Governor Murphy Offers Sixers Tax Breaks to Build Camden Arena

As City Hall debates the potential construction of a Sixers arena in downtown Philadelphia, decision-makers may have to deal with a twist in the two-year-old saga: competition from across the river.

New Jersey Gov. Phil Murphy’s administration told the Sixers in the list The state on Monday said it could award up to $400 million in tax breaks — as well as borrow hundreds of millions of dollars — to support the Camden arena and a broader “large-scale redevelopment project.”

Legislative leaders in Trenton called the idea “groundbreaking” 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 the billionaire team owners what they want.”

The development comes as the City Council returns Thursday for its first fall session, during which lawmakers could take legislative and regulatory action to approve the $1.55 billion arena and residential tower. The city last week released long-awaited reports on the arena’s potential economic and community impacts. The study found the project at 10th and Market Streets is “appropriate” for Center City but could have negative impacts on Chinatown.

A Sixers spokesman said the team would consider New Jersey’s proposal, calling it “a thoughtful and compelling vision for the economic revitalization and development 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 with the city regarding our proposal in Market East are ongoing,” the spokesperson said. “The truth is that 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 such, we need to take all potential options seriously, including this one.”

Development worth ‘multi-billion dollars’

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

But in a Monday letter from Tim Sullivan, CEO of the New Jersey Economic Development Authority, to Tad Brown, CEO of Harris Blitzer Sports & Entertainment, owner of the Sixers, there was more detail about what a project outside of Philadelphia could look like.

Sullivan, Murphy’s appointee, said he and the governor envision a “multi-billion dollar, privately managed project” 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 breaks will also be available under the Economic Recovery Act, which Murphy signed into law in 2021, Sullivan said in the letter. first reported by ROI-NJ.

Murphy’s administration will work with the Democratic-led Legislature to transfer public land at the former state prison site to the project “at little or no cost,” Sullivan wrote. Riverfront State Prison was closed in 2009 and later demolished. A Camden spokesman said the land “has been cleared and reclaimed” and is “ready to go” for development.

In the letter, Sullivan added that the legislation could authorize the government to borrow up to $500 million to support the development, with the bonds being backed by fares, concessions and parking “without impacting New Jersey taxpayers.” Such revenue bonds are different from general purpose bonds, which are financed with budget appropriations.

“We also expect this legislation will require a comprehensive Community Benefits Agreement, strong local employment laws and union regulations,” 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 Governor Murphy’s efforts to seize this once-in-a-generation opportunity.”

They said the investment would “create thousands of jobs, generate significant tax revenues and provide a significant boost to Camden’s strong comeback over the past few decades”.

In an interview Tuesday, Camden Mayor Victor Carstarphen said he supports Murphy’s efforts to bring a team to the city. He said he has not yet spoken to Sixers owners about the idea.

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

“I think the ball is in the Sixers’ court now,” Carstarphen said.

Skeptical about the megaproject

While elected officials have touted the project’s potential benefits, analysts have expressed skepticism about whether the state-funded megaproject will live up to expectations.

“Trying to move the stadium back and forth across the river doesn’t actually contribute to greater economic development,” said Peter Chen, a senior policy analyst at New Jersey Policy Perspectivethink tank that has criticized corporate tax breaks. “It’s just moving things from one place to another.”

In Philadelphia, anti-arena activists said Mayor Cherelle L. Parker, a Democrat, and others should not take New Jersey’s proposal seriously. Parker has spoken positively about the Center City proposal but has not outright endorsed it.

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

“We know Mayor Parker will not be intimidated,” Seshadri said in a statement.

Activists too criticized the previous economic development program in New Jersey, which has committed to providing tax breaks to companies investing capital in Camden and other cities.

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

“There is no reason for New Jersey elected officials to assume that any of the benefits that the Sixers and developers are promising will prove to be 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 we have a solid track record of community engagement, we must do more to continue to serve as a good neighbor and community partner,” the Sixers said in the report.