76 Place at Market East SEPTA Impact Assessment

Executive Summary

The construction and operation of 76 Place will significantly impact SEPTA. The construction will disrupt SEPTA’s infrastructure and operations, increasing SEPTA’s costs. Achieving a 40 percent transit share for arena attendees will require additional service – the cost of which will not be covered by fare revenue. The proposed changes to Jefferson Station will potentially degrade its usability and its feeling of openness, brightness, and safety, and may not satisfy Federal (FTA) regulators. To make SEPTA whole will require additional funding, and to make Jefferson Station world class the current design will require refinement.

Construction of 76 Place will cause significant disruption and cost SEPTA $22M – $50M During Construction

• The six-year demolition of the Fashion District and construction of 76 Place is a $1.5 billion, large scale construction project. The arena will be built literally on top of Jefferson Station and will clearly cause significant disruption to SEPTA. The downflow financial impact to SEPTA from the disruption will add costs and decrease fare revenues.
• SEPTA will incur direct personnel costs because SEPTA will need to dedicate personnel resources to work with the HBSE development team and to assist the public during the construction phase. Specifically, SEPTA will need to dedicate several full-time equivalents to interface with the construction and development team to represent the SEPTA’s interests during the demolition and build of the arena. In addition, SEPTA personnel will be needed to interact with the public to guide them around construction-related detours and disruptions.
• Construction will inevitably cause delays and disruptions on the SEPTA system, including the partial or complete closure of Jefferson Station for extended periods of time. In addition, construction-related congestion will slow several high frequency bus routes. Delayed trains and buses will mean increased operating times and hence expenses. Slower travel and decreased reliability will reduce ridership—decreasing revenue for SEPTA.
• A recent meeting between HBSE and SEPTA regarding constructability indicated that HBSE indicated that they expect minimal disruption to service. We understand that SEPTA is committed to continuing to work with HBSE to reduce construction impact as plans for the arena progress.
• We estimate that the net cost to SEPTA during the construction period will range from $22 to $50 million in total.

Additional Service to Achieve Arena’s 40 percent transit share will cost SEPTA $20M – $25M Annually

• To achieve the goal of 40 percent mode share for arena patrons, SEPTA will need to provide scheduled service that is robust and attractive enough to satisfy those patrons – significantly more than what would be offered without the arena.
• The additional service leads to a significant added cost, including extra trains and extra support personnel to manage the post-event crowds.
• The extra costs of providing the service are many times the increase in fare revenue resulting from the increased riders on the improved service. On average, fares cover 20 percent of the cost to operate service, and the rest comes from subsidy. This story is consistent with other transit agencies throughout the US. In other words, the fares from additional arena riders do not come close to covering the cost to serve them.
• We estimate that the net increase in operating costs to SEPTA due to 76 Place will be approximately $20 to $25 million per year.
• The Current Design Potentially Degrades Jefferson Station, Harms Ridership, and Risks FTA Rejection
• Based upon the current plans provided to SEPTA, the proposed demolition of the Fashion District and reconfiguration of Jefferson Station will result in a station that is darker, smaller, and more difficult to access and navigate than the current station. We understand that SEPTA will work with the City and HBSE to improve the plans to mitigate this, with some verbal commitments to improve the plans already made to date.
• The proposed reconfiguration of Jefferson Station does not include retail amenities.
• An inferior station design will make achieving the goal of 40 percent transit share more difficult than a better station.
• A diminished station will reduce everyday ridership across SEPTA’s system.
• Once the arena is built it will be essentially impossible, and extremely costly, to modify Jefferson Station.
• The US Federal Transit Administration (FTA) regulations require that changes to Jefferson Station do not diminish the station. It is not clear that the FTA will approve the station design as currently proposed.