As it relates to the operational costs, our expectation would be that we would be treated the same as all of the other teams and private companies and businesses in the city and the region.
Okay. All right. Well, we want everybody treated fairly, right. Okay. But what you're doing is quite extraordinary and what you're proposing to do is quite extraordinary. And so, for a project like this is unprecedented. So we can't just sit back and say, oh, well, the precedence of the past is acceptable at this time. It's really not. And so, there are going to be additional asks. There are going to be additional expectations and requirements. And so, we certainly hope that the Sixers with this vision would be willing to step up to the plate on that. I know the bell has rung. I just have one other thing I just want to put on the record for my second round. So when I come back around, maybe you can have these questions answered. I'd like to know how many community-related projects has the Sixers done. That's with all of our basketball courts, our rec centers, our neighborhood programs. What have you done? Former Councilwoman Blondell Reynolds Brown used to say, the best predictor -- Kathy, help me with that. The best predictor of future behavior is your past behavior. So give us some insight as to your past behavior with what have you done with our kids in our neighborhoods and produced.
Just an additional point of information and follow-up or personal privilege, David, and just being transparent, also could you just add the number of Sixers -- and I asked you this -- but I also got to do my job publicly, transparent, Sixers camps, suburbs versus in Philadelphia. Just want to get the numbers on that.
Absolutely. Absolutely. Just answer that now or when we come back?
Well, it's up to the Council President. If he can -- you want him to answer now or should I come back on my second round?
He can answer now. Okay. Before you do that real quick, the other thing I wanted to just put on the record and I don't know if you can answer now, but on the second round minority participation in Economic Opportunity Plans. Some of this stuff is getting ready to shift. Let's keep it real. Some of this stuff is getting ready to shift. We understand, you know, on a federal level that there are going to be things that are in place right now that are likely not going to be in place in a half minute. And so, are you going to be willing to stick with your commitment regardless of what changes happen on the federal level to ensure that there is minority participation and support and Black and Brown workers on these jobs? And I'm talking about not just your commitments, you know -- and, David, it drives me crazy when I hear, when you said earlier food and beverage and the cleaning contracts because it's kind of like Black and Brown people, like that's kind of like those are Black jobs we kind of always have been --
-- hurdled into. And we've had that conversation before, so there's got to be more to it than that.
Agreed. As far as our community work, this isn't comprehensive and we actually have a report that is near finalized that we can get to you that encompasses all of our community work throughout the community, so we'll make sure to get that to you. But I do have some numbers here now to share. So last year or I'm sorry since 2020, we've engaged with and worked with and supported over 800 diverse businesses throughout the region. We've donated more than $1.5 million in assets to support those businesses. As far as workshops and internships go, we have done more than 770 hours of marketing support and training through the Marcus Graham project. We've done nearly 70 internships. We have --
As well as philanthropic donations for things like homeownership, gun violence, court renovations, et cetera. The exact details and numbers we will absolutely follow up with you --
So I would just say this in closing, again back to the previous point that I made, here we are we're getting ready to do something big here, right. And you don't have all the facts together, you don't have all your information together. This is something that really should be touted, shown, promoted. Let me show you what we've done, but you don't really want to show what you've done if you haven't done a whole lot. And in my opinion, you haven't done enough. The connection with the community is missing. It's missing. It's glaringly missing. So thank you, Mr. President.
I'm looking forward to that. Thank you, Mr. President.
