: Chase Stadium
Year opened: 2019
Owner: Golden State Warriors
Construction cost: $500 million
Financing: Privately financed. Chase Bank paid $300 million for a 20-year lease on naming rights to the stadium.
Neighborhood style: On the bay waterfront, near Oracle Park and a hospital complex in the Mission.
Commentary: The stadium construction was met with sizable opposition from community and neighborhood groups, who noted it would also come with a hotel and luxury condos. Opponents depicted it as a traffic nightmare that would also destroy the waterfront view, altering the fabric of surrounding residential neighborhoods. As will likely happen with the Sixers proposal, critics said the project was being pushed by “two billionaires, neither of whom lives here,” according to SF Gate.
Economic impact: As the stadium’s owners, the Warriors made $2 billion in ticket sales before the arena even opened, which includes concert ticket revenue.
Name: Little Caesars Arena
Year opened: 2017
Owner: Detroit’s Downtown Development Authority, which leases it to a combined NHL-NBA franchise parent company. The Pistons began playing here the 2017-8 season.
Construction cost: Projected at $862 million for the entire district ($932 million adjusted for inflation); eventually exceeded $1.2 billion.
Financing: Nearly 60% funded by tax dollars
Neighborhood style: A 50-block area known as the District Detroit, which includes mixed-use retail and residential.
Commentary: The public financing of the project sparked public outrage, including a lawsuit that sought to block the construction from using school property tax dollars without voter approval. Moving the Pistons also signalled the first time all four of Detroit’s major league sports teams would play close to the downtown, the Detroit News reported.
Economic impact: The construction phase employed some 12,500 people. Urban planners, government officials and business stakeholders said the stadium generated over $1.5 billion in new economic investment in its first year.
Name: Golden 1 Center
Owner: City of Sacramento
Year opened: 2016
Construction cost: $558 million
Financing: Kings owners financed roughly half of the cost of the project, while the Sacramento City Council approved municipal bonds to cover the rest, with some additional economic stimulus grants filling in the gaps.
Neighborhood style: Downtown grid area along the Sacramento River, mostly commercial and government buildings prior to the stadium.
Commentary: Concerns around the rising construction costs over two years of construction came up frequently. The final cost was roughly $50 million more than first projected.
Economic impact: Three years after it broke ground, the Downtown Sacramento Partnership reported a 38% increase in jobs in the city’s downtown area, as well as dozens of new retailers and other businesses, according to the New York Times.
Name: Barclays Center
Owner: New York State, via an umbrella organization
Year opened: 2012
Construction cost: Over $1 billion
Financing: More than half from tax-exempt bonds, as the building was to be publicly owned. Barclays Bank also paid $200 million for naming rights.
Neighborhood style: Part of a 17-building retail and residential project called Pacific Park in Prospect Heights that’s directly adjacent to downtown Brooklyn.
Commentary: Some Brooklyn residents “made careers” out of their opposition to the stadium construction, news reports quipped at the time. Most controversially, the city used eminent domain to condemn, seize and acquire privately owned property for the project.
Economic impact: The stadium did not turn out to be an immediate financial success as its stakeholders predicted. Barclays continued to lose money in the first three years of its operation. The pandemic has stymied any potential reversal of that trend, but even so, the complex lost less money in the first half of 2020 than the year prior.
Name: Spectrum Center
Owner: City of Charlotte
Year opened: 2005
Construction cost: $260 million ($340 million with inflation)
Financing: All publicly funded
Neighborhood style: The First Ward of the financial district (here called Uptown) was once relatively barren, but these days is full of entertainment and some historic renovation.
Commentary: The former Charlotte Coliseum was only 13 years old when the city of Charlotte pitched a new stadium for the basketball team. In 2001, the city put a $342 million spending package on the ballot for voters to decide — and despite poll support, voters rejected those early plans. Opponents cited concerns about living wages in the city at the time, arguing the city’s priorities were out of place.
Economic impact: Boosters noted the stadium also hosted major basketball events that brought in hundreds of millions in estimated economic impact.
Name: American Airlines Center
Owner: City of Dallas
Year opened: 2001
Construction cost: $420 million ($606 million with inflation)
Financing: Taxpayers approved two new taxes to fund the stadium — a hotel tax and a rental car tax. The Mavericks and the Dallas Stars, which shared the stadium, agreed to pick up the rest.
Neighborhood style: Promises of revitalization in the planned Victory Park district lagged despite stadium construction, but two decades later there are signs of things picking up.
