A New Philly Cathedral?

In a joint announcement today made by the NHL's Philadelphia Flyers alongside the NBA's Philadelphia 76ers, exterior renderings of a proposed new arena in south Philadelphia were shown to gathered reporters and media. There have been rumblings as far back as 2022 about Philadelphia getting a new arena for one or both of its arena-homed teams, and today seemed to be the day where the dream became reality. Of course, there are people like me who don't wear the rose-coloured glasses that others do, so it's time to add a pinch of reality to today's announcement in only a way that HBIC can do. Let's get out the measuring tapes and calculators and break down this arena pitch!

The first thing I went searching for was who was writing the cheques for this new arena, and everything points to the arena being privately funded. As per to Josh Harris, Co-Founder of Harris Blitzer Sports & Entertainment and Managing Partner of the Philadelphia 76ers, "Philly fans deserve the best arena in the world, and we are excited to partner with Comcast to deliver just that. This privately funded arena will be the home to moments and memories that define this city for generations," adding, "This is a new era for Philadelphia sports."

Of course, what Harris doesn't tell you is that the new arena is going to be built on the old site of the Philadelphia Spectrum located at 3601 South Broad Street. That area is currently parking lots for as far as the eye can see thanks to Citizens Bank Park, home of the Phillies, being built on the east side of the concrete jungle. If you've ever been to Kansas City, this is your future, Philadelphia.

Having walked that neightbourhood-sized parking lot in Kansas City during a late summer day, I can tell you that it was dreadfully hot as I passed by row after row of cars. I can't imagine what that would feel like in the winter, but I'd be packing for a polar expedition if I was forced to park further from the arena. Yes, there were people tailgaiting as I passed by, but I just wanted to get to my destination.

The proposed Philadelphia arena unveiled today included a "plan to extend the restaurant footprint, showcasing food-and-beverage pavilions," but I struggle to see where one will put food and beverage pavilions when there's nothing but parking spots for miles around the arena site. The Phillies aren't going to want their parking lots torn up for some restaurant that will pay rent to someone else, so this already sounds like a pipe dream when it comes to nearby amenities.

There's also the claim that this new arena will generate "hundreds of millions in new tax revenue directly benefiting the School District of Philadelphia and the city" which seems quite unlikely. Back in 2024, the 76ers were working with the city to avoid paying taxes through a means called annual "payments in lieu of taxes" or PILOTs. The catch is that "the PILOTs would almost certainly be lower than what the team would pay in real estate taxes" as per The Philadelphia Inquirer's Sean Collins Walsh. JC Bradbury, an economist at Kennesaw State University in Georgia who studies arena finance, told Walsh, "Philadelphia taxpayers would be better off if they did nothing."

The Sixers likely wouldn't abandon this money-saving idea as long as the city of Philadelphia allowed them to build on the old Spectrum site. 76ers co-owner and lead developer David Adelman justified the use of PILOTs to sports news website Crossing Broad by saying, "When you buy your house, there's a methodology for how your taxes are established, your property taxes. For stadiums and arenas, there's no real methodology, so it has to be done within this construct."

Except that's just not true. Geoffrey Propheter, a professor of public affairs at the University of Colorado-Denver, told Walsh that "[t]he Golden State Warriors own the real estate for the Chase Center" and their property tax bill in 2024 was about $19.5 million. He added additional fuel to the fire by telling Walsh, "The facility that you get — even though it's 100% privately financed for construction — is made possible because of the subsidies you get on the operating side."

By fronting the costs for the arena in whole, the Flyers and Sixers will pay less taxes directly to the city via the PILOTs for the life of the arena rather than the proper amount of taxes that would be split between the city and school district. In short, the School District of Philadelphia gets cut out of the picture if the city, Sixers, and Flyers agree to this plan. And unless the owners are crazy, they'll agree.

So let's review what wasn't said in the announcement today:

• Philadelphia will get a new arena in the middle of its largest parking lot with no real room for amenities to be built.
• Billionaire Josh Harris will pay for the arena up front in exchange for tax breaks and lower bills in perpetuity.
• The School District of Philadelphia gets screwed over by the three stakeholders agreeing to lower property tax bills.

While everyone was celebrating a new venue in Philadelphia, it's the fine print on the documents that no one sees that keep things from being better than what they are. Josh Harris is a billionaire - he can easily afford to build an arena and pay the proper amount in annual property taxes without even breaking a sweat, but that's not these arena deals work, I guess. School District of Philadelphia be damned.

We hear owners singing their own praises about job creation and funds generated, but there's always a catch to these municipal endeavours. That catch almost always benefits the owner financially, and no one ever seems to question nor contest these backroom deals. Billionaires don't need tax breaks as much as a school district could use an increase in funding, but that doesn't seem to matter in Philly.

For a place called the "City of Brotherly Love," it seems only a billionaire who promises a new arena gets that kind of love.

Until next time, keep your sticks on the ice!