Thank you, Council President. I want to start off by saying that yesterday some people in this chamber and some folks who were watching had a problem with the question that I made around the EOP, right. And that is because they assumed that I was against supporting or promoting or including the growth of Black-owned businesses. I want to go on the record to say that I do not have a problem with that. I think that it is extremely important. But what I do have a problem with is being excluded because Latinos are one of the fastest-growing minorities in this city and we're not going anywhere. We're only going to grow. And so, my expectation is that when we are having conversations that Latinos and other minorities are included at the beginning of the conversation and not as an afterthought. If you look around this room in this legislative body, there's of us. I am the 14 only Latino here and I will not 15 apologize to anybody on this 16 legislative floor or anybody 17 watching for asking how Latinos are going to be represented in projects and in opportunities. Because when the Mayor was running, she said economic opportunities for all. And I expect for Latinos to be included and others. Because when I go to battle with my colleagues, I stand with them regardless of who we're fighting for, right. And the expectation is that they stand with me. And so, I'm going to ask you very directly is there two EOPs? And if so, what is your assumption of which EOP is the priority or is there one EOP and are you expecting to use the agreement that you have with the African American Chamber to deliver on your commitments with the Administration?
Sure. Thank you for the question, Councilmember. And I would just say that you've been very consistent in the conversations that we've had with exactly what you said where you're supportive of Black communities but also very clear that Latino communities need to be represented and included as well. There is one EOP, and then there's an agreement and commitment that the 76ers made directly with the African American Chamber of Commerce that predated the EOP or our conversations with the Parker Administration. So in terms of your question of which one has the greatest priority, they're both extremely important to us. And I would also go even further to say that when we came to the agreement with the African American Chamber, we also reached out to all of the Diverse Chambers, the Asian American Chamber, the Independence Business Alliance as well as the Hispanic Chamber of Commerce. We were only able to come to an agreement and, therefore, a commitment with one of them, but we absolutely stand ready and willing and committed to work with those communities and those organizations to make sure that we have similar commitments to other communities as well. (Applause.)
Thank you for that. I'm going to quote the Mayor, right. I hear what you're saying, but I'm going to be watching what you're doing, right.
As it relates to the SEPTA station, across the city SEPTA stations all need investment. And so, how do you all and in your conversations with SEPTA, how have you guys discussed prioritizing the station that you all need to be invested in over those stations that everyday Philadelphians who may not be interested in coming to use the arena, how do you prioritize this project over those in the neighborhood?
Sure. Thank you for the question. I think as Alex mentioned, right now we are focused on building the site where it will be located. And so, as Alex mentioned there will be some and we're working very hard to minimize the physical impacts of Jefferson Station. To the extent to which there are physical impacts on Jefferson Station, those are things that we feel responsible for and would cover. Beyond that, we're not making monetary investments in that station. But we are working closely with SEPTA to ensure that our plans are aligned and we know that they're facing a lot of fiscal challenges and want to be good partners to problem-solve.
What happens if they decide that they are not going to pay for it? You're not paying for it. They're not paying for it. The City says they're not paying for it. What happens now with the project?
Again, we are very sensitive and aware of the fiscal challenges that SEPTA face. And it's not just a 76ers challenge. I think as a region we all have things that we need to be worried about and mindful of given what is facing our public transit system right now. Again, for the things that we would be responsible for impacting the station, those are things -- and just to be very clear and for the record that we are comfortable and willing to and committed to paying for and addressing. Beyond that, again we want to be good partners working with SEPTA and our expectation has always been that we would be treated similar to the other teams who require additional service down to South Philadelphia and other private entities and companies within the region that SEPTA covers those costs as part of their normal operations. (Applause.)
In that station there are businesses, there are jobs, right. What is going to happen with those businesses and those employees that could potentially be displaced as a result of this investment? What's happening? Are you guys engaging them? What's the plan?
So a few things. There's a long and ongoing conversation with all of the tenants in the mall in order to make that those that want to stay and be part of this project in the future have that opportunity. During the construction I think is maybe your more direct question, how are those companies impacted. And we're going to make sure that there's a constant flow of traffic and pedestrian flow and access through to SEPTA and the SEPTA areas and all of those retail spaces that exist in their space as well. We don't envision a long-term impact.
