The Philadelphia 76ers have put forward a proposal to repurpose Fashion District Philadelphia, an indoor shopping mall, to build 76 Place at Market East, the new arena and home for the team. The project is expected to cost $1.3 billion and is headed up by the team's ownership. Philadelphia 76ers Co-owner and Darco Capital Founder, David Adelman says the project will generate $1.5 billion in new tax revenue for the city and state over a period of 30 years. David Adelman joins Yahoo Finance to discuss the proposal, the pushback that the proposal has received from different interest from the city, and what the project could provide for the city.
Adelman explains how he has handled the pushback so far: "I think it's important in any large scale development to listen. We've done over 85 community meetings, meetings with small business owners, large business owners, small community groups, non-profits, to get feedback. That feedback has continued to evolve our project...We originally didn't have residential slated as apart of the project but the local community said 'we would like some affordable housing,' we are going to dedicate 20% of the new units as affordable housing units."
BRAD SMITH: We've got David Adelman who is the co-owner of my beloved Philadelphia 76ers and Darko Capital Founder here with us on Yahoo Finance. Look, you've got two Native-greater Philadelphians here. So, no doubt, the Philadelphia fandom is running strong during the segment.
But we got to ask, there has been a lot of pushback with this build out regarding some of the local residents, business owners that would be displaced here. How are you continuing to engage the city in conversations as well as local residents, business owners in the area?
DAVID ADELMAN: Well, it's always good to have some Sixer's fans here with me. But, look, I think if Philadelphia, and you both know it. Philly is a creature of habit. We are not used to change.
And what my vision is Philadelphians deserve great things. And, so to be able to bring-- as I tell everyone-- 27 other NBA teams have downtown arenas, we're going to be number 28. So I'm not inventing the urban arena. But change is hard for some people.
But what's unique about our project is we're taking a mall that is downtown in Philadelphia and repurposing one entertainment complex for another. And so, we're not displacing one resident, one business, we're taking a box of the mall and building the arena on top of that footprint, on top of the busiest subway station in Philadelphia.
BRAD SMITH: David, walk us through just the process of how you draw up a project like a new arena. I mean, you talk about the fact that there has been some pushback. What are you doing to get some of those who are opposed to this idea on board?
DAVID ADELMAN: Well, I think it's important in any large scale development to listen. We've done over 85 community meetings, meetings with small business owners, large business owners, small community groups, nonprofits, to get feedback, and that feedback has continued to evolve our project.
So when you talk about residential. We originally didn't have residential slated as part of the project but, look, the local community said, we'd like some affordable housing. We're going to dedicate 20% of the new units as affordable housing units. Some people said, we want better access to the subway station, we're raising the ball on the arena so that you can give a Market Street entrance to a subway station that currently only enters from the rear of the street. So I think the goal is to listen, hear people's perspective, and try to evolve your plan with that feedback.
BRAD SMITH: David, who was involved in funding this? Because you mentioned-- and the plans is that there would be no cost to taxpayers, but we know that there are some kind of mega profiles that could be involved in making sure that this is funded correctly. And, especially, at a time where we do know that the credit conditions and financing some of these larger complexes, larger constructs that's coming at a premium here too. So who are some of the big players that are really throwing some weight around in order to make this come to fruition?
DAVID ADELMAN: Well, I'm really blessed to have two great partners and the Sixers. Josh Harris and David Blitzer. And they share my vision to do this and not take any city money, let the-- city of Philadelphia has a lot of needs. Our school district has a lot of needs. And what's really exciting is that this is going to be privately funded by the three of us and the team.
And most importantly, it's going to create $1.5 billion of net new taxes to the city, the school district, and the state. So not only are we not taking any funds, but we're actually giving back to the local community. And so we're very excited to be able to do that.