The City of San Antonio is moving forward in its negotiations with the San Antonio Spurs on funding a new downtown arena after an hours-long Wednesday meeting.
It was not easy to get there.
Council members listened to six hours of reports and public comments before three hours of discussion among themselves, ultimately choosing to continue negotiations with the Spurs despite Mayor Gina Ortiz Jones and several others asking to slow the process down.
Though Jones called for a pause in negotiations, the majority of council wanted to move forward, asking City Manager Erik Walsh to work toward drafting a non-binding agreement with the Spurs this month.
The marathon meeting revealed more details about where the funds would come from to pay for the $1.3-billion to $1.5-billion arena, a central part of a proposed downtown sports and entertainment district also known as Project Marvel.
The basketball arena would be funded by Bexar County, the City of San Antonio and the Spurs. On Tuesday, Bexar County commissioners decided to ask voters whether to increase a tax on local hotel bills to pay for its portion of the project. If voters in November pass the proposition, the county will contribute up to $311 million toward the development of the arena.
The Spurs have said they will commit $500 million for construction and to cover cost overruns on the new arena, as well as guaranteeing millions for surrounding development and additional community benefits.
The city would be on the hook for between $350 million and $500 million; the exact amount will be decided later this month, Walsh said.
The Spurs’ chief legal counsel Bobby Perez and city staff told council members at the meeting that the Spurs plan to backstop the city’s portion by guaranteeing $1.4 billion in surrounding development.
That information wasn’t enough for some council members, and Jones tried to pump the brakes on the negotiation process to get more data on the arena project, but a majority of council members wanted to see a term sheet, or a list of non-binding requirements for any arena funding deal to move forward.
A rendering of the San Antonio Sports and Entertainment District. Credit: Courtesy / Populous
Jones also stood by her call for the NBA team to share some of its revenue with the city, which was a non-starter, according to Perez.
A report on the project’s economic impact was conducted by Stone Planning, a Chicago-based firm employed by the Spurs. That analysis indicated that a new arena could create $225 million more in direct spending every year.
It also concluded that just more than 100 new jobs would be created each year and that a majority of income increases would go toward Spurs players. The city would also add almost $500,000 in annual tax revenue from a new arena, according to the report.
Walsh said he would continue negotiations, with an eye toward the Aug. 21 deadline the city has set for a deal, while exploring an independent economic analysis of the new arena.
Later, Jones clarified that she was not against the project.
“You didn’t hear a ‘no’ up there. You certainly didn’t hear a ‘no’ from me. Let’s get more information so we’re all on the same page,” Jones told reporters after the meeting.
Spurs offer more money
For the first time in the city negotiations, Perez stepped up to answer questions for the Spurs in public.
The Spurs had previously guaranteed $500 million worth of development around the arena, whether from the team or private developers, by 2031. Perez upped the ante and said the Spurs were willing to guarantee — or be on the hook for — another $900 million in surrounding development through 2042 for a total of $1.4 billion the next 17 years.
That money is important because the city is raising its portion of the money by borrowing against future tax revenues and arena leases in the Project Marvel area.
However, both the Spurs and city staff clarified that any deal reached between them would not be binding until the countywide vote. If voters don’t approve the $311 million in county funding, that could change the entire arena deal.
Bobby Perez, Spurs Sports and Entertainment’s chief legal officer and general counsel, takes notes during a Commissioners Court meeting at the Bexar County Courthouse on Jan. 7. Credit: Brenda Bazán / San Antonio Report
Timing-wise, the Spurs and the city hope to figure out the term sheet in the next week or so, Perez added.
Numbers-wise, Jones pointed out that the deal may still fall $189 million short.
Right now, the city’s ($500 million), Spurs’ ($500 million) and Bexar County’s ($311 million) proposed funding adds up to just over $1.3 billion, and the arena may cost more than that.
Perez said that’s something the Spurs would have to figure out in the next week, but he reiterated that the team would commit to cover cost overruns. Once the city and county numbers are set, Perez said, the Spurs would be on the hook for the rest.
“If that’s all you’re going to put in, $500 million, then the rest is on us,” Perez said.
Jones asked twice whether the Spurs would consider revenue-sharing, calling for the city to get a slice of naming rights, concessions and ticket revenue to help its general fund.