If it ain't in writing, it doesn't exist, right. And so, I think that if we want to -- we're trying to give them economic opportunity, right. If we're going to make these changes there and we're going to force them out of those spaces, then somewhere there needs to be a commitment that says, we're going to displace you from here but we're going to ensure that you are going to be relocated elsewhere and that those jobs that are there are also secured, right. But if it's not in writing, it doesn't exist. And I think that's irresponsible of us.
Understood. Thank you for the point. Just to be clear, we are not forcing any businesses out of SEPTA's space. We are not displacing anyone from SEPTA's space.
Thank you. The Chair recognizes Councilwoman Nina Ahmad.
Thank you, Council President. Thank you for your testimony, David, good to see you, regarding the 76 Place and the economic justification for Philadelphia and its future. I am happy to note in your testimony that the home team pride, its commitment to Philadelphia and most importantly, your acknowledgment that additional changes may be made. So you already testified you're not going to change the CBA, correct?
So just saying not reflecting that changes could be made. So I have a few questions. I'm a dog with the bone. In the absence of the key document, the sublease and development agreement, SDA or Arena lease, a topic that has come up many times yesterday I will reframe my approach by asking you to please walk us through the following sections of the SDA, which we have not seen or reviewed. A term sheet does not do that. Let's be very clear. But we've only seen it being referenced in the ground lease between City and PAID. The Arena lease falls within the definition of contracts involving significant public interest. Hence, my queries. So the first one, Ground Lease Article 8. Assignment, subletting and easement refers to Section 9 of the Arena lease related to permitted transfers. Please tell us the details of this section that relate to the tenants, meaning the 76ers, permitted transfer rights. You need to know who you can give stuff to. The circumstances under which it can do so and limitations and approval requirements for such transfers, including limitations of future users. We have fought against gambling, for example, in the city of Philadelphia near that space, so that's what I mean by future users. Any recovery of the City's investment to date, foregone revenues under PILOT, so this is one. I have a few. Do you want to answer them as I go or --
That way we just make sure we recall the question. So why don't we do the first one first. Alex will speak to that.
Sure. So the references to transfers and permitted transfers, the 76ers are signing a binding commitment to play at this site for 30 years. The transfer provision allows for the team to be sold. It does not allow for another tenant to play there, another tenant to be there. And in relation to gambling, there is actually a pre-existing deed restriction on the site that prohibits gambling on the site. So even if we wanted to, we're not allowed to.
So that means you're bound for 30 years and then that's the end of the agreement, correct? And then it reverts back to the City?
That's the end of the play covenant, and that's based on the general useful life of arenas right now. At the end of the play covenant if we were to decide to stay and extend, we would stay. If we were to decide to leave, we would terminate the agreement and because we are purchasing the land and donating it to the City at the end of that agreement, the land would be transferred back to us.
So you would have the land access to do what you wanted to do post those 30 years?
Okay. Let that be noted. Go ahead. You have recovery of the investment, City's investment to date.
I would just want to make a note that should the lease expire and we take over the land, it wouldn't be that we do whatever we want. We'd still be bound within the zone requirements of the site just like any other site or parcel within Center City.
Okay. Thank you for being on record on that. And then any adjustments for foregone revenues or any of that if those transfers were to occur before?
Oh, if we were to leave or break the covenant before the lease is over?
-- that is not something that we're allowed to do. If we did break that covenant, then the City would have the right to sue us for specific enforcement.
Okay. In the interest of time, Ground Lease Article 10, mortgages, estoppel certificate, non-disturbance refers to Article 12 of the Arena lease relating, right to place leasehold mortgage and inform the City after the mortgage has been placed. So please tell us if there are any limitations on the debt portion of the capital stack and basically maximum loan-to-cost ratio or the LTC and minimum equity requirements from the tenant? We don't have all this information.
Great question. All things that would be governed by the private debt markets. The lenders are only going to give us a certain amount of debt that the Arena can prove it can support. The equity will be required to make up the difference of that.
So do we have more information on what that stack would look like and who's participating in it?
