Steamrolled!

The soccer stadium barrels its way into Chester.

by Isaiah Thompson

Illustration by Don Haring, Jr.

Let's say you want to build a stadium. Actually, let's say you want to make money, and you've decided that the way to do that is to own a soccer team. In order for that soccer team to make money, you need to build a stadium for it to play in.

And let's say you like making money more than spending it.

This was the conundrum that faced Keystone Sports and Entertainment LLC, a group of investors including iStar Financial CEO Jay Sugarman, developers Christopher and Robert Buccini and David Pollin of the Buccini/Pollin Group, and former Philadelphia School Reform Commission Chairman James Nevels — we'll call them The Team — who, in early 2007, began looking to build a soccer stadium, and to coax a Major League Soccer team to move in.

Of course, stadiums require land. But land is expensive, and it usually comes with other hassles, too: taxes, neighbors, community groups, politicos seeking a cut of the action. If only there were some piece of ground as cheap as the dirt it sits on, situated in a city that wouldn't tax the owners, where politicians would gladly make a sweetheart deal and neighbors weren't likely to raise much of a fuss — or, if they did, weren't likely to be listened to.

Welcome to Chester.

A once-booming industrial center just outside Philly, the city of Chester has fallen on hard times. The unemployment rate is high, the education rate low. The city's downtown is largely shuttered, and the only businesses that seem to thrive are corner shops and dollar stores. Undoubtedly the most publicized sign of the 37,000-person city's struggles is the oft-mentioned but not-yet-remedied fact that the city does not have a single supermarket.

Chester also possesses a largely abandoned waterfront on the Delaware, left barren after the industry that built the city pulled up and left for good. The revitalization of that waterfront has become a city goal, and in order to attract development, the state designated the land a "Keystone Opportunity Zone" — meaning that its owners don't have to pay taxes on it for 12 years.

It was here The Team decided to build. The site it chose is a 12-acre parcel located on a portion of the Chester waterfront that's been used for all manner of heavy industry, which left the land contaminated. The entire swath is a "brownfield" — contaminated, but available for redevelopment. In building the stadium, The Team has promised to clean it up.

Of course, The Team still needed money to build its $115 million stadium. If only there were some rich uncle who'd pony it up for them, and not ask too many questions.

Enter Gov. Ed Rendell, who, in August 2007, first voiced his support for a stadium in Chester and began seeking state money for the project, telling the Inquirer that a stadium could "transform the city."

The state legislature, though, resisted Rendell's overtures, with some members arguing that building a soccer stadium with tax money was a bad investment. State Rep. Thaddeus Kirkland, who represents Chester, pointed out that Chester could use a grocery store more than it could a soccer stadium.

Around this time, the proposal changed. By September, The Team had begun to talk about the stadium as the mere "anchor" of a much larger project that would include retail, office and residential components — worth $300 million of investment in Chester. By January 2008, the project had grown more ambitious still: The investment figure had magically risen to $414 million, and The Team began dangling the ultimate prize: a supermarket.

The use of public money to build stadiums has become commonplace, despite evidence that taxpayers often don't favor it, and despite a growing body of research by economists that says the stadiums are almost always — if not always — a bum deal.

But the promise of the mixed-use site in Chester meant that developers wouldn't just be hoping for the stadium to spark economic activity. They were promising to build it themselves.

Meanwhile, the pressure was on: Major League Soccer commissioner Don Garber brazenly declared that a new MLS franchise was considering choosing St. Louis as a home over Philly, and would stay in Pennsylvania only if the state coughed up big money, quick.

In February 2008, the state — or, rather, Gov. Rendell — came through, proposing $47 million in money pieced together from various smaller grants that required no legislative approval whatsoever.

Within weeks, Major League Soccer announced it would award a franchise — the team that would later be dubbed the Philadelphia Union.

Last December, a throng of politicos, developers, investors and ecstatic fans gathered on a wide, vacant lot on the Chester waterfront and cheered as ground was broken for the region's first MLS stadium.