Commentary: In the late 1990s, Dallas City Hall feuded over the use of tax dollars to fund the Mavs new home. The brawl divided along familiar lines: Opponents said the city shouldn’t front the money for a development that would directly benefit the team’s billionaire owners, who were threatening to take both the team out of the city. City lawmakers narrowly approved $140 million in bonds to finance the stadium, which were backed by the hotel room and rental car levies.
Economic impact: Dallas paid off much of the bond debt by 2011, earlier than expected, the Dallas Morning News reported.
Name: State Farm Arena, formerly the Phillips Arena
Year opened: 1999
Owner: Atlanta-Fulton County Recreation Authority
Construction cost: $328 million adjusted for inflation, plus nearly $200 million for renovations in recent years.
Financing: The city funded about 90% of the stadium costs through bonds and a $2.50 rental car tax to help finance construction.
Neighborhood style: In the middle of Centennial Park District, built around the 1996 Olympics, next to downtown offices (including CNN) and attractions like the aquarium and Coca-Cola Museum.
Commentary: The project was a replacement for Atlanta’s 70s-era arena, the Omni Coliseum. The rental tax — projected to raise $1 billion over 30 years — was challenged in court after being implemented in 2000.
Economic impact: Twenty years after its construction, the rental tax was also used to bankroll major renovations to the area. That arrangement could now hurt the city’s bond rating as car rentals plummet during the pandemic.
Name: Capital One Arena
Year opened: 1997
Owner: Monumental Sports & Entertainment
Construction cost: $260 million ($436 million with inflation)
Financing: Construction was privately financed, but the D.C. government gave the team plenty of perks, including a property tax exemption, $70 million worth of below-market rent for the land and millions more in low-interest municipal loans for renovations.
Neighborhood style: Between Chinatown and Penn Quarter, a buzzy retail area full of bars and entertainment.
Commentary: Originally called the Verizon Center, the new arena brought the Wizards back into the city from their home court USAir Arena in the D.C. suburbs.
Economic impact: The Downtown D.C., a business improvement district, said there billions in new real estate investment came to the Chinatown area near the stadium in the years after it opened. However, the organization noted this redevelopment would have happened without the stadium anyway, but “the Verizon Center accelerated the redevelopment of surrounding areas by seven to 10 years.”
Name: AmericanAirlines Arena
Year opened: 1999
Owner: Miami-Dade County
Construction cost: $213 million ($337 million with inflation)
Financing: This is one of the more unique arrangements in big city stadium construction — because the Miami Heat privately financed the construction. How? Because the city gave them $38 million in land for free, with a promised $6.5 million in annual subsidies.
Neighborhood style: Along the bay waterfront in one of the few really walkable, tourist attraction-filled areas of non-South Beach downtown.
Commentary: The city also orchestrated a profit-sharing agreement with the Heat, but it wasn’t until 2013 that the stadium went into the black. Even then, the city only saw a sliver of money, while the team kept asking for higher tax breaks.
Economic impact: It took years to find profitability, but the stadium’s boosters tout billions in economic churn for the city. American Airlines moved to end its naming rights contract with the city last year, but it’s still called that until a new sponsor can be courted and government-approved.
Name: Bankers Life Fieldhouse
Year opened: 1999
Owner: City of Indianapolis
Construction cost: $183 million ($283 million with inflation)
Financing: About a quarter from public funding and the rest a mix of private funding sources
Neighborhood style: In the heart of the downtown business district, with residential buildings now popping up.
Economic impact: As in other cities, the Fieldhouse has proven a popular event venue in Indianapolis. Research commissioned by the Pacers showed the stadium drew $370 million in combined revenue in 2018. Last year, the city agreed to spend an additional $365 million to renovate the aging facility. The Pacers would kick in $65 million, and the city would not propose any new taxes on residents, according to the Business Journal.
Name: Rocket Mortgage FieldHouse
Year opened: 1994
Owner: Gateway Economic Development Corp, a quasi-governmental entity that leases the stadium to Cavs ownership
Construction cost: $100 million ($192 million adjusted for inflation)
Financing: The Gateway complex was largely funded by an alcohol and tobacco tax narrowly approved by voters in 1990
Neighborhood style: Part of a larger entertainment district called the Gateway Sports and Entertainment Complex, which also Indians’ ballpark Progressive Field
Commentary: Backers said the complex could draw an additional 2 million people to downtown Cleveland each year, according to the New York Times, and boost its potential to host conventions. That was enough to finally sell the public on the project; an earlier, similar proposal had failed to gain support for nearly a decade.
Economic impact: A 1999 study found the area surrounding the stadium complex did see substantial “physical redevelopment,” with a variety of other buildings and projects constructed.