Chester wants to tax the Union

Posted: May 16, 2012

This is not the kind of kick envisioned when Major League Soccer decided to locate its newest franchise in the City of Chester.

Desperately seeking revenue, Chester has informed Philadelphia Union officials that it is considering a 10 percent tax on ticket sales and a 20 percent charge for parking at PP&L Park, the team’s home.

The fees could add as much as $2 million to city coffers, but team owners see a “banana kick,” a soccer term for a deceptive shot designed to curve behind a goalie.

“Why would developers and new businesses come to Chester with this type of policy: Tax after you get there,” said Nick Sakiewicz, the Union’s chief executive officer. As part of a special state enterprise zone, the site is exempt from property taxes until next year, but pays the city $500,000 in payments in lieu of taxes.

“It’s catastrophic to our business.”

“It could help us substantially,” said Mayor John Linder, a Democrat elected in November. “We need money. We have to look at every revenue stream.”

“We understand it,” said Sakiewicz. “We don’t believe the way to get out of that challenge is to squeeze the existing businesses in town.”

Linder pointed out that commercial development has been slow to follow significant public investment, which includes over $80 million in the soccer stadium, and the development of the Harrah’s Philadelphia casino at the site of the old Sun Ship yard.

Despite the stadium and casino, the aggregate assessed value of taxable real estate in the city actually declined slightly, from $505.1 million, to $503.8 million, from 2008 to 2010, according to state figures.

The stadium was to be the centerpiece of a $500 million waterfront complex. However, the weakened economy has put a damper on that vision, said Linder, and Sankiewicz said the city’s proposal has put a $10 million office-building project on ice.

“There was a lot of promised development that was supposed to come,” said Rick Eckart, a professor of sociology at Villanova University, “and none of it has been done.”

He said the Chester saga appears to parallel what has unfolded in other cities where public money has been invested in stadiums. “The argument always sounds so good,” he said. “You’re going to give the economy a kick-start, and it never happens.”

“We want to develop,” said Sakiewicz. “We’re afraid to develop now.

“Why would anyone want to build when there could be future taxes after you’ve built something and built your business? The message that it sends is concerning.”

Linder countered: “We want to invite people to come to Chester. And we want them to do business in Chester. We’ve made tremendous progress.”

Linder said that since the original tax and fee agreements were made with a prior administration, they should be subject to reopening.

“This is a brand-new administration,” he said. “Nothing was discussed with this administration.”

He said that such amusement and parking taxes were common in other cities. Philadelphia, for instance, tacks 5 percent on to all amusement tickets, including those for sporting events and concerts. And there is a 20 percent levy on parking.

Linder said that the city bears tremendous expense in police and equipment costs when events are held at the stadium, and that the city would be liable for any worker’s compensation costs if a city employee were injured during an event.

Linder said he planned to meet with team representatives to discuss the proposals.

“We’re partners, we want to treat them as such,” he said. “We’re fortunate to have a stadium here. We appreciate the relationship.

“The bottom line is: Where is Chester economically? How are things here benefiting the city?”

Contact Anthony R. Wood at 610-761-8423 or twood@phillynews.com.

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