The San Antonio City Council gave the go-ahead Thursday to use a special tax capture district to buy a downtown site for a new Spurs arena as well as help fund projects at the San Antonio Zoo, Botanical Garden, and Brackenridge Park.
The purchase of the former site of the Institute of Texan Cultures from the University of Texas System is expected to cost up to $60 million and the three other projects would run $10 million each.
After factoring in financing costs, though, the land purchase could end up costing more than $115 million over time and the other three items each closer to $17 million, for a combined $166.3 million.
Those could end up being lower, depending on how long of a repayment schedule is used. The final financing plans still need to come back for council approval.
Councilmembers voted 7-2 with two abstentions to use the Midtown Tax Increment Reinvestment Zone (TIRZ) for funding the four projects, though they also debated when to shut down the TIRZ and start sending its full complement of property tax revenue into the city budget.
Though the vote officially extended the TIRZ’s life from 2041 to 2060, council members tweaked the item to require staff to return with a finance plan that could allow them to wind the TIRZ down before then.
Zones like the Midtown TIRZ can be used to revitalize specific areas in the city by setting a portion of their property tax revenue aside to be spent on improvements or support for development within that same area.
But critics note that sets aside buckets of money for specific areas instead of allowing it to flow into the city budget where it could be used for needs and services around the entire city.
Mayor Gina Ortiz Jones and Jalen McKee-Rodriguez (D2) voted against moving ahead with the funding, while Teri Castillo (D5) and Ric Galvan (D6) abstained.
“In my mind, there’s no other way to say it than as bluntly as, you know, extending this TIRZ, and some of the things that are being considered is the modern-day redlining,” Jones said before the vote.
Explaining her vote to KSAT afterward, Jones said the area, which runs up both Broadway and North St. Mary’s Street and includes the area around Pearl and a portion of downtown, “is no longer blighted.”
She also believes the city could fund the projects, at least partially, without extending the life of the Midtown TIRZ.
When KSAT asked specifically about spending TIRZ dollars on purchasing the arena site, Jones said “public money needs to go for public goods.”
“As I’ve said, their billionaire owners as part of the sports team — they have the resources to do this,” she said.
Though the arena site falls outside the Midtown TIRZ boundary, it’s eligible for funding under an exemption for places of public assembly.
Edward Mungia (D4) said the use of the TIRZ to buy the land had been part of the non-binding term sheet he and other council members approved last year. Furthermore, he said his residents wouldn’t be paying for it.
“The people in Midtown TIRZ are going to be paying from the ITC building, right,” he said. “Now, obviously, there’s an argument to say, ‘Well, that money could eventually come to, long story short.’ But I think that’s the nice part about it is my residents and most of the city are not going to be paying for ITC. It would be the Midtown.”
Staff said they expect to close on the property later this year. Its purchase is separate from the city’s expected $489 million share of the arena’s actual construction.
The Botanical Garden project would be to help with the development of a horticulture campus.
The improvements at Brackenridge would include the restoration of the Sunken Gardens and programming expenses.
The money for the zoo would help with new space, including an animal hospital and expanding west of U.S. 281.
All three require funding matches for the TIRZ money to come into play.
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