Philly is trying to gain control of East Market Street from the state. That could help the 76ers’ arena plan.

Philadelphia officials have been in talks for the last year about converting East Market Street from a state route into a city street — a change the city sought for years that has gained new salience in light of the 76ers’ proposal to build an arena on the long-struggling corridor.

Many of the main arteries in Philadelphia are state routes, meaning they are maintained and paid for by PennDot. While that saves Philly taxpayers money, PennDot also regulates those roadways, limiting what the city can do with some of its most important streetscapes.

Some previous plans to revitalize East Market, the stretch of Market Street in Center City that runs from City Hall to Front Street, have been discarded or hindered by restrictions that come with state routes, such as added approvals needed to redesign the roadway or restrictions on outdoor advertising and digital displays.

The city’s past efforts to acquire the street have fizzled. But they picked up again recently and could provide a boost to the 76ers’ controversial proposal to construct a $1.55 billion arena that would reshape the corridor.

“PennDot and the city have held several preliminary, conceptual discussions on a potential transfer of a portion of Market Street over the past year,” PennDot spokesperson Erin Waters-Trasatt said, “but no plan to transfer any part of Market Street has been formalized at this point.”

Michael A. Carroll, Philadelphia’s deputy managing director of transportation, infrastructure and sustainability, said that the city has been interested in taking control of East Market Street since Mayor Michael A. Nutter’s administration but will commit to a deal only if it does not cost the city more money.

Turning East Market into a city street would require Philly taxpayers to foot the bill for maintenance costs currently covered by PennDot, such as filling potholes and repaving. It’s possible that officials will negotiate a swap in which the city acquires East Market Street while the state takes control of other Philadelphia streets or bridges, an arrangement that could make the deal fiscally neutral.

“The outcome will ultimately depend on the city and the commonwealth reaching a mutual agreement, and on that agreement being accepted by the Federal Highway Administration,” Carroll said. “We will insist that the fiscal impact be neutral or positive in favor of the city. The conversations are ongoing, and no decision has been reached at this time.”

Looming over the talks is the 76ers’ proposal to construct an arena with a footprint between Market and Filbert Streets and 10th and 11th Streets.

CBL Real Estate, the team’s local lobbying firm, has met with Carroll, city records show. And the 76ers’ lobbyists in Harrisburg have met with state officials on issues including transportation and infrastructure, according to state records.

Amanda Conte, a spokesperson for the team’s development arm, 76 Devcorp, noted that it’s “widely known that the city has long been interested in gaining ownership of Market Street.”

“This aligns with our proposed plans and is an important step toward ensuring 76 Place is a benefit to the surrounding neighborhoods, the city as a whole, and the team’s fans,” she said.

The state’s tighter restrictions on issues such as outdoor advertising and digital signage could be an impediment to the 76ers’ vision for the arena. Renderings on the project website show digital displays wrapping around the entire building. Restricting or prohibiting such displays could hurt the project’s revenue potential by limiting advertising opportunities.

The debate over advertising and signage on state routes in the city has a long history. From 1974 to 2014, PennDot delegated authority to regulate advertising to Philly officials.

In 2014, PennDot took back control of all state routes in Philly — except East Market Street. The large digital displays now seen on several buildings on the corridor were approved about that time.

But in 2016, PennDot took back control over advertising on East Market Street, as well, at the insistence of the Federal Highway Administration, which manages highway networks in partnership with states and said the city was not adequately regulating signage.

The 76ers are not the only group that wants to see the city take over Market. The Old City District, for instance, has pushed for a major redesign of the thoroughfare between Second and Sixth Streets that is aimed at making it more pedestrian-friendly.

Much of the opposition to the project has come from Chinatown, which borders the project. Its leaders fear an arena could displace or disrupt the area’s culture and immigrant community.

City officials, including Mayor Cherelle L. Parker and City Councilmember Mark Squilla, whose district includes the proposed arena site, have said they have not yet taken a stance on whether the project should be approved.

But many opponents believe city leaders have been quietly supporting it. For example, they cried foul when Squilla in late 2022 introduced legislation that would have facilitated the 76ers’ plan to close Filbert Street between 10th and 11th Streets as part of the project. He abandoned that bill after Chinatown activists questioned why he was advancing legislation for the team when he was ostensibly neutral.

Jenny Chen, a city planner who volunteers with the Save Chinatown Coalition, said negotiations about converting East Market Street are another example of City Hall working to help the 76ers’ goals.

“It’s just another move that seems to be happening behind close doors,” Chen said. “Clearly the arena developers are trying to do whatever they can to try to make this project happen without much transparency or public notice.”