Philadelphia 76ers call analysis "fatally flawed" after report shows new arena could cost city $900M in tax revenue
PHILADELPHIA (CBS) -- A new analysis is adding fuel to the feud over the proposed Philadelphia 76ers arena on Market East.
University of Pennsylvania grad and University of Washington professor Albert Alcoin released a study Thursday showing what he says could be economic consequences to businesses and tax revenue if the arena moves forward.
"There are clearly some potential negative impacts on businesses that need to be taken into account," Alcoin said.
Alcoin based his analysis on a 2022 study that found there were "little to no tangible impacts of sports teams and facilities on local economies."
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From there, Alcoin says he looked at the possibilities of different scenarios factoring in five years for construction and 30 years of arena operations. In his "low" impact scenario, which would see a 5% drop for businesses during construction and 3% during operations, Alcoin estimated 170 businesses could close over the 35-year span, costing the city more than $227 million in lost taxes.
In the "high" impact scenario (15% drop for businesses during construction, 10% during operations), Alcoin upped it to 566 lost businesses and more than $908 million short on tax revenue.
But Alcoin stressed that his numbers are not definite and that they're meant to be part of the bigger conversation surrounding the arena.
"We want to make sure is that the best use for that site, or would there be other uses that could generate more positive impacts for existing businesses," Alcoin said.
76 Devcorp, in a statement, called the analysis "fatally flawed."
"This should be read for what it is: another attempt by those who oppose the project to obfuscate the truth by pumping out misinformation and half-baked theories instead of engaging in productive dialogue," wrote a company spokesperson.
Stephen Mullin, a Principal at Econsult Solutions and who has analyzed the Sixers, had choice words for the report.
"I don't really consider this to be an analysis, a serious econometric analysis, at all," Mullin said.
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Mullin believes the author started with his premise of the arena being a negative impact, and then, as he said "crafted assumptions that will generate these negative impacts." While Mullin believes it's important to continue to study the true impacts local economies could see from a potential arena, there are some things he believes it would bring to Market East.
"A lot more people. A lot more activity. A lot more spending in that area," Mullin said. "That will beget more and more sending, that's what the models sort of look at and say how does that stuff course through the economy."
At City Hall, decision-makers are still waiting on the city's long-anticipated impact study into the proposed arena. City Councilmember Mark Squilla, whose district would be home to the new arena, says he still hasn't seen a timeline on when that will be released. Right now, Squilla says his focus is listening to businesses, the Chinatown community and plenty of other stakeholders.
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"Market East you have the Midtown Village, you have Jefferson Hospital, SEPTA, Reading Terminal, Convention Center, hotels, so there's a lot of other players in the market," Squilla said.
But the councilmember knows this battle will come to an eventual end. And on Thursday, he believed he had a better timetable for when that ultimate decision could come down.
"Once the studies are done, I believe the decisions will be made within this year," Squilla said. "And I think the determining factor is if we can put enough mitigations in place, through legislation that would be codified and protected by the city, to make sure the surrounding communities and businesses would not only be able to just survive but to thrive and grow."
Below is the full statement about the report from a 76 Devcorp spokesperson:
"To be abundantly clear, this "academic study" is fatally flawed as the underlying research and citations do not actually reach the stated conclusions.
Amid this haphazard report's myriad of issues, there is no explanation of how the researcher arrived at his data, assumptions, or conclusions. If it exists, we encourage the author to submit it to the City for independent analysis as we have done.
This should be read for what it is: another attempt by those who oppose the project to obfuscate the truth by pumping out misinformation and half-baked theories instead of engaging in productive dialogue."
