I know most of y’all are suffering from the disease that commonly affects dysfunctionally run cities — arena fatigue — but how’s this for a contrarian take: All the Sturm and Drang we just went through has actually reminded me how lovable, in all their madness, cities really are. They’re where citizen action and private interests often collide, where big fights over big dreams slug it out, where jostling for advantageous position is — get ready for it — like battling for space in the NBA paint. Cities don’t just happen; they’re built by builders and stakeholders and a confluence of interests, all trying to — here we go again — box each other out.
Since the blowup of the Sixers arena deal this week, I’ve spoken to sources connected to the drama, and tons more who were following it like it was our town’s reigning soap opera. Which, in a way, it was. Yes, there are hurt feelings all around. But this is actually what big city democracy looks like: It’s messy, far from perfect, and actually not populated by easy villains. You’ve heard a ton of rhetoric these last days, much of it from the “anti-billionaire” perspective. That’s just easy caricature.
What the narrative really shows is that civic and elected leaders tried mostly in good faith to get something big accomplished — for themselves, yes, but also for the city; way too late, and in the most stumbling of ways, they just may have quite improbably ended up all together in the right place.
Let’s run through the story, zeroing in on some key points that may have gone unnoticed in the day to day drumbeat of news reporting:
Yo, Sixers: Why the about-face?
After doing all the hard stuff — securing the support of Ryan Boyer’s Building Trades, the African-American Chamber of Commerce, the NAACP, the Black Clergy, and then getting the Mayor and Council aboard — it appeared it was a done deal: There would eventually be a Market East arena, right? Not so fast.
In the end, the Sixers and Comcast found common ground on a South Philly arena and entertainment complex; at Monday’s often surreal press conference, it was unclear why the Sixers had taken such an abrupt turn. “We didn’t really change our mind,” Sixers principal owner Josh Harris said. “Actually we were really committed to Market East … Deals don’t come together exactly when you want them.”
Harris’ philosophizing aside, he’s right about the mercurial nature of big urban land deals. This wasn’t a case, as some have proffered, of the Sixers “playing” the Parker administration in order to get a better deal from Comcast, or of Comcast Chair/CEO Brian Roberts and Comcast Spectacor Chair/CEO Dan Hilferty performing some Machiavellian jujitsu. Those takes, as we’ll see, don’t line up. Fact is, this was a hugely complicated project from the get-go, and by the end there were two very practical factors that heavily influenced what Mayor Parker described as last week’s “curveball”: Financing obstacles in the Sixers’ way, and Comcast’s Brian Roberts’ newfound leverage.
First, the financing. Ever since the announcement of the arena plans in the summer of 2022, it has been reported to be a $1.3 billion investment on the part of the Sixers. But that was then. It was always odd that the cost estimate was never reported to have moved. Fact is, due to the vicissitudes of interest rates and the tightness of capital markets, it had been clear for some time that the Sixers would need a few hundred million in state dollars to get their deal done.
Win/win, right? There was only one problem. The City of Philadelphia wasn’t in the room where it happened.
There were a whole host of issues that may have contributed to the math ultimately not working for 76 Place, and shame on the Parker administration and Council for not digging deep into them before greenlighting the project. To wit: With the Sixers currently sucking and Joel Embiid running (when he runs) with the tentative gait of a 60-something weekend warrior, what is the market for luxury box sales? Remember, at the Wells Fargo Center, companies could buy suites for Sixers and Flyers games. How do the economics work when you’re selling just one (potentially sucky) team? And don’t you have to pre-sell some of that inventory now in order to obtain financing? Council and the mayor asked a lot of important questions about traffic and Chinatown displacement, but no one asked enough to anticipate the financing challenges that ultimately torpedoed the deal.
It may not have helped that, last spring, a chief advisor and financier of the deal, the legendary Irving Azoff’s Oak View Group (OVG), was skewered by the DOJ in its antitrust lawsuit against seeming OVG competitor Live Nation. The venue management and advisory company was painted as, in effect, a co-conspirator to force arenas into Live Nation / Ticketmaster control. (According to the suit, OVG insiders referred to themselves as “pimp” and “hammer” for Live Nation’s monopolistic ends.) To be clear, OVG was not sued and I’m told that Azoff — who grew to fame as the one-time manager of the colossal 70s rock band The Eagles — was nothing but professional and supportive in his dealings with the Sixers, but the attention from the DOJ could have been a distraction. No developer wants their financier and advisor making headlines that aren’t about the great progress their project is making.
Most important, Governor Josh Shapiro made it abundantly clear there would be no state money in the offing, which makes sense: Give to this, and the Penguins and Steelers in the western part of the state come calling. Plus, remember that Jeff Lurie’s dream is to host a Super Bowl, which likely requires a dome. It wouldn’t be surprising if there’s talk down the line of a new domed Eagles stadium — either here or across the river.