“Revenue-sharing is when they get theirs, we get ours,” she said. “When that money comes in, we get a cut. So why would we not ask for that?”
Perez said that was something the Spurs would not be figuring out.
While the NBA allows revenue sharing, he said, the Spurs would not agree to include it in the deal. The team was borrowing money to help build its portion of the arena, he said, and needs to be able to pay back that money.
“Revenue-sharing is not feasible because of the framework of the deal,” he said. “We need our revenue to support the debt that would occur.”
Perez said the Spurs would also be operating the arena themselves at a cost of roughly $25 million annually.
Council members divided
A majority of the council was interested in seeing a term sheet by Aug. 21. Council members March Whyte (D10), Phyllis Viagran (D3), Misty Spears (D9), Ivalis Meza Gonzalez (D8) and Marina Alderete Gavito (D7) were on board early.
“I would take this [term sheet] tomorrow if I could,” Viagran said. “I don’t think this needs to slow down at all.”
Jones challenged that position. She wanted more information.
“I think we need to take a strategic pause,” she said during the meeting.
Jones wanted to know more about the reports that have been produced about the new arena, including the assumptions they made when calculating future spending.
She said it was important for residents to know how else downtown land could be used and how much the other parts of Project Marvel — including improvements to the Convention Center and the Alamodome — might cost voters.
“There’s some real gaps in the analysis,” Jones said after the meeting. “There’s no harm in taking another 60 days, 90 days, to do the independent economic analysis so that we are all comfortable.”
Council members Teri Castillo (D5) and Leo Castillo-Anguiano (D2), who is filling in for Jalen McKee-Rodriguez, both agreed with Jones, while Sukh Kaur (D1) and Edward Mungia (D4) asked to move forward with negotiations after asking several questions.
Architects and developers meet following a presentation on the planned San Antonio Sports and Entertainment District, also known as Project Marvel, in March. Attendees were given maps for a self-guided tour of the Hemisfair area and project location. Credit: Scott Stephen Ball for the San Antonio Report
Castillo was concerned that CSL International, the firm that presented an economic impact analysis, was too pro-development, and said one CSL’s owners was a sports and entertainment company. CSL’s speaker at the meeting, John Kaatz, said his work only briefly mentions the arena and said he did not alter numbers to meet a certain goal.
Castillo, Ric Galvan (D6) and Castillo-Anguiano were also concerned about workers’ opportunities.
“I’d rather slow the negotiation process so we can make sure our downtown hospitality workers are up to livable wages,” Castillo-Anguiano said.
Council members also called for more public input going forward, especially around crafting a community benefits agreement with the Spurs, and highlighted the issues with community engagement when Project Marvel was first presented to the public in 2024.
Public sentiment mixed
A majority of the city council’s Wednesday meetings were taken up by public comment — much of it negative.
The opposition stretched from residents concerned about the economic reports released by the city and the Spurs to those against the project altogether.
“This study tells us nothing about the opportunity cost of the public funds, what could be done instead,” said Trinity University Professor Christine Drennon, who focuses on urban geography and community development.
Graciela Sanchez speaks while members of No! Project Marvel stand behind her with signs outside of the Alamodome during a protest on Monday. Credit: Diego Medel / San Antonio Report
Earlier in the week, a group called No on Project Marvel criticized the arena during a Monday protest.
“No usan dinero de la ciudad,” said Araceli Herrera, an organizer with worker group Domesticas Unidas, on Monday. “No queremos un estadio.” Herrera commented again on Wednesday in front of the City Council. She was one of several domestic and hotel workers who worried that the jobs created by the arena and surrounding development might pay too little.
Proponents of the arena who spoke felt it would bring economic activity and jobs to the area, which they said have broad positive impacts.
“That money doesn’t stay downtown, it goes to all corners of the city,” said Jeff Webster, president and CEO of the Greater San Antonio Chamber of Commerce.
The public will, ultimately, get their say on how the arena is funded in November, when Bexar County’s portion of the money will be on the ballot. Perez said part of the reason the Spurs want to move forward quickly is to help get voters information.
“I appreciate the process and our company appreciates the opportunity for the voters,” Perez said.