Last night I did a podcast interview where one of the questions was (paraphrasing) “Do you think elected officials are starting to get smarter about not offering huge subsidies to sports team owners?” This morning, we learn that New Jersey provided a partial answer:
New Jersey Gov. Phil Murphy’s administration told the Sixers in a letter Monday that the state could award up to $400 million in tax credits — as well as borrow hundreds of millions of dollars — to support an arena in Camden and a broader “large-scale redevelopment project.”
This is not actually news per se: It was reported back in July that a Philadelphia 76ers arena in Camden would be eligible for up to $400 million in tax credits under the state’s ASPIRE program, which one public policy watchdog had called “another last-minute lame-duck special that will benefit big developers at the expense of everyone else.” But the letter from Murphy is the first official confirmation that New Jersey is willing to offer what it already said it would offer, so there is that.
Meanwhile, what does Murphy’s letter say about that “as well as borrow hundreds of millions of dollars” bit?
Furthermore, we are also prepared to work with the legislature to enable the structuring of up to $500 million of special-purpose bonds supported by fees and surcharges on tickets, concessions and parking (with no impact to New Jersey taxpayers) to support the development of an arena.
“With no impact to New Jersey taxpayers” sounds promising, certainly, but it’s the kind of promise that has been betrayed before. To pay off $500 million in bonds would cost about $30 million a year, which would require more than $30 in ticket, concessions, and parking surcharges per Sixers fan, which is a lot. (Maybe if the arena is super-successful at attracting concerts that could be $10-20 in surcharges per fan, but that’s still a lot.) So there’s at least a possibility that some of the bonds could end up being paid from taxes on tickets, concessions, and parking, which would indeed have an impact on New Jersey taxpayers; more once we see actual bond legislation, I guess.
If you’re now thinking that for Philadelphia or Pennsylvania officials, the most rational response would be, “The Sixers stay in the Philly area and New Jersey taxpayers have to pay for the arena and Chinatown can go on being Chinatown, where do I sign?”, you are decidedly not Pennsylvania Gov. Josh Shapiro:
“I’m confident that the mayor will bring this to a conclusion that works for her, for council, for the city of Philadelphia and that keeps the Sixers here in the city.”
Not sure whether Victor Matheson saw that quote before telling NorthJersey.com that “New Jersey is one of these states that could easily be used as a pawn” to “get into a bidding war,” but if not, good prescience, Victor! And podcast host, if you’re reading this: Nope, not smarter yet, check back in a couple of decades.
While it’s of a different scale, this wouldn’t be Camden’s first rodeo: https://reason.com/2018/12/05/taxpayers-will-pay-1-million-to-tear-dow/
(Neil’s even quoted in the story)
New Jersey tried this in the 90s when Florio was governor. He lost and it got scrapped along with the plan to lure the Yankees to North Jersey.
The reminds me of what happened to my wife about 15 years ago when selling textbooks. She had to find a particular school in Camden for an appointment, and she asked an officer “Am I on the right side of Camden to find this school?” The officer replied “Ma’am, there is no right side of Camden.”
I haven’t lived on the East Coast in 20 years but I remember Camden as a place you just didn’t go. Has it changed/gentrified at all?
As I understand it, it has improved since the bad old days of the 70s and 80s after manufacturing left.
Hospitals and education (including Rutgers-Camden) are the main employers and crime is way down from the worst days, but it was very very high, so it may still be higher than other nearby areas.
The Sixers practice facility is there and they’ve done some other throw-money-at-it efforts to make the water front a tourist destination. Depending on the transit, it might be a good place for the new arena if there must be a new arena.
Like a lot of these kinds of projects, the reputation of the area will probably deter some people from wanting to visit even if it is perfectly safe.
If this isthe type of development the Brooklyn Nets situation was supposed to be where its a basically an entirely new neighborhood then it might not be the worst deal ever.
Of course in Brooklyn’s case the arena and team was the carrot for Brooklyn to go along with it and yes I realize most of the promised development has not happened yet.
So one of the articles I saw says the site would be near the Ben Franklin Bridge. So basically people from Philly would just cross the bridge, go to the game and then hop back on the bridge to go home. So the overall city won’t see much benefit just the area next to the bridge.