More money fell into place. This January, the Delaware County Council voted to put a whopping $30 million toward the project, about one-quarter of it coming from the city of Chester itself. Then the Delaware River Port Authority (DRPA) announced it would contribute $10 million.

Construction has proceeded dramatically since, as developers hurry to meet the Philadelphia Union's target opening date of spring 2010. Already, the once-barren plot of land south of the Commodore Barry Bridge is chaotic with construction materials.

The parcel of land adjacent to the stadium, however — the one which is supposed to become a mixed-use development, including a supermarket — remains bare. In theory, that's according to plan: The stadium — the "lynchpin" of the project — was always supposed to be built first.

But research by City Paper raises questions about whether that part of the project will ever be built, at least along the lines promised,and whether the public will get what it paid for.

Though the vast majority of the benefits the Chester development is supposed to bring are associated with the mixed-use parcel, virtually all the public money allocated to the project is going straight to the construction of the stadium.

The state agencies awarding the millions appear, in some cases, to have failed or declined to ask basic questions about the economic benefits being promised.

Contamination on the site where the mixed-use development is to be built raises questions about whether delivering the promised amenities is even economically feasible.

And the very developers expected to build the mixed-use site — the principals of the Wilmington-based Buccini/Pollin Group (BPG) — are part-owners of the soccer team, providing a potential disincentive for them to allocate any of the public money toward anything but the stadium, from which they hope to profit.Will The Team deliver on its promises? Or has the public — the city of Chester, in particular — been duped?

By: Mark Stehle THE GREEN FIELD: Green money, that is. All the revenues from the publicly financed stadium will go to a private ownership group.

For the residents of Chester, concerns about the environmental implications of building on contaminated land take precedence right now over funding issues.

No one denies that the stadium site is contaminated. Soil samples have revealed the presence of lead, arsenic and chromium VI in levels that exceed statewide safety standards; samples of the shallow groundwater indicate the presence of various volatile and semi-volatile organic compounds — pollutants that can cause cancer and other maladies.

From one point of view, that's all the more reason to build there. The developers will clean up the site and transform a wasteland into something usable — profitable, even.

But the residents of Chester are more wary. Any activity on contaminated land introduces the possibility of those contaminants reaching humans, whether by airborne dust, direct contact (a particular concern for on-site workers) or other myriad ways: Hazardous materials can seep up via the root systems of trees, for example, or surface in the form of vapors. In Chester, there's a history of hazardous material finding its way to humans. In 1978, in the worst environmental disaster to befall Chester in recent memory, an illegal chemical dump known locally as the "Wade dump" caught fire, exposing and eventually killing many of the firefighters who showed up to fight it.

Does the current work on the stadium pose a threat? City Paper spoke with Pennsylvania Department of Environmental Protection (DEP) officials, reviewed hundreds of pages of records and reports, and cross-checked information with knowledgeable outsiders in an effort to understand what, exactly, it takes to properly clean up a piece of toxic land.

The Buccini/Pollin Group is "remediating," or cleaning the site through the DEP's Land Recycling Program — better known as "Act 2" — which allows developers to establish "site specific" cleanup standards based on the intended use of the land.

The process is voluntary. The developers choose the standard to which they will clean the site, then ask the DEP to confirm that they've attained it. Once given the stamp of approval, any liability for pollution on the site goes from landowners to the state.

The DEP appears to be doing a thorough job making sure the stadium developers comply with the cleanup standards they've set for themselves. And the solution proposed by the developers appears to be a safe one.

BPG has proposed to remediate the stadium site essentially by capping the whole thing with a layer of clean soil or, more likely, an impermeable surface like asphalt or concrete. This method has obvious drawbacks — the contaminants themselves remain, able to seep through the soil into groundwater, and through the groundwater into bodies of water like the Delaware.