The capital stack and the financing will evolve as the process is. We are not in a position where we're seeking debt financing right now. We wouldn't be able to get it without an approval or where the current status of the project is. So that would happen closer to the start of construction which is typical for real estate development.
So it's just a timing issue, right. It's a timing issue. You kind of said we're under the gun, so these are important documents for us to see where your head is at in terms of how this capital stack would look. So just putting that on the record that we need that. Details of default and remedies to the lender, the right to cure, right. What are those like? Those are details we would need as well --
Yeah, last piece and then I'll put the rest in writing. Are there any provisions under which the tenant can invoke transfer other than Arena lease maturity or default, right? That was similar to the question I asked earlier.
Any provision under which the tenant can invoke transfer other than Arena lease maturity?
The play covenant in the 30-year commitment remains and supersedes everything. We can come back to you with specifics.
So there will be significant penalties if that were to -- thank you, Council President. I'll put the rest of my questions in writing.
Or you can also if you want to finish those questions during the next round, I'm more than willing to call you if you want to get them now as opposed to submitting them in writing. Councilman Mike Driscoll.
Thank you, Mr. President. And thank the members of the organization, all of you for being here, David, Alex. I know this has been going on for several years and we appreciate that. I know you negotiated with the Kenney Administration. I know you negotiated with the Parker Administration, but we're a separate branch of government. We're not the executive branch. We are the legislative branch. This isn't going forward unless you get a majority of the votes of the people in this room. And I don't think we're trying to move goalposts here. I think we're trying to articulate some serious issues that we want to get to yes. Some of them, for me in particular, Council President has charged me with Chair of Public Transportation and I've heard from SEPTA. And I know that SEPTA is not satisfied. And as Councilmember Bass pointed out, the hour is late. So I ask today for you to commit to have some serious conversations with SEPTA so that we can all get a higher comfort level before moving forward?
Councilmember, first, thank you for the question and appreciate that and absolutely appreciate and respect the role of City Council in this process. And we knew this was coming. We know that there were changes that will be made through the legislative process. As far as SEPTA goes, yes, you absolutely have our commitment on that. The report that many of you saw we only received very, very shortly before it was shared with you all. We're still waiting on details and the assumptions that we can directly engage with SEPTA to really understand what's behind those numbers and compare them to our plans and make sure that we can move forward. But to your point, we have a similar sense of urgency to have those conversations and get those resolved and we're looking forward to our next conversation with SEPTA to make that happen.
And I will just add we're committed to being partners with the City, with SEPTA, with the state, with you all in problem-solving and work problem- solving through this.
Well, thank you for that. I also want to endorse Councilman Isaiah Thomas' request that the corporate entity consider locating here in the city where it does business. It's very important I think to all of us.
Member Driscoll, I have a point of information from Councilwoman Jamie Gauthier.
I just wanted to pause and make sure that we knew -- I heard you say you made a commitment. But I wanted to pause and make sure that we had clarity on the specifics of the commitment that you were making. What is the commitment?
Yeah. So what I understood Councilmember Driscoll to be asking was a commitment for us to meet and discuss and come up with solutions with SEPTA with urgency. And correct me if I got that wrong, so that was what I was referring to and responding to.
So I just wanted to clarify because I met with both of you last week and you specifically said that the 76ers did not have the capacity to "subsidize SEPTA's operations." Are you changing that position?
No. Again, I was just responding to Councilmember Driscoll's request for us to commit to meet with SEPTA and come up with solutions with some urgency, which is something that we are comfortable committing to doing.
Is what you said in our meeting a relevant statement or is that not what you meant?
No. Correct me if I'm wrong, my understanding is they are two different things. Councilmember Driscoll was asking for urgency for us to meet with SEPTA, and I believe you are requesting for us to subsidize SEPTA's operations; is that correct?
