-- to keep the building going, and I'm pretty sure it was more than seven. So can you just get those numbers to us so we have a better understanding?
And will the 76ers management pledge to be neutral in any potential organizing drive that would take place for the new arena?
So we do have agreements with SEIU, with the Building Trades and we're working on a similar agreement with UNITE HERE. It's not complete yet, but that is our goal. And we have already committed that we will have union labor within the building. We will not stand in the way of that.
Thank you very much. The Chair recognizes Councilmember O'Rourke.
Thank you, Mr. President. While many parts of the this particular Arena plan don't make much sense or any sense to me or some of my colleagues, I'd like to talk about why this plan makes sense to you all and the team of billionaire developers who are evidently behind it. There is a perfect spot in the South Philadelphia Stadium complex. Despite having a stadium district with one of the largest complexes of parking lots in North America and an easily accessible subway stop, the team is dedicated or excuse me, the team has decided that the only viable option is an arena in Center City. Can we be honest that it's because HBSE, Harris Blitzer Sports Entertainment, cares more about the potential ROI on related mixed-use development and land speculation than an Arena proposal that is sensible? This proposal isn't competing for championships. It's about cornering the Center City real estate market. This became extremely transparent to me when I saw that HBSE is one of the main investors for a brand new real estate entity called Sports and Entertainment Real Estate Global Holdings or Seregh. Seregh was started just about two months ago September 2024. Even more telling is that it was founded by Mr. Kafenbaum's former boss Jonathan Fascitelli, who was up until two months ago the CEO of HBSE Real Estate and 76 Dev Corp. The Seregh website prominently features the architects of this proposal, Josh Harris and David Adelman. To clarify for us on Council, how much has HBSE invested in the new real estate group Sports and Entertainment Real Estate Global Holdings?
Councilmember, that is a good question. I do not know the answer to that. I will also say in terms of the motivations of the team to locate in Center City, just to address your first question, I don't think we have ever shied away from or denied that this would be a good investment for our business and for our company and for our team, and we've talked about the reasons why. I don't think that's necessarily mutually exclusive with it being a good investment for Philadelphia. We know that there's a wide diversity of opinions in terms of this project. There's a lot of very strong feelings. There are folks who have concerns about it and are opposed to it. There's also many folks who are supportive of it, and not just building an arena but building an arena there. One group that we haven't talked about that is supportive of the project is the Midtown Village Business Association, which represents more than 100 businesses in the area that are very excited about what this could bring back, especially when you think about post-COVID and pandemic and how a dearth of foot traffic has negatively impacted their business and how this could really uplift them and help revitalize Market East. Again, I would reference SEIU who is supportive of this project, not because it's just building an arena, but it's because of the location and the opportunity to revitalize Market East and what that could mean for working-class Black and Brown Philadelphians who are their members.
I appreciate that. And also, I just want to hat tip to SEIU. It is a good union and grateful that you all are working together. But I will say that this makes me wonder or just affirms for me what is true, which is this is for your interest. This is not necessarily a necessity for the City, but there's a billionaire interest here. This makes me wonder and ask the question who the building is for, who this arena is for. Are we building an arena in an incredibly inconvenient location because it's good for small businesses in Chinatown, because it'll get us more affordable housing, because it'll make traffic better in Center City or are we building it because HBSE wants to squeeze every penny from us by claiming the real estate around the arena for personal gain with no 9 guarantees that those developments will support small businesses, prevent displacement or create good union jobs for Philadelphians other than by some of the things that you're lifting up just kind of saying but nothing necessarily in writing? Why do the Sixers get to inconvenience the entire city? Maybe that's a bit of a stretch, but I mean that's how it feels, in pursuit of a new home when we have countless families and locally-owned small businesses at risk of being pushed out of theirs, as you said, there are many folks that are naming this. If this was about doing what is good for the city, why not take a serious look at the options available in the Stadium District? Councilman Young lifted up what other options there might be. And if this is about what's good for the city, as Council Gauthier flagged yesterday, why are we putting this project before any serious attempts at a master plan for Market East in Chinatown? The answer is, I believe, it's not about what's good for the city. It's about what's good for billionaires that doesn't work for me and a lot of other folks. We need a revitalized Market East that is not lost on me. It's a densely populated city that needs that revitalization happening on that eastern corridor, but this isn't how we do it. Let's not get distracted by shiny proposals. Let's have a real conversation on how to deliver on these particular shared goals. That having been said, thank you, Mr. President.