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But no one gets their water from the Delaware. And if the contaminants in the soil are covered in concrete, no one can touch them, or eat them, or inhale them. This may not satisfy environmentalists, but it satisfies Pennsylvania law.

"If you eliminate the pathway," explains Walter Payne, who oversees the Land Recycling Program for the DEP's Southeast Regional Office, "if you prevent any contact with the soil, there can be no exposure. And if there's no exposure there can therefore be no risk."

Payne, who's overseen dozens of Act 2 projects, says he's fairly confident that the developers' plan for the stadium will accomplish this.

But City Paper also found reasons the public might want to keep its eyes on this project. While the developers appear to be headed toward meeting the cleanup standard they've set for themselves on the stadium site, it hasn't always been smooth sailing.

In January 2007, consultant Weston, on behalf of BPG, submitted a draft of a cleanup plan for the stadium. But the DEP rejected the document, saying that the consultants had failed to fully investigate the site. When told they should sample the site's deep groundwater, for example, Weston simply referred the DEP to data collected by another company, 11 years prior, on a different piece of property, that showed no contamination.

Steve Johnson, senior project manager for Weston, pooh-poohs the DEP's questions. "The state is asking that question just to check a box off," he says of the groundwater dispute.

And Payne, who ultimately will decide whether to award the site Act 2 status, concedes that he doesn't believe the site will ultimately pose any threat to the humans who use it.

Still, more than half a year into construction, the developers have yet to get their cleanup plan approved. Why is it taking so long?

The answer likely has to do with money. Drilling holes to sample the deep groundwater is expensive; so is collecting extra samples, preparing extra reports, etc. — all the stuff the DEP is asking the developers to do.

"This happens in every Act 2 report," Payne says. "Do I need a Cadillac or can I get away with a Chevy?"

But even if it's not unusual for a developer to be, let's say, thrifty, one wonders what that means for the mixed-use portion of the project —because that site, on which residential facilities are supposed to be built, is substantially more contaminated than the stadium parcel.

Once home to an oil company as well as a chemical manufacturing plant called Chem Clear, the site has been subject to years of close contact with potentially harmful products. A previous investigation cited some 55 reported spills on the former Chem Clear site, including about a thousand gallons of oil. One portion of the site features a subterranean "plume" of petroleum resin. The concentration of hazardous organic liquids in the area is serious enough that a "bioslurping" system was installed to continuously pump the contaminants out of the site's groundwater. The soil contains the highest elevations of several harmful soil contaminants in the entire project area.

That's not to say the site can't be cleaned, but doing so may be more expensive than cleaning the less-polluted stadium site. Which makes it particularly striking that nearly every penny of the tens of millions in public funding is going straight to the stadium.

Almost all of the $87 million in state, county and city funding going into the "Chester Waterfront Redevelopment Project" is earmarked specifically for work on the stadium. According to Michael Hare, BPG senior vice president, fully $45 million of the $47 million in proposed state aid is for the stadium parcel; all of the $30 million coming from Delaware County and the city of Chester is going toward the stadium, as well. (So far, The Team has assembled $32 million in five state grants, with applications for the rest of the state funding pending.)

True, the stadium has from the start been described as the centerpiece of the waterfront redevelopment. And true, the spring 2010 deadline isn't far away.

But that doesn't explain why so much public funding is directed solely at the stadium. And it doesn't reflect the language used to get that funding, either.

City Paper reviewed six applications for state grants and low-interest loans, totaling $34 million, all filed by the Chester Redevelopment Authority (CRA), which disburses funds to the developers. In all but one, descriptions of the so-called "Chester Waterfront Redevelopment Project" include not just the stadium, but the other facilities promised.

For example: In a successful application for a $2 million grant from the Department of Community and Economic Development (DCED), the "Project Narrative Summary" includes offices, retail developments, residential units and a convention center. But the money itself is being used to fund excavation and cleanup for the stadium site alone. An application for another $2 million for the DCED's Housing and Redevelopment Assistance describes the same amenities, including 225 apartments and 186 townhomes, but the grant is being used to pay for the costs associated with a water and sewer system for the stadium.

