2009 College graduate conducted an impact study on the proposed new arena for the Philadelphia 76ers that found it could cost Philadelphia more than $1 billion in lost tax revenue.
Credit: Ethan WuAn impact study conducted by 2009 College graduate Arthur Acolin revealed that 76 Place, the proposed new arena for the Philadelphia 76ers, could cost Philadelphia more than $1 billion in lost tax revenue.
The study, which expands on previous research conducted in 2022, examines the potential ramifications the $1.55 billion project could have on local businesses, specifically those within the food and entertainment sectors. It also suggests that reduced revenue could manifest in the form of lower sales and wage taxes as well as a decrease in the city’s business and receipts tax.
Acolin, who received a B.A. in Urban Studies from Penn and currently serves as the Bob Filley Endowed Chair in the Runstad Department of Real Estate at the University of Washington, pursued the study after the previous research found "little to no tangible impacts of sports teams and facilities on local economies,” according to CBS News.
He explored various scenarios, considering a five-year construction period followed by 30 years of arena operations, and projected that 170 businesses could lose business, resulting in the city losing over $227 million in tax revenue, according to CBS News.
According to the analysis, businesses around the potential arena area generate $296 million in tax revenue annually, and the long-term effects of construction would increase revenue loss.
“It’s important not only for us the existing businesses and employees whose livelihoods depend on it but also for the border city that any investment and any development that takes place in the arena be looked at carefully and that all potential alternatives be examined,” Acolin told The Daily Pennsylvanian.
A spokesperson for 76DevCo, the development company behind the arena proposal, said the study is “fatally flawed” and “haphazard” in a statement to CBS News.
The 76ers’ arena proposal has faced backlash since the team’s initial announcement in July of 2022. Members of the Chinatown and wider Philadelphia communities have expressed concern about the arena’s location, which would directly border Philadelphia’s Chinatown, and the effects it would have on the businesses and communities around it. Acolin’s study is the latest in a series of impact studies commissioned by the City of Philadelphia, which aim to further inform Philadelphia residents about what the new arena could mean for the city.
Supporters of the new arena affirm that its construction could serve as a catalyst for economic revitalization in Chinatown and the surrounding areas noting potential for job creation, increased foot traffic, and heightened commercial activity that could accompany the development of the arena. Additionally, the relocation could elevate Philadelphia's status as a destination for sports and entertainment, attracting tourists and bolstering the city's image.
The team released results of a study that claims the arena would generate an estimated $1.5 billion in new tax revenue for Philadelphia, its school district and the state, though the commissioned study has yet to be publicly disclosed.
Acolin told the DP that increased traffic congestion adds to the negative side effects caused by construction. He also added that most fans and concert-goers will no longer consume from local businesses and instead utilize concession stands inside the arena or new business that accompany its construction, adding to revenue loss.
“It’s important to take into account those indirect effects of the investment,” Acolin said.
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