I'm asking what are you meeting with them about if you already have been explicit that you do not have the capacity and will not be covering the cost. What is the commitment that you're making at this table? Are you meeting SEPTA to tell them that or what are you --
Member Gauthier, you can save this for your round of questioning because it's questioning as opposed to just points of information.
Oh, I'm sorry. I was just confused and I wanted to make sure it was clear for the record.
Yeah. Is the question what we're meeting with SEPTA -- I just want to make sure I'm straight. Is the question what are we meeting with SEPTA about or is the question around what commitment we made to Councilmember Driscoll?
I think what she's saying is, right, just to summarize it -- and I'm going to give the time back to Councilmember Mike Driscoll before we break -- you had a meeting with her and you said y'all didn't have the capacity or you weren't going to subsidize the SEPTA operation because of the increase of ridership. That's the conversation you had with her.
And she's saying if you're committing to Councilman Driscoll who asked for a serious conversation with SEPTA, I guess it begs the question -
-- if I was in her mind, what is that conversation going to be about if you've already told me that we're not going to subsidize SEPTA. Correct, Councilmember Jamie Gauthier?
Correct, that's what I'm saying. Thank you so much.
Like what's the point of meeting if you already said --
We think we can be helpful and be a problem- solving partner to SEPTA and the City and the state in this conversation.
And just as an example and as I mentioned before, some of the numbers that SEPTA shared with many members in this room and that I know folks are concerned about are big numbers. They were big numbers to us as well. When we asked them what were the assumptions that went into those numbers and was the economic impact or the fiscal impact going to be as big as they are anticipating, we do not believe that it will be because we don't think that they had all the information from us to make those assumptions and make those estimates. So part of what we're meeting with them about is making sure that the information they have and the assumptions they have will be accurate so that we can problem- solve together to figure out what is really needed.
So we can infer that when you do have the meeting with SEPTA, you'll be comparing their data versus your data as y'all try to find some level of resolve. But your current position is to Councilwoman Jamie Gauthier is that at this moment we wouldn't subsidize --
Thank you, Mr. President. Just a couple quick points. I think you heard in the testimony from many of our members yesterday that point to the business disruption figure in the agreement of 1.6 million. My first read of that I thought that was woefully inadequate and I continue to believe that. So I know you're talking about just shifting money within the agreement. I would suggest that you consider perhaps outside the agreement because those impacts of businesses are real. I was a small business owner here in the city and when there were public projects, that money adds up quick and I think we all want to be sensitive to that. So I'll just put that on the record.
And then lastly, I know you're committed to this as the developer, but we're all working really hard for 2026. We have the Major League All Star Game coming here. We have FIFA World Cup coming here. We have a big golf tournament coming here. We have July 4th, the 250th Celebration of Democracy, the Semiquincentennial. All of our hard work is going into this, and the last thing we need is business interruption in Center City. So I know you're committed to not having that. I just want to make sure that that is a true commitment because that's real big. If we shine in 2026, I think our tourism is going to go through the roof. I think we're going to have major businesses looking here and you're going to get more customers. So I'll leave you with that.
Point of information. The Chair recognizes Councilmember Thomas for a point of information.
Not line of questioning. Point of information.
-- information. No questioning. Point of information. I want to be clear they did not commit to saying that traffic in 2026 will not impact the things that Councilmember Driscoll talked about. So I want to be clear on the record that they did not say, yes, we will not interrupt traffic. It was a robust answer that did not lead to a yes. So if it's not a yes, it's a no. So that's just the point of information I want to make sure that we're clear on as it relates to 2026 traffic congestion and disruption. Thank you, Council President.
Thank you, Councilmember Thomas. Councilmember --
The requirements of the construction schedule for this site would dictate that we have to start the demolition in 2026. What we are committed to doing is working to ensure that impact of whatever construction has started is minimized, maintaining lanes of traffic, minimizing sidewalk closures. All of those things that do, I think what you're looking to do which is make sure that visitors to the city have a pleasant and good experience. And I think we can do both, correct.
