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SAN ANTONIO – The San Antonio City Council has approved a funding deal for a $1.3 billion Spurs arena after shooting down the mayor’s request for a pause.
In a meeting packed with business leaders, community groups, Spurs officials, and even Spurs legend Sean Elliott, city council members voted down Mayor Gina Ortiz Jones’ proposal 4-7 without any discussion, apart from the mayor’s comments.
The group then spent an hour and a half discussing the non-binding terms, which were negotiated by city staff and Spurs officials and would serve as the framework for future contracts, before passing them 7-4 along the same split.
Jones had asked to hold off considering a funding deal until the city had received an “independent” economic impact report and held two community feedback meetings in each district.
Leo Castillo-Anguiano (D2), Teri Castillo (D5), and Ric Galvan (D6) voted with the mayor in requesting a pause and then against approving the terms.
Sukh Kaur (D1), Phyllis Viagran (D3), Edward Mungia (D4), Marina Alderete Gavito (D7), Ivalis Meza Gonzalez (D8), Misty Spears (D9), and Marc Whyte (D10) voted in the majority against her pause and for the terms.
(See the full term sheet at the end of this article)
The proposed NBA arena at the site of the former Institute of Texan Cultures Building in Hemisfair is a key part of Project Marvel, the city’s plan for a wider sports and entertainment district.
Jones has been pushing for the past two weeks to pump the brakes with a “strategic pause.” She was in the clear minority when she first asked for it at an Aug. 6 meeting.
Since adding the vote to the meeting agenda Sunday night, Jones has turned up the pressure on her fellow council members through a press conference, social media posts, a blitz of media interviews, and even crashing a rally by supporters of a deal.
“I feel very strongly about this because I want us to be successful,” Jones said during the meeting. “I want our community to revitalize our downtown. I want to make sure the Spurs stay in San Antonio for as long as possible. I do want to make sure — and I think that is best accomplished when folks have feel like they have all of the data and feel like they have been brought into the process.“
The current economic impact study on the arena was done by a consultant hired by the Spurs, Stone Planning. It estimates there will be $318 million more in net spending in a year within the city and $333 million countywide tied to a new Spurs arena and ongoing operations at the Frost Bank Center.
The city’s consultant, CSL International, only reviewed the summary findings of Stone Planning’s report and did not conduct its own analysis. CSL is also owned through another company, Legends, by Sixth Street, an investment firm that also owns a minority stake in the Spurs.
The business community and others supporting the terms say it’s a good deal that doesn’t rely on the city’s regular budget and the time is ripe to approve it.
“To use a basketball term, we have to shoot our shot. And you got to shoot the score, folks. And San Antonio stands to score big over the next 30 years and beyond,” said Metro San Antonio Chamber of Commerce President and CEO Brett Finley.
A vote on the county’s share of the funding is already on the Nov. 4 ballot, and the overall funding deal is contingent upon voters passing it.
Critics of the deal questioned the use of public dollars and the amount of time the plans had been public.
Spurs Sports & Entertainment Chairman Peter J Holt told Jones Thursday he believed there is “tremendous data” and “tremendous opportunity” for an awareness campaign ahead of a November vote.
When Jones pressed Holt to answer “yes or no” whether the Spurs opposed the city holding off, Holt stuck to similar talking points. While there was loud applause, voices from the crowd also called out “answer the question” and “you’re a coward.”
More than 100 people signed up to speak on Thursday, and a standing room crowd frequently broke into applause in support of the parade of speakers from their respective sides.
Term Sheet
The draft of the non-binding term sheet on Thursday’s agenda includes:
- TOTAL COST: Approximately $1.3 billion
- SIZE: 17,000 to 18,500 capacity
- OPEN BY: 2032-2033 NBA season
- SPURS CONTRIBUTION: At least $500 million, plus any costs in excess of city and county contributions
- CITY OF SAN ANTONIO CONTRIBUTION: Up to $489 million or 38% of the arena cost, whichever is less, financed through Spurs lease of the arena, ground leases by developers and tax capture zones for local property tax and hotel-related state taxes
- BEXAR COUNTY CONTRIBUTION: Up to $311 million or 25% of the cost, whichever is lower, from the venue tax, subject to voter approval
- 30-YEAR LEASE: Spurs to pay $4 million in rent (increasing 2% every year), and includes a non-relocation agreement for the term of the lease
- SITE PURCHASE: The city would buy the site of the former Institute of Texan Cultures building from the University of Texas System, which it has previously estimated would cost $60 million
- HOME-AWAY-FROM-HOME GAMES: “Spurs will have the ability to play home games at international sites and other neutral sites as required by NBA rules and regulations and up to four home games outside the Arena but in the Spurs’ home territory (which may include the Alamodome).”
- NEW DEVELOPMENT: Spurs and private developers to create $1.4 billion of new development over 12 years, including housing, hotel, retail and offices
- COMMUNITY BENEFITS: Spurs to pay $2.5 million annually for a total of $75 million throughout the 30-year lease, with funding allocated by city council
- ENTRY CITY WAGE: Full-time employees at the arena would be paid at least the city’s entry wage
- COVERING FEDERAL PROPERTY PURCHASE: The Spurs will pay up to $30 million to help the city buy federal property near the arena site
- NO REVENUE SHARING: Jones has asked about revenue sharing, but Spurs officials have said they aren’t open to it under the current structure
- MID-LEASE RENOVATION REQUIRED: Future binding deals will include obligations to renovate the arena between the 13th and 15th year of operations, “subject to the Parties’ agreeing on a funding mechanism.”
250821 Draft Term Sheet by Rebecca Salinas
Spurs statement
Holt released the following statement on Thursday after the votes:
“Today’s vote is an important step forward for San Antonio. I want to thank the members of City Council, the City staff and County for their leadership, diligence and collaboration in helping us reach this point.
This project is about more than an arena. It’s about pride in who we are as a city and belief in what San Antonio can become. The Spurs are investing over $2 billion because we believe in San Antonio’s future. That includes a $500 million direct contribution toward the arena, covering 100% of cost overruns, guaranteeing $1.4 billion in private development and $75 million in community benefits. There will be no impact on local residents’ taxes and no money diverted from the city’s general fund.
This will be a true public-private partnership. The arena will be publicly owned, funded by visitors, and built to revitalize our downtown, create jobs and give future generations a place to celebrate together.
Now, the next step belongs to the people of Bexar County. On November 4, voters will have the opportunity to decide on this project, and we are hopeful they will join us in saying yes to the future of our city.”