One thing that the last 120 years of American history has shown us is that you can absolutely, positively trust professional sports owners to do the right thing for their communities.
So when the 76ers tell you that they aren’t looking to build a new arena at direct taxpayer expense, we have no reason not to believe them. After all, if you can’t believe in a hedge fund manager who cares enough about the city of Philadelphia to occasionally commute here from New York City via private helicopter, belief itself is dead.
Frankly, all of us should be ashamed that guys like Josh Harris and David Blitzer feel the need to communicate via high-priced lobbyists and carefully worded statements in their effort to tell us the truth. I mean, who do we think these guys are?
The national economy is in the early stages of what could be a cataclysmic downturn. State and local governments are currently staring down the barrel of massive revenue shortages as a result of the ongoing pandemic. As a country, we’re at a point where we can’t even send each of our working class citizens a $1,200 check without printing massive amounts of money. Are we really so cynical that we think that a couple of guys who had the moral character to amass billion-dollar fortunes for themselves to think that this is an appropriate time to ask the government for a free arena?
Granted, the talking points that their lobbyists are using with public officials sound suspiciously like the things that someone would say when trying to talk themselves into a free arena. But the fact of the matter is that the Sixers’ proposed arena would be free of charge only if you use some convoluted definition of the phrase like, “acquiring a good without spending any money that wouldn’t otherwise have been spent.” It’s precisely this sort of underhanded semantic hocus pocus that has forced them to resort to inventing their own nomenclature for the nature of the deal. As the lobbyists’ talking points make clear: the Sixers’ current plan is to build their arena without any “direct” appropriation of taxpayer money.
That might be hard to fathom, given that the team was once so desperate to avoid paying for real estate itself that it built a training facility in downtown Camden. But when billionaires decide that they aren’t going to be accused of taking handouts, you better believe they’ll find a way. From what we know about Harris and Blitzer’s plan, it is nothing short of genius. Instead of asking other taxpayers for money, the Sixers will simply stop paying their own bill to the government and instead use those funds to pay for the stadium.
If you didn’t know that taxpayers had such an option, well, that’s part of the genius. While we have few precise details about the plan, the secret sauce could be a piece of 2009 legislation that established the concept of a “Neighborhood Improvement Zone” and applied it to a proposed stadium and entertainment complex. Assuming the Sixers envision a similar deal, this is how it would work. The team would agree to continue to pay the full amount of the taxes on its business operations that it is legally obliged to pay. In return, the state would agree to allow them to pay those taxes in the form of a mortgage payment to a bank instead of a check to the government. Given the Sixers’ promise to continue to pay the full amount of their legally mandated taxes, and the state’s promise to allow them to use the full amount of that full amount to pay down a mortgage, a bank would give the Sixers the upfront money they need to construct a new arena.
See? Not only is the arena not at all free, the whole transaction is a big win for all three parties involved. The state ensures that nobody can accuse it of using public dollars to finance private enterprise. The bank ensures 30 years of hefty interest payments. And the Sixers ensure that, unlike the rest of us suckers, their tax payments aren’t spent on schools or roads or children’s health insurance or anything else that does not primarily benefit themselves.
Really, there are no losers, unless you count students and drivers and uninsured children and any state taxpayers who aren’t allowed to funnel their tax payments into capital improvements and, thus, are now shouldering a higher percentage of the responsibility for funding the government and its programs. But if those people are losers, it’s only because they aren’t doing what it takes to win.
Admittedly, there is an argument to be made that none of this is fair. The Sixers will claim that their contributions to the local economy and the taxes that they pay to the city put them in a unique position. They can claim that the size of their tax bill entitles them to special considerations, and that if a state like New Jersey ends up offering them better considerations, they would owe it to their employees and investors to accept them. As the governor of Wisconsin said a few years ago in announcing a public financing deal for the Milwaukee Bucks, “it is cheaper to keep them.”
And, yet, if the Sixers relocated to New Jersey, they would continue to rely on Philadelphia to provide the bulk of their television market. They would still have a significant vested interest in the financial wherewithal of its population. They would still need its roads to deliver fans, and its airport to facilitate travel. They would still brand themselves as part of our community. They just wouldn’t be sharing in the dues.