Members, please speak into the microphone for the record.
I'm sorry, Council President. So I just wanted to be clear because that means my point of information is wrong. That means that they're saying, yes, they're committed to there being no traffic disruption based on the construction that's going to happen in 2026. You're saying, yes, there will be no 18 traffic disruptions?
Council President, for the record minimizing impact is very different than a yes commitment. Minimizing impact means we're going to try to do our best. We're not asking them to try to do our best. We're asking them to say, yes, you will not have an impact. So for the record, that's two different things. Thank you, Council President. Sorry, Councilmember Driscoll.
Thank you very much. Very lively discussion. We will recess until 1:45. (Lunch recess.)
This hearing is now called back to order. The Chair recognizes Minority Leader Kendra Brooks.
The Chair again recognizes Minority Leader Brooks.
Thank you, Council President. I was in la-la land for a minute. Good afternoon, everyone. I want to thank the Sixers organization for finally making the time to talk to all of Council. I do want to state these conversations, that they should have started many months ago, if not years ago, because of this body's approval over the plan. And I look forward to this discussion today and has been pretty robust so far. I want to go directly to my first question. It was pretty clear yesterday that City Council is not prepared to approve this legislation without further discussion of the CBA. And there has not been a lot of discussion about what the total cost of this land could net in property taxes. So an independent analysis has said that the land could bring in $450 million. And the $50 million CBA doesn't even come close to this. So what's stopping you right now from committing to this City Council from working with us to develop a new CBA that we can bring in at least $250 million, which is still far short of the $450 million proposed around this land?
Councilwoman, thank you for your question. I have not seen the study that you're referring to but understand what the numbers are. The land right now, I believe the mall generates -- between the mall and the Greyhound station?
A little over a million dollars a year. And the way that this would work is there is a state law that governs how professional sports venues are taxed in the state of Pennsylvania. That law is what results in the PILOT payment. Our PILOT payment would be multiple times more than any of the other professional sports venues in the city. And so, that is what we are looking forward to contributing to the City and to the School District. And then I believe part of your question was specifically around the amount of the CBA; is that correct?
Okay. As I stated before and I think Council President asked the question in terms of how we got to the $50 million number. It was a combination of what the project could support, looking historically at what other venues had contributed as far as a Community Benefits Agreement goes, especially other ones that actually did receive local public support which we are not pursuing. And so, that's where we're at. And 50 million is the number that we can support. We currently can't go above that.
Okay. So when the Sixers announced their intentions to include the Community Benefits Agreement when they started publicly proposing the stadium, the number that they used was 50 million. What changed in the Community Benefits Agreement between the initial proposal and the one that is under consideration for City Council now? Specifically, what input did we have from the community?
Yeah. No, great question and thank you for that. When we announced the project in July of 2022, we probably spent the first six to nine months almost exclusively reaching out to engaging with stakeholders in Chinatown to, one, build relationships, secondly, to understand what concerns were and, three, to share more information about the project. Through that process we had conversations around what a Community Benefits Agreement could look like, and we even made some offers and some examples about what that could look like. We never received a formal response to any of those. And so, really where we ended up in terms of the Community Benefits Agreement that's in front of you, that was in conversations with the Mayor's Office and ourselves. And a lot of the stakeholders that we were engaging with in Chinatown got to a point where they didn't feel comfortable engaging directly with us because they were concerned that they would be misperceived as endorsing the arena when they weren't really sure about where they stood on it yet or experience other things that they weren't really comfortable with in terms of those perceptions. And so, they felt more -- they asked us respectfully we don't feel comfortable continuing to meet with the 76ers. We prefer to work through our District Councilmember Councilman Squilla. And so, we know that Councilman Squilla has had conversations with those individuals from the neighborhood and they felt most comfortable for City Council I guess between Councilman Squilla and as a whole to represent their interests as far as the Community Benefits Agreement goes. So the short answer is we never had a formal Community Benefits Agreement because folks didn't feel comfortable transacting with us because of a lot of the pressures and controversy around the project.