Without the state making a significant investment, the Sixers were suddenly unable to afford all they had promised. At the same time, it’s not like Market East was the only ambitious project on the agenda of Harris Blitzer Entertainment. Like me, you still may be traumatized by seeing Josh Harris, principal owner of your Philly basketball team, on the sidelines of the Washington Commanders, cheering against our Eagles. Like it or not, Harris is trying to build a state-of-the-art football stadium in D.C. for his Commanders; just last week, there was Harris and D.C. Mayor Muriel Bowser standing behind President Biden at the resolute desk while he signed a bill transferring the land that was the site of the old RFK Stadium from federal to city control. Now the door might be open for Harris et al to build a stadium and develop 170 acres of housing, green space, and retail — kind of like the sports and entertainment district he’s now agreed to partner with Comcast on in South Philly.
Which gets us to Brian Roberts. Until about six months ago, Roberts and Comcast had little leverage in keeping their tenant — the Sixers — from leaving the Wells Fargo Center. But then Roberts’ NBCUniversal made a big bet on the NBA, and on streaming, shelling out nearly $30 billion over the next 11 years to air the league’s games. (As well as WNBA games). Suddenly, Roberts was an important partner of the NBA, and its Commissioner Adam Silver. Keep in mind that the same goes for Roberts and his relationship with the NFL. His network broadcasts the ratings bonanza that is Sunday Night Football to the tune of $2 billion a year in rights fees. What Brian Roberts wants now matters very much to two leagues in which Josh Harris owns teams.
Yes, there are hurt feelings all around. But this is actually what big city democracy looks like: It’s messy, far from perfect, and actually not populated by easy villains.
When Silver met with Roberts, Harris, David Blitzer, Adelman and others in early December, it was for the express purpose of stopping the fighting. In particular, like Mayor Parker, Silver was worried about the Sixers bolting to Jersey, which was dangling a lucrative package. He didn’t want an NBA team playing in Camden and not in the nation’s sixth largest city. (Marcus Hayes of the Inquirer reported yesterday that the Sixers remained in talks with Jersey even after the Market East arena deal passed Council.)
The deal that was struck featured a concession from Comcast — they’ve put something like $400 million into upgrades at the Wells Fargo Arena, and now they’d be partners in building a brand new state-of-the-art arena instead. Adelman didn’t want to abandon Market East and proposed to Roberts that they also partner on an as-yet undefined development project there. Win/win, right? There was only one problem. The City of Philadelphia wasn’t in the room where it happened.
Where’s the mayor?
We’ve kinda been here before. In the early 90s, there was a not too-dissimilar arena soap opera dominating Philly. Then, it was called “Spectrum II” and would ultimately come to be called the Wells Fargo Center. The story line involved the larger than life egos of Flyers owner Ed Snider and Sixers owner Harold Katz. The financing was done by Sam Katz, a municipal finance expert who had already run for mayor once and still had political ambitions.
The mayor at the time, Ed Rendell, was intimately involved. At one point, because Snider and Harold Katz were at such odds, they had to be in separate hotel suites, with Rendell’s top aides and then-PIDC President Bill Hankowsky shuttling back and forth between them; they were doing their best to keep Snider from taking a generous offer from Jersey to go across the river. Things got so heated that the long friendship between Rendell and Harold Katz never recovered. Rendell spent political and personal capital, in other words.
Some of that scenario sounds awfully familiar, except for this: Last Friday, while the Parker administration was quixotically holding a press conference and trying to put a positive spin on the closing of Macy’s on Market East in light of all the development on the horizon thanks to the arena, the deal’s principles were meeting without her and hammering out their new arrangement. Parker and Council had spent serious political capital … and ultimately it was all for naught. No wonder journalist Ernest Owens, who actually broke the story, tweeted: “Moral of the 76ers Arena Story for Philly Politicians: Don’t trust billionaires.”
When Parker learned of this “curveball,” as she put it, that’s when she had leverage. Did she use it? If all you White guys in suits want the mayor of this city at your press conference, she could have said, here’s what I want. That could have included a range of dollar commitments in Market East or Chinatown investments, or commitments on affordable concession and / or ticket pricing, or the Sixers agreeing to move their headquarters back into the city — something she alluded to during the presser, in an off-handed way.
Politically, given the widespread sentiment as indicated in Owens’ tweet, she needed to send a message that she was fighting for the little guy in all this. Instead she (quite ably) played emcee and even had Wanda Sykes there to talk about a WNBA franchise that may or may not happen. (Though one hopes it does.) It all had the air of misdirection.
At one point during the long process behind the scenes, I’m told, the mayor seemed to take offense when Adelman suggested that she hire a negotiator with big city development experience, rather than her political aide or chief of staff, as Mayor John Street had done in 2000 for that era’s stadium negotiations. More seasoned negotiators might have sped the process along. Remember, Jim Kenney sat on the Market East proposal for a year and a half, and then Parker didn’t engage it until after being sworn in. Rather than one negotiation with the mayor and Council, there were two lengthy rounds of back and forth, with all sorts of characters making sure they got theirs.