Thank you. Thank you, colleagues and thank you, Council President. I know it's been a long day. I also was grappling -- I spent some time over lunch looking at the numbers that we all talked about and had some questions. So I'm curious maybe your -- sorry, I don't remember your name, the finance guy -- MR. LeVEE: Max.
Max can come up. You said -- there is definitely a disparity between numbers that the City has given us and numbers that you said today. You said earlier today that there would be a direct impact of $770 million to the City and $200 million to the School District over 30 years. Can you break those numbers down for us? MR. LeVEE: Break down which numbers, the 770 million or 200 million?
They do not match what we have. So the 775 million to the City, 200 million to the School District. I'm going to pause for one second and also say we've said over and over again, I'd asked this in a previous smaller meeting, how much does the current Fashion District generate for the City. And the answer was $1 million a year which would be 30 million for the 30 years, but the question is what is that number to. I believe that number might only be property taxes because there's a TIF, so let's be honest it should be generating more than that. So I wanted to break down you said there's a direct impact of 770 -- there will be a direct impact of $775 million to the City over 30 years and $200 million to the School District over 30 years. Where do you get those numbers and the $1 million we've talked about from the Fashion District, what exactly does that cover?
I'll ask Max -- the 1 million, you are correct, that is property taxes.
The Municap analysis though took into account the other tax revenue streams. And when we talk about the billion dollars, that is the net new result of the various property streams --
Sorry. Tax streams, in addition to the property tax. So Max can talk about what the work was that they did. MR. LeVEE: Yeah. So the tax revenues we looked at were real estate taxes, wage earnings taxes, business income and receipts taxes, sales and use taxes, liquor taxes, amusement taxes, outdoor advertising taxes and use and occupancy taxes as well as the PILOT payments.
So we don't currently know that total number for the Fashion District right now. We only know the $1 million in real estate. It's important for us to understand when you say we can make 775 million for the City over 30 years, you have to subtract what the total amount is that we receive now. MR. LeVEE: Yeah. And so, when we did our net new impact analysis, we estimated what the existing tax revenues are for the Fashion District today for those tax streams and we reduced that out of our impact. So the net new impact takes into consideration the revenues the City is already receiving today from Fashion District for those revenue streams.
As does the City's studies. And I would suggest maybe we could spend some time together to go through the line items if that would be helpful to explain what was in or what was out. But the City's studies also did go through line-by-line and do the same thing, net out the estimates of what's being produced today. MR. LeVEE: Yeah. And to be clear, also our net new impact analysis excludes tax revenues that we estimate to be occurring today at the Wells Fargo Center that will just be moving to the new arena.
That is helpful too. Thank you. But your -- MR. LeVEE: And that's just like with the City's analysis as well.
Your 775 and your 200 are net new impact analysis numbers? MR. LeVEE: Correct.
Super helpful. I want to take one last second, a point of privilege, to also say I underscore moving the headquarters here to Philadelphia as well. Thank you.
Thank you, Mr. President. Let's jump right to it. Will the Sixers -- will you agree to incorporate the EOP language into your contracts with the contractors to ensure that we're all on the same page, to ensure that your contractors know that we have these goals to be met and that you can hold them liable in your contracts as well because they're not a party to the EOP? It's just you and the City.
So one question I do have is that during the beginning of the year there was a residential component to this proposal. Why was the residential component pulled off the table if we're concerned about development jobs and things like that? I just want to get clarity on that.
The Chair recognizes Councilmember Mark Squilla, author of the bill.
Thank you, Council President. Thank you, Councilmember Young. During our conversations for over the two years we had met with a lot of community members. And initial conversations with the 76ers group and the Chinatown community, they heard a need and a concern about affordable housing. After that concern was done, the 76ers Development Corp., and they could correct me if I'm wrong with my explanation, had proposed adding a residential tower for affordability to address some of the concerns of the Chinatown community. After that was proposed and a design was put forth, we continued meeting with a lot of the folks in Chinatown and they felt that the proposal was not in their best interest. It wasn't a community benefit for them. They felt that the affordability of the project was not something that people in the Chinatown community would be able to benefit from. The numbers of 80 to 120 percent AMI was far outside the range of people from that community. And we mentioned that to the 76 Development Corp. during our conversations and we requested them to instead of building that tower there, to develop on other sites that the Fashion District own, which is the south side of Market Street and build the density on the south side of Market and not as a community benefit for Chinatown for something they couldn't depend on. And in doing that, we got commitment from the Mayor and part of the CBA dollars for affordable housing to transfer a local parcel that was City-owned in the 9th Police District -- the 6th Police District, now it's called the 9th, at 11th and Winter, that working with the Chinatown community to co-develop that site as a true 100 percent affordable housing project that would have approximately 52 units of 30 to 50 to 60 percent AMI. And we thought that that development would reach more of what Chinatown was interested in as far as providing affordable housing but still allow the development team to build density on the south side of Market Street and also help with some of the vacancies that were on the south side of Market Street. So we saw that as a win-win when we were negotiating with the 76 Development team, that we probably spoke to them about a year before they finally agreed to remove that tower from the project. I got a lot of heat and pushback from a lot of the apartment and development community, but I did agree with the Chinatown community that I thought it was not really built as a benefit for them, even though I think the 76 Development Corp thought it was and that it benefited them. Obviously, the density does help Downtown Center City and it does help building retail to make sure we get more people in the area to go to those retail. But during those conversations, I thought during those conversations that it was better to build the density on the south side and build a truly affordable housing project in Chinatown for the residents of that community.
