The state Economic Development Authority views construction of a new practice and office facility for the Philadelphia Sixers in Camden as a major boon to the struggling city. The EDA approved $82 million in grants to build the 110,000-square-foot facility, according to NJ.com — the exact amount it is estimated to cost the Sixers to build.
EDA President Timothy Lizura said the project would create 250 new non-construction jobs and net the state $76 million after the cost of the incentive. The project summary says the 250 jobs would have a median salary of $45,000.
So, to do the math — the state is offering the Sixers $328,000 over 10 years for each new $45,000 construction job created and $76 million in revenue — basically half of what will be generated by the facility.
There will be other jobs, of course, as John George explains in the Philadelphia Business Journal.
The team will bring 200 front-office employees from Philadelphia to Camden. (They are currently split between the Philadelphia Navy Yard and the Philadelphia College of Osteopathic Medicine).
Sixers CEO Scott O’Neil said the team anticipates adding 50 new jobs once the Camden facility is up-and-running.
That’s another 250 jobs, which means that we are looking at a total of about 500 jobs, some short-term, some longterm, with some residual effect on the neighborhood — though the impact of these kinds of developments is rarely as positive as people predict. Essentially, the state is giving the Sixers $82 million over 10 years to create 500 jobs and generate an $76 million over 35 years in anticipated “economic benefits” that could come “in the form of wage taxes, and direct and indirect spending.”
Camden Mayor Dana Redd said the project “sends a strong message” that Camden is moving forward
“To say it’s a big day for Camden is an understatement,” said Redd. “We welcome the 76ers to the Camden Waterfront.”
But not everyone agrees. The liberal think tank New Jersey Policy Perspective President Gordon MacInnes said in a press release that stadium subsidy deals “are notorious for short-changing the taxpayer and exaggerating the benefits.” In this case, the state is essentially paying the cost of construction for the facility for a “team (that) is worth $469 million and hardly needs a tax break to build a facility.”
This subsidy deal is among the worst we’ve seen under the Economic Opportunity Act. The net benefit to the state is incredibly low – $76.6 million over 35 years, according to the state’s own projections. That is, if the team even stays that long, since they will only be required to stay for 15 before they can seek tax breaks elsewhere. Each job promised in this deal is worth an astounding $328,000 in state tax dollars, despite having a median wage of just $45,000.
Conservative Republican state Sen. Michael Doherty was equally critical, calling the facility “a free gift from the hard-pressed taxpayers of New Jersey to Joshua Harris, the billionaire owner of the team.”
Governor Christie states that we have an $800 million budget shortfall. Then why is New Jersey providing an $82 million gift for a billionaire? Local governments are being forced to cut to the bone. Why are we opening up the money spigot to take care of a billionaire? How can New Jersey not make this year’s full pension payment, but the state government can find an extra $82 million for a basketball practice facility?
The governor has final say on the project and is likely to approve it. He has been an ally of Camden Mayor Redd — he held a press event in Camden on Monday — and signed the Economic Opportunity Act into law, with some modifications. He also had this to say yesterday in Camden:
“It’s not only good because of additional tax revenue and business but also for the image of the City of Camden to show the Philadelphia 76ers, one of the major sports teams in the region, has enough confidence in the strides we’re talking about making here, that they’re willing to invest significantly in the City of Camden,” Christie said.
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Hank Kalet 