Can I keep going? I still have more? I have another one. Can I go?
Okay. So the PILOT only pays about $2.5 million to the School District. That basically covers the per people cost for about 150 students per year based on School District's 2023 budget. If we do not let billionaire owners avoid property taxes, the School District could get 224 million in funding over the next 30 years. Do the Sixers think this is a good deal for Philadelphia students who are facing school closures, asbestos and lack of basic items like air-conditioning in schools?
I'm sorry. I missed the last part of the question, Councilmember? Do you think this is a good deal for school students? Sorry. Do you think it's a good idea, a good deal for school students being as though we're losing so many tax dollars around this?
Understood. I think the way we look at it is again based on how professional sports venues are taxed according to state law in the state of Pennsylvania. We have negotiated a PILOT agreement that again is multiple times more than the other sports venues as well as more than what is currently being generated by the sites that we would be building on. So, yes, we think it's a good thing that we are significantly increasing tax dollars to the School District through this project.
And if I can add, I think it's important to look at the project in the totality. It's not just about the PILOT, but the very -- all of the additional tax revenue streams that would be generated from the project. And when you look at that projection, that's $200 million over the course of the 30 years that goes to the School District. That's a new revenue, revenue that wouldn't happen without this project.
You're welcome. Councilmember Nicolas O'Rourke.
Thank you, Mr. President, and good afternoon. Good afternoon, Mr. Gould and Mr. Kafenbam. Did I say your name correctly?
Kafenbaum. I apologize. So we've been told repeatedly that no public dollars will be used for this project. And --
Excuse me, Member O'Rourke. Could you speak into the microphone please?
And still key aspects of the deal's impact on vital public services are still apparently being negotiated. If available, will the Sixers take any state dollars to support this project and can you answer this one clearly because we know the City of Philadelphia is in the Commonwealth of Pennsylvania, so Philadelphia taxpayers pay state taxes and solving our biggest problems requires help from Harrisburg, which means that Philadelphia citizens pay those state taxes. Can you confirm again if the Sixers are taking any state dollars to support this project?
Currently, we are not. Although as we've said since we announced the project, we are open to funding from the state and federal government if there are things that allow us to further enhance the project and bring more resources from the state back into our city.
So then you can confirm then that the Sixers or you all as the representatives or others have had meetings with state officials about the possibility of state funding opportunities for the arena?
We have had very preliminary conversations. Some of them have been in sort of like the normal course of business through other things that we're talking to them about, but there's nothing definitive that's been discussed.
Nothing definitive. Just kind of preliminary conversations. No hard answers from anybody?
As you may have heard, yesterday the Parker Administration told this body that the Sixers would be footing the bill for many additional costs associated with this proposal. I won't spend much time talking about SEPTA. We've talked about it quite a bit. The members have covered it. But let's talk about some of the outstanding costs still there, and these are a couple questions I have. If you could give a yes or no, that'd be super helpful.
Are you planning to cover the costs of police manpower and overtime?
Our understanding is that the teams pay for police presence within their property within the sports complex, and the outside of the sports complex is paid for by the City. The City yesterday testified that that was not their understanding. We're still looking for more clarity from them. Our request as with everything is to be treated fairly and equally with our peers.
Do you plan on covering the cost of any new signage and wayfinding required for the new arena?
Any signage and wayfinding on the arena and the ancillary properties that we control, yes.
What about new technology required for ambulances to switch the red lights and move faster and all that?
Yes, as part of our TIS proposal, the mitigations that are proposed in there would be our cost.
Okay. The first one concerns me. The other ones are a little bit firmer. But if we don't have firm commitments from the Sixers to pay for these added costs, as has been expressed, our fear is that the cost will fall back onto the City at a time, mind you, when we can't afford to be siphoning off any of our public dollars away from our priorities. And furthermore, I'd like to say frankly and with regard like Member Lozada, I also caught a little flak yesterday on the Internet, was described as rude and disrespectful in my line of questioning, so please hear my heart.