Thank you, Councilman, for that. I appreciate that. The next question has to do with I guess traffic and infrastructure. Again, you all heard the issues that SEPTA has and your proposal only works if you achieve 40 percent ridership on public transportation. And I can tell you that looking from folks from my community who go to the Sixers games, that's a place we go get fly. We're not in fly clothes on SEPTA, right, to get down there. So we're not driving -- I mean, we're not catching the train. Anybody can attest to that. I'm not, my wife's not getting on the train and going to the Sixers game and we only live a couple of miles away. It's not happening, right. So in knowing that, right, in knowing that are you willing -- you have a segment of folks who will not take public transportation for a variety of reasons. Will you commit to the City to some type of fee, some type of charge, surcharge, for traffic management if you do not achieve your goals of 40 percent ridership? Because again, it only works if you achieve 40 percent ridership. So if you only have 30 percent ridership, percent 14 ridership, who does that burden fall 15 on and who pays that cost? 16
Thank you 17 for the question. So obviously we 18 believe that 40 percent is 19 achievable but so does the City. 20 And the City's studies that were 21 conducted independently of ours came 22 to the same conclusion that 40 23 percent is achievable. It's not a 24 foregone conclusion. There's obviously work that's needed to get there --
Yeah. So tell us those things that have to happen in order for that to be achievable.
Yeah. So a SEPTA system and a PAT -- it's not just SEPTA. It's PATCO, right. 15 percent of our fans live in New 16 Jersey. The functioning systems 17 that are safe and reliable as well 18 as the promotion of public transit, 19 the integration of transit. 20 We've looked at a lot of different cities across the country who have developed in conjunction with transit agencies and figured out how to promote the use of transit to make it a seamless interaction, right. So things like as simple as a website or wayfinding signage or including on your ticket information about the use of the transit. Things like that are the things that need to go into reaching that 40 percent goal.
So you all know the issues that we've had with SEPTA. I'm not going to belabor that point. But to think that we can get SEPTA at a position to achieve those goals right now I think is a hoop dream, as I'll call it. Thank you, Mr. President.
You're welcome. Any other questions or comments from members of the Committee? (No response.)
Thank you for your time being here and I expect as we move forward and go through this process you will continue to keep engaging with members regarding questions and concerns that were brought up during this hearing. Thank you for your time for being here.
This concludes the business before the Committee of the Whole today. The Chair recognizes Councilmember Mark Squilla.
And so, our option for a callback will be on the table. We have a significant amount of time to go through this process. We won't be fast-tracking it. So at the request of the member, the sponsor for the legislation, just be on standby.
This concludes the business before the Committee of the Whole for today. I want to recognize Councilmember Mark Squilla for a motion to recess the public hearing until Tuesday, November 19, 2024 at 10:00 a.m.
Thank you, Mr. President. I also want to wish our Councilmember Quetcy Lozada a happy birthday today, for sticking with us. So moved. (Duly seconded.)
It has been moved and properly seconded that the Committee of the Whole will be recessed to Tuesday, November 19, 2024 at 10:00 a.m. All those in favor will signify by saying aye. (Aye.)
The ayes have it. And we are in recess until Tuesday, November 19, 2024 at 10:00 a.m. (Committee of the Whole concluded at 4:00 p.m.) C E R T I F I C A T I O N I, hereby certify that the proceedings and evidence noted are contained fully and accurately in the stenographic notes taken by me in the foregoing matter, and that this is a correct transcript of the same. __________________________________ TANEHA CARROLL