San Antonio city council votes for new arena despite push for “strategic pause”
It has been a contentious few days in the city of San Antonio. After several media blitzes and rally speeches from Mayor Gina Ortiz Jones calling for a “strategic pause” of Project Marvel — the downtown restoration project that would include a new Spurs arena — to allow for another independent study, the city council voted 7-4 against the delay after a long meeting. They also voted along the same lines to move forward with the city’s part of the funding and to agree to the nonbinding term sheet the Spurs had laid out days ago.
The terms agreed to include the following:
- 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.”
During today’s meeting, members of the Spurs’ contingent, including Spurs governor Peter J Holt and Sean Elliott, spoke in favor of Project Marvel by pointing out the economic benefits and growth it will bring to the city of San Antonio. Economic specialists and over 100 locals were also permitted to speak for two minutes each at the meeting. Those in favor of the pause and extra study, while not always against the project, were mostly concerned that too much was agreed to behind closed doors and disclosure agreements and sought more transparency.
Ultimately, the pros outweighed the cons for the majority, and with the terms agreed upon, the funding from the city of San Antonio is approved. However, voters will still get a chance to approve or reject the $311 million in venue tax funding from Bexar County during the November 4 elections, so it’s not a 100% done deal quite yet.
In light of the favorable votes today, Holt released the following statement:
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.
If approved, Project Marvel will also include an expansion and renovation of the Henry B. Gonzales Convention Center, a new convention center hotel, residential, retail and park space, a massive renovation of the Alamodome, a land bridge over U.S Highway 281 connecting the Alamodome to the rest of downtown, and the old John Wood Courthouse would be transformed into a large theater and live performance venue. The new Spurs arena would be in the old location of the Institute of Texan Cultures.
