Delaware taxpayers contribute millions to Buccini/Pollin's 76ers Fieldhouse

The Buccini/Pollin Group, Wilmington's largest developer, is relying on millions in taxpayer dollars to build a $26 million sports complex that officially broke ground on Wednesday.

The public assistance includes a $1 million grant from Wilmington and a $3 million handout from the state.

The project will also be aided by up to $2 million the department of transportation allocated for area infrastructure improvements to accommodate the new Christina River bridge, which is under construction. 

BPG is also off the hook for the facility's property taxes for the next century.

The developer prepaid $1.3 million for a 99-year lease to the Riverfront Development Corp., a government-created nonprofit that does not pay property taxes. That breaks down to $1,094 per month, less than the monthly rent of some of BPG's Market Street apartments.

Company co-founder Rob Buccini said the project, which is funded by a $17 million loan and over $5 million in equity, couldn't proceed without the help.

"We wouldn't be able to do it," he said. 

The future five-story, 140,000-square foot facility on the east side of the Christina River will feature a 2,500-seat arena which will become the home court of the Delaware Blue Coats, the 76ers' G League team formerly known as the 87ers. 

Groundbroken for 76ers Fieldhouse in Wilmington with G League season three months away

It will also be home to three basketball courts, two indoor turf soccer fields and an athletic training area, as well as retail and office space.

Several groups will work out of the facility including the Delaware Football Club; the Future Soccer Stars Foundation; Titus Sports Academy; and the Nemours/Alfred I. duPont Hospital for Children, which will offer pediatric orthopedic services and sports physical therapy.

Most importantly, according to organizers, the fieldhouse will provide recreational opportunities to youth in Wilmington and the region. 

"Growing up as a kid in a single-parent household, I understand what this means to the community to have a place where kids can go and feel safe and have opportunities, have mentors," said Blue Coats General Manager Elton Brand, adding that a similar facility "helped change the trajectory of my life." 

The project is slated to be completed by the end of the year, Buccini said.

When the project at 401 Garasches Lane was announced in November 2017, Buccini said it could become a "huge economic generator for the city." The governor agrees.

"We're investing as partners in this facility because we believe it will provide the kind of pride and enthusiasm that all of us will be able to ride to be a successful city and state," Gov. John Carney said on Wednesday. 

That was also the spirit of a pitch made over a decade ago for Talen Energy Stadium, home of the Philadelphia Union Major League Soccer team in Chester, Pennsylvania. BPG was the developer of that $115 million project, which was aided by $87 million in taxpayer funds. 

But the promise of a local renaissance peddled by developers and Chester officials never materialized, according to a March report by the Delaware County Daily Times. The stadium sits empty 300 days a year, the Times reported, and an anticipated $400 million revitalization in the area never materialized.  

In general, economists have warned against pouring taxpayer dollars into sports facilities in the hopes of economic development. A 2017 survey from the University of Chicago Booth School of Business found 57 percent of economists said providing state and local subsidies to build stadiums for professional sports teams is likely to cost taxpayers more than any local economic benefits that are generated.

Buccini said on Wednesday that Wilmington will be different. For one, he said, Talen was trying to get off the ground during the economic recession.

"Here, we'll open with the wind on our backs," he said, adding that the 76ers Fieldhouse has a more diverse set of offerings. "There are so many pieces here." 

Mayor Mike Purzycki, who ran the Riverfront Development Corp. for two decades, believes the city will see the fieldhouse's economic impact in increased demand for area amenities, like restaurants and hotels during traveling tournaments. 

"Indirectly, it's hard to calculate what this will do for the (public's) confidence in investing and developing in the city," he said. "It's a huge shot in the arm in terms of spinoff uses and spinoff development in this area." 

Wilmington spent over half of its economic development "strategic fund" on the $1 million grant, according to John Rago, the mayor's chief of staff for policy and communications. Purzycki and Economic Development Director Jeff Flynn made the decision, which does not require a city council vote. 

The cash balance after this disbursement is approximately $900,000, Rago said. 

The city and state are guaranteed little in exchange for their investment. 

There are no strings attached to the $3 million from the state, which did not sign an incentive agreement with BPG, according to the governor's communications director Jonathan Starkey. There are no documents outlining goals or stipulations on that financial support. 

The city did sign such a contract with BPG regarding its $1 million grant, and it outlines the expected returns on the city's investment. 

It states the city will receive approximately $250,000 in permit fees and $125,000 in wage tax revenue during the project's construction.

The agreement states the complex will generate 43 full- and part-time jobs, with an annual payroll of about $3 million that will generate about $38,000 in annual wage tax revenue. But Buccini said the number of employees working there will actually be much higher. 

BPG is encouraged, but not required, to hire minority-owned or "disadvantaged" contractors for at least 20 percent of the construction work, according to the contract. 

The developer is also urged, but not required, to hire city residents for "game-day jobs" at the fieldhouse for the first seven years of operations, the contract states. Game-day jobs are positions needed when the Blue Coats or other teams play at the facility. 

Buccini said he promised elected officials that the facility will be available to disadvantaged members of the local community, although there is no written agreement that holds him to that commitment.

Purzycki said there was no need for stricter requirements regarding hiring or public access to the fieldhouse.

"We know when (Buccini) says he's going to do it, he'll do it." 

Contact Christina Jedra at cjedra@delawareonline.com, (302) 324-2837 or on Twitter @ChristinaJedra.

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