That said …
Maybe it all ended up in the right place, after all? When Parker took a tour of The Battery Atlanta — where the Braves baseball stadium spurred a groundbreaking mixed-use development that features public, office, retail and dining space — she was blown away, telling Comcast executives (their Atlanta headquarters are in The Battery) she wanted the same in Philly. Comcast Spectator’s Hilferty, along with the Phillies, put together impressive plans for a Battery-like development in South Philly. Give Parker this: After eight years of a do-nothing mayor, she — yet another sports metaphor coming — takes big swings.
Rather than one negotiation with the mayor and Council, there were two lengthy rounds of back and forth, with all sorts of characters making sure they got theirs.
In its offering of a vast communal space in a time of fractured community, the Battery gives a glimpse of how cities can pivot to what leading urban thinkers like Harvard’s Ed Glaeser, author of Survival of the City, and MIT’s Carlo Ratti, co-author of The City of Tomorrow are calling “playground cities” in the post-pandemic era: “We must reconfigure the city into an experience worth leaving the house for,” they write in The New York Times. “Streets once filled by commuting crowds can be reinvigorated by those who really want to be there.”
But this burgeoning movement is not without its critics. In Atlanta, The Battery came about when the Braves left the city for the greener pastures (literally — it was basically forest) of suburban land. One writer called it “a sterile shopping mall;” to some in the Atl, the Black Mecca of the South, it conjured White flight.
All this to say, implementation is policy. If done right, and inclusively, a Battery-like project in South Philly led by Comcast and the sports teams could indeed be a gamechanger. (Though one, regrettably, likely still reliant on car culture).
Um, about that Market East problem…
Let’s not sugarcoat this. Mayor Parker has admirably tackled big problems like Kensington and revitalizing Market East with mixed results thus far. It’s ultimately not enough to simply proclaim. A Sixers Center City arena at least portended the possibility of a Jane Jacobs-like “eyes on the street” reality — drawing foot traffic and, thus, safety to a desolate area — but now Market East is more barren than before. Macy’s? Gone. Wawa? Outta there. CVS and Rite Aid? See ya. Councilmember Curtis Jones has called for a “Marshall Plan for Market Street.”
Marshall Plans, however, require capital — and that will come not from city planners or pols but from developers who see a market opportunity. That’s why Comcast, the Sixers and, presumably, Jefferson all working together to develop the area holds promise, if a toxic combination of city bureaucracy and NIMBYism don’t unwittingly combine to prop up the status quo.
The billionaire dilemma
A good friend of the progressive variety clucked her tongue recently. “Boy, you really love billionaires,” she told me.
No, I replied. I love capital and jobs, in a city starved for both. You tell me: How can a city have jobs without employers? The narrative that’s taken hold this week — the demonization of billionaires — is dangerous, because we need more folks with money invested in our city, not less.
Cities that thrive have one thing in common: An engaged business and civic leadership class willing to risk money and reputation to advance the common good while, yes, hoping to make out well for themselves. In New York, it was developers like the late Richard Ravitch and the late financier Felix Rohatyn who, in partnership with labor, literally saved the city from bankruptcy in the 70s and helped grow it into an economic behemoth. Here, we had developer Willard Rouse, who died a couple of decades ago; he boldly remade Philly’s skyline and courageously stood up to political corruption and organized crime.
Cards on the table: Comcast and Adelman both support The Citizen. Even if they didn’t, I would have taken solace in seeing both of them alongside the mayor at a press conference, putting their egos aside and talking about partnering for growth. Only a few days prior, there was Roberts at the Golden Globes, where NBCUniversal had 21 nominations, including Wicked and Conclave.
For a long time, Roberts delegated most things Philly to the likes of longtime VP and power player David Cohen, but now here he was reminding us of the many times he was enticed to take his company elsewhere and reaffirming his commitment to Philadelphia. Of the city’s top five employers, only one — Comcast, with its 16,000 employees — is a tax-paying, for-profit enterprise. That is not a recipe for growth. In what has become largely a branch office town, our problem is not Comcast; it’s that we don’t have enough Comcasts.
Despite the press conference spin, you could argue that most of the principals got most of what they wanted, without the prospect of inflicting harm on Chinatown. As messy as the process has been, perhaps that’s what winning looks like. As Council President Kenyatta Johnson said, we now have two economic development projects, not one. There are a ton of unanswered questions about all that and, surely, some ill will still percolating.
But at the end of the press conference, the mayor — still no doubt seething from the “curveball” these Masters of the Universe had thrown her way — had them all line up and point their fingers upward in that goofy tradition of hers, signifying that we’re “One Philly.” They looked sheepish doing it, but there they were — Phillies John Middleton, Roberts, Hilferty, Harris, Blitzer, Adelman, even Wanda Sykes — all following directions, fingers raised. After nearly three years of fighting and taking sides and name-calling, could this have been more than a corny photo op?