Only the $10 million from the Port Authority is earmarked specifically for the adjoining parcel. It's to be used for "infrastructure" — but whether that infrastructure will be for office buildings, houses and shops, or just for the stadium, is not clear. DRPA officials say they are currently "in negotiation" over the terms, and decline to give specifics.

None of the money obtained or being requested from state coffers is being directed toward completion of the rest of the project. When asked whether anyone would apply for additional funding for the multi-use site, CRA executive director David Sciocchetti replied that "no one has indicated that they have any expectations of that at this point in time."

It's important to remember here that the mixed-use component of the stadium project was promised for a reason. It, not the stadium itself, was supposed to be the true windfall for Chester.

The stadium's supporters, of course, emphasize the benefits the stadium would bring to Chester through sheer magnetism —hotels, restaurants, that intangible sense of momentum.

But that's an old line.

"They say, 'If we build it, those things will come.' They say it in every city and it never happens," says Villanova sociology professor Rick Eckstein, co-author of Public Dollars, Private Stadiums, a critique of taxpayer subsidies for sports parks.

Recently, Eckstein says, economists and scholars have begun to catch on. So stadium backers have had to change tactics. "The only way politically to do this now is to have a larger project," Eckstein says. "Now it's stadiums, plus convention centers, plus commercial — they're very careful to say that it's not just the stadium, it's the whole thing."

Indeed, in applying for public money for the Chester Waterfront Redevelopment Project, The Team promised very specific economic benefits — namely, jobs and the leveraging of hundreds of millions of dollars in private investment.

And most of those benefits are associated not with the stadium, but with the mixed-use development.

Take jobs. Several of the grant applications (not to mention newspaper articles about the project) include the claim that the development will create 360 post-construction, full-time jobs. But when asked in a recent conversation how many of the projected jobs the stadium itself would create, BPG's Hare estimated "about 50." Percent? "No. Fifty jobs." The part of the project receiving the bulk of the funding is creating a small percentage of the promised jobs.

Or take this number: $414 million, the total investment the Waterfront Redevelopment Project is supposed to bring to Chester.

Like the oft-mentioned but little-explained 360 jobs, the $414 million investment is cited everywhere from grant applications to newspaper articles to politicians' speeches. Its significance is obvious: Spending $87 million to leverage a total investment of $414 million — not such a bad deal, right? But, again, most of that figure comes from the mixed-use development. Take that out of the equation, and the public's money leverages only another $30 million — the remainder of the cost of the $115 million stadium. For this to be done the way it was promised, developers will need to produce $300 million more. Three hundred million.

Say the mixed-use development isn't, in fact, built. The public will have paid for nearly three-fourths of the entire cost of the project — a project whose profits go entirely to private team owners.

When asked about this paradox — why the part of the project yielding the least public benefits is the best-funded — CRA's Sciocchetti simply referred me to the state. "These are state funds. The state determined where they went," he said.

He's got a point: Letters dating back to late 2007 show that Gov. Rendell made clear to The Team what specific purposes their grants might be used for. Nowhere does he specifically mention funding the mixed-use development. At least two state agencies, the DCED and the Office of the Budget, were similarly aware that their grants were going solely to the stadium.

So why did the state, which presumably wants to see the proposed benefits of this project realized, sign off on funding for the stadium alone? And was it even interested in knowing whether the stadium was a good investment?

It doesn't look like it. In the case of one grant, a handsome $25 million from the Office of the Budget's Redevelopment Assistance Capital Program, an outside consultant was hired to evaluate the project. In notes from the ensuing meeting with The Team, the consultants reported back that "economic numbers specific to the stadium are not available." In an otherwise-detailed list of results, they left the "Economic Impact" section oddly blank, writing only that "The Office of the Budget will advise if further information is needed."

