The San Antonio City Council voted down Mayor Gina Ortiz Jones’s plan to “pause” negotiations on Project Marvel Thursday — paving the way for a second vote on supporters’ plans to forge ahead with a deal.
Still to come this afternoon, they’ll vote on whether to authorize City Manager Erik Walsh to execute a “nonbinding term sheet” indicating that the city would commit to providing $489 million for a new downtown Spurs basketball arena.
Jones had been calling for the City Council to hold off on that move until it could procure an “independent” economic analysis and do proper “due diligence” on such a sizable investment.
Currently the only analysis that exists was produced with data provided by the Spurs, by a company with business ties to the team.
“Due diligence is not anti-progress, it is anti-poverty,” said Jones, who during her mayoral campaign repeatedly pointed to the Alamodome as a failure of past leaders who made decisions based on “hope” and failed to deliver the city an NFL team.
“We have seen in our community the times where we have not necessarily done our due diligence, and we can see the impacts of those each day,” said Jones, who put a resolution on Thursday’s agenda calling for the independent analysis and two public input meetings in each council district to be completed before voting on the term sheet.
Despite Jones’ public pressure on fellow council members, they voted 7-4 against it.
Progressive council members Teri Castillo (D5), Ric Galvan (D6) and Leo Castillo-Anguiano (D2) sided with the mayor, while Councilman Edward Mungia (D4), an ally of Jones, sided with the more business-friendly members on their dais, Sukh Kaur (D1), Marc Whyte (D10), Marina Aldrete Gavito (D7), Misty Spears (D9), Ivalis Meza Gonzalez (D8) and Phyllis Viagran (D3).
District 4 Councilmember Edward Mungia listens to comments from the public about Project Marvel on Thursday. Credit: Amber Esparza / San Antonio Report
The vote followed two weeks of repeated disagreements between council members and the mayor on policy-making procedures, committee assignments and decorum in public meetings.
At Thursday’s meeting, 109 people signed up to speak on the issue — and many more packed into the council chambers to observe and cheer their respective allies.
Supporters and opponents alike grew heated as Jones called on Spurs chairman Peter J. Holt, asking three times whether the team would be OK with the city taking time to conduct its own economic analysis to check the work.
Holt didn’t say yes — and he didn’t budge. The Spurs were confident in the data they had produced, he said, and wanted to move forward with their investment in the arena and in the surrounding downtown area.
“We feel like there’s tremendous positive data that shows this project, this arena, is going to be great for San Antonio, and that’s why we’re willing to make an historic investment in our community,” Holt said, to cheers from the audience.
At the same time Jones was calling for a pause, council members who support the proposed downtown entertainment district were pushing hard to move forward with a deal.
Many of them had served on the council or worked at the city throughout the past two years of negotiations, and believed it was past time for the city to formalize its commitment to the Spurs.
The team’s owners have committed at least $500 million for arena construction, and to bring in development around the arena with $1.4 billion in taxable value.
That would help the city maximize the Project Finance Zone surrounding the arena, which allows it to collect the growth in state taxes from hotels and businesses within a three-mile radius.
San Antonio plans to use that money to double the size of the Henry B. Gonzalez Convention Center and pay for improvements to Alamodome, which city leaders say they couldn’t afford otherwise.
Hours after city staff completed negotiations with Spurs ownership over the weekend, five council members urged Walsh to put the term sheet on Thursday’s council agenda to move ahead with those plans.
San Antonio Spurs Managing Partner Peter J. Holt talks to community members during a recess before the council’s first vote Thursday. Credit: Amber Esparza / San Antonio Report
That vote is still to come at Thursday’s meeting.
Broadly speaking, the term sheet says that the city will contribute $489 million to the arena, Bexar County will contribute $311, and Spurs will pay for the rest of the arena costs, including any expenses beyond the initial $1.3 billion estimate.
The city will own the arena and the Spurs will have the exclusive naming and advertising rights. The agreement also includes a nonrelocation agreement, meaning the Spurs can