New Jersey offering millions in tax credits for NBA team, rankling progressive advocates

Tim Sullivan, who heads the New Jersey Economic Development Authority, sent a letter this week trying to persuade the Philadelphia 76ers build a new $1.5 billion arena in Camden on the site of the old Riverfront State Prison. (Edwin J. Torres | NJ Governor’s Office)

As New Jersey shoots its shot in courting the Philadelphia 76ers to this side of the Delaware River, progressive activists are crying foul over state officials offering hundreds of millions in tax breaks to attract a billionaire to one of the state’s lowest-income cities.

“I think Jersey really wants to land the Sixers, and this sweetens the pot. That’s not so much of a surprise — but is it the right thing to do for the people of Camden?” said Maura Collinsgru, policy director with New Jersey Citizen Action, a progressive nonprofit.

As the Sixers explore their options for a $1.5 billion arena the team aims to build by 2031, New Jersey Economic Development Authority CEO Tim Sullivan sent a letter to Tad Brown, CEO of Sixers owner Harris Blitzer Sports and Entertainment, laying out what New Jersey can offer the basketball team.

New Jersey would give the Sixers two Aspire tax credits of $400 million each (one to offset the costs of the arena and infrastructure like parking, and another to support surrounding residential, retail and office development), the state-owned site of the former Riverfront State Prison “for low or no cost,” and another $500 million in bonds that would be repaid by fees on tickets, concessions and parking, Sullivan wrote.

“We envision a multibillion-dollar, privately led comprehensive mixed-use development north of the Ben Franklin Bridge that would serve as a transformative catalyst for Camden and New Jersey,” Sullivan wrote in the letter, which ROI-NJ first reported.

But activists say that money would be better spent in other ways, like funding schools in South Jersey or the state’s struggling transportation agency.

Sports arenas in particular are a bad use for these subsidies, said Peter Chen, policy analyst with left-leaning think tank New Jersey Policy Perspective.

While the state frames its offer as cost-free for New Jersey taxpayers, Chen fears it could be substantially costly in other ways. Just because the costs won’t appear as a line item in the state’s budget next year doesn’t mean they’ve disappeared into thin air, he said.

“It’s a shocking amount of money for subsidizing a very profitable corporation owned by a billionaire. The subsidizing of private profits with public money — especially when the benefits to New Jersey residents and particularly sports arenas is so small — it just does not hold water,” he said.

Other than offering tax credits and a parcel of land for the mixed-use arena, there’s very little detail surrounding the proposal. All Aspire residential projects, including mixed-use development, require 20% to be allocated for affordable housing. Aspire projects also require Community Benefits Agreements that lay out provisions like local hiring requirements and union labor provisions, the letter states.

A troubled city

Camden is a city of nearly 75,000 people across the river from Philadelphia, with a median annual household income of just over $28,000, compared to the state’s median income of about $96,300. The city has been long plagued by crime and wealth disparities, and attempts to revitalize the waterfront city with big tax breaks have largely fallen flat . Other times, shady dealings between developers and powerful officials along the waterfront have led to criminal charges.

In 2016, the 76ers opened a training facility in Camden after the Economic Development Authority approved $82 million in tax breaks.

The Sixers have proposed putting a new arena in Philadelphia’s Chinatown, which is centrally located in the city and near major highways and mass transit. But that plan has prompted community protests.

A Sixers spokesperson told ROI-NJ that they will give New Jersey’s proposal a “serious” look.

Still, Pennsylvania Gov. Josh Shapiro told reporters Tuesday that he’s “confident” the team will remain in Philadelphia.

If the Sixers come to the Garden State under the terms Sullivan offered, activists want to see plans clearly laid out for what Camden residents stand to gain. Collinsgru also wants to ensure Camden residents are brought into the conversation, considering they may have to live near a noisy, congested sports arena.

“What kind of an investment are they going to make in the people of Camden, which currently still has great needs in their housing stock, in their public school system? How about we fund things for the people of Camden that really allow them to thrive and flourish?” she said.

A spokeswoman for New Jersey Gov. Phil Murphy declined to comment, referring questions to the EDA.

EDA spokesman Chris Flores said the proposed project stands to have “major economic impact on Camden,” and the agency is “committed to ensuring its residents reap the benefits.”

“A project of this size is complex, but we intend to do this right from the perspective of local benefits and community support. We are ready to work collaboratively with city officials and community advocates to ensure the residents of Camden are put first,” Flores said.

Tom Bracken, head of the New Jersey Chamber of Commerce, stressed that New Jersey is a long way from luring the arena to Camden.

He believes it would benefit “everybody in the Camden area, and everybody in the state of New Jersey.” The state would see major gains, too, both economically and in its business reputation.

It’s too soon to have answers to all the concerns around the project, Bracken added, like how many jobs would go to Camden residents, whether there’s a need for a new transportation center or what the economic impact would be.

“Nobody’s drilled down that deeply on day one,” he said. “It gets real old when all these progressive organizations try to throw cold water on everything that is done to make New Jersey a higher profile state and a more attractive state for businesses and residents.”

But Chen thinks business and state officials consider their proposal a “magic bullet” rather than putting money toward greater investments.

“Somebody’s gonna be on the hook for all this, because they’re going to be paying the extreme fees anytime they go to a Sixers game,” he said, “and a lot of those people might be New Jersey residents.”

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