It's disingenuous to keep calling this a project with no public money when costs are piling up for this project and no one is committed to picking up the tab and when we talk about getting state funding knowing that Philadelphia taxpayers end up paying that. So I want to talk about the Sixers-sponsored study through Municap, Inc. in 2023. I know there's a representation from Municap with us today. And for the record for our colleagues on the floor, the detailed report and assumptions from the Sixers study has really never been publicly released. So I wanted to ask this question: Using that study, the Sixers first claimed that the arena will bring 12,000 construction jobs. Since then, as you testified this morning, I believe it's been revised down to 9,000. For reference, the entire U.S. economy added 12,000 jobs in October 2024. That's the entire US of A. And the City's economic impact study forecast only 260 full-time construction jobs. I don't want to spend more time talking about this and I think it would be helpful, actually at this stage is imperative, that you show your work on this. Are you prepared to release today the full Municap study?
A few questions in there I'll take. So there's Municap work. There's Econsult work. Jobs, tax revenue, those were two different studies that we conducted. In relation to the 9,000 versus 12,000; 9,000 direct full-time equivalent jobs; 12,000 indirect and induced full- time equivalent jobs.
I'm sorry. Just to clarify, 12,000 is indirect plus direct. Not 12,000 indirect total.
Correct. Yes, sorry. So 9,000 jobs direct, additional 3,000 indirect and induced total 12,000.
Are you prepared to release today the full Municap study?
That study has been given to the City for their use and has informed their consultants report that was done independently.
Are you prepared to release today to the public, you all?
I have other questions, Council President. Should I wait for the second round?
Thanks for being here. Thanks for coming back. I want to underscore, summarize a lot of what we heard in the first session quickly that I would say we mostly all agree that we want more money in the CBA. We think it's not enough. We want greater support for the operations, including everybody who's being hired. We want more money for SEPTA. And I will now get into some questions. The first question is I just wanted to follow up on one thing you asked about SEPTA. You said you were going to pay for the capital work that is needed for SEPTA. Can you describe what that is because my belief of what that is, is changes that need to be made in the station that benefit the arena but not changes that need to be made in the station that benefit all of Philadelphia?
Okay. And my next question is SEPTA will be here to testify next week. Will you be here on the same day -- will you please come to be here on the same day that SEPTA testifies?
Thank you. Next question: Will they -- so my understanding is that last year Sixers generated $371 million in revenue. This is 22-23 season. What was the profit from that year?
I don't know those numbers off the top of my head, but we're happy to see what we can share and get back to you, absolutely.
Okay. According to Forbes, your operating income was 120 million. Your gate receipts were 117 million. Your top players are paid 50 million. So based on those numbers is $50 million to the City of Philadelphia over 30 years sufficient?
Again, we'll need to look at the numbers just because I'm not as familiar with them, but we'll absolutely check in and get back to you on those, Councilmember. But per my earlier comments from Council President Johnson, also Councilmember Brooks, that is what we believe the project can support. And I won't repeat myself. But, yes, we think that is the right number for this project, especially considering that we are not pursuing any local taxpayer funding.
Next question is -- these are just little ancillary questions to other things that I heard. You said there's no gambling allowed in the deed restriction for the site. You also said that you are going to purchase the properties across the street with this package. Is gambling allowed on the parcels across the street?
I would have to defer to our zoning attorneys in terms of what uses are allowed. I don't believe they are, but we can come back to you with a firm answer.
Yeah, we have Herc. I'm going to ask Herc from Klehr Harrison to come up.
So the question is whether or not the parcels across the street would be deed-restricted to not have gambling like the arena itself would be?
Deed restriction is something that exists today. My deference to Herc was on what is allowed.
My understanding is the sites are zoned CMX-5. Hercules Grigos --