The grant, the Office of the Budget acknowledges in a statement, "encompasses only the construction of the soccer stadium," adding that the project's other supposed components — and whether they are ever built — have "no ramifications on the RACP grant."As for the economic figures "not available" from The Team, the Office of the Budget says it will require, at some unspecified point, that the figures be submitted in writing. To what purpose isn't clear: The grant has already been awarded.

Right now, despite a timeline submitted by the developers which said construction of the mixed-use site would be under way by the first and second quarters of 2009, there is little to no sign of the project as it has been described to the public.

The developers have yet to submit any notice of intent to remediate — the formal beginning of the cleanup process — let alone provide work plans for the site. If they have secured any funding for the mixed-use portion of the project, they certainly haven't announced it.

According to Hare of BPG, the plans haven't changed, they've just been delayed ("I don't know if you've heard anything about the economy lately?" Hare said over the phone). He added that designs are under way for an office structure that would annex a building on the opposite end of the property, which BPG developed and already owns.

But other than that, only one clear detail has emerged about the immediate future of the mixed-use site: At the recent meeting in Chester, Hare informed the audience that the current plan calls for the space to serve as a temporary parking lot for the stadium.

Meanwhile, there are other signs that the powers that be are distancing themselves from the mixed-use site.

Nick Sakiewicz, CEO of the ownership group for the Philadelphia Union, spoke often and exuberantly about the project's mixed-use component last year. Now the group isn't showing initiative in pushing it forward. Says CFO David Debusschere, "We can't speak to the [mixed-use site]. ... We can't speak to timing, development, anything like that."

Debusschere referred me back to Hare. Since then, repeated attempts to reach Mr. Hare by phone and e-mail have gone unanswered.

Could The Team get away with not building the rest of the project at all?

They certainly don't have to spend stadium revenues on it: The lease stipulated between the county authority that owns the stadium and the private group that owns the team allows the latter to keep all revenues from ticket sales and concessions.

Hare has repeatedly said that his company will be required by contract to pay back $30 million to Delaware County if the mixed-use project isn't built.

But that claim is contradicted by Delaware County Solicitor John McBlain, who says that no such provision exists. "We don't have any callbacks on the associated development," he says. The county's security, McBlain says, comes from the fact that it will own the stadium — a stadium built specifically for a sport whose U.S. popularity is still nascent, on contaminated soil, abutted on either end by worse contamination, in a city without a grocery store.

Neither Hare nor McBlain returned calls asking for clarification on the agreement between BPG and the county; a right-to-know request for the document itself has so far been unsuccessful.

Asked how he could be sure the project would be finished, Sciocchetti of the CRA says that, as owners of the mixed-use site, the Buccini/Pollin Group couldn't afford not to build it. "The BPG folks don't make money on the stadium, except for handling parts of the construction," Sciocchetti said. "So there is a self-interest on the part of BPG to build out the rest of the project. ... They don't make money by leaving a piece of vacant ground sitting there."

But that's not necessarily true. BPG's owners hold interest in the soccer team itself (some of which they obtained recently by trading small portions of the mixed-use site for use in building the stadium, Hare says). Their incentive for finishing the stadium is obvious.

Not so with the mixed-use site. The economy's bad, after all. And the land the site would sit on — which they purchased for about $30 (not a typo) — is currently tax-exempt, which means it costs them nothing to leave it empty.

Of course, there are plenty of Pennsylvanians who are thrilled that the stadium is being built, not because of any return on investment, not because of the revitalization of the Chester waterfront, but because they like soccer.

Retail, commercial, residential project or not — supermarket or not — come next year, they'll be able to see the Philadelphia Union play in a brand-new stadium. In fact, the Port Authority is building two convenient new ramps for them to get there — they can hop on 95, get off at a brand-new exit, enter a parking lot and bypass downtown Chester completely.

(isaiah.thompson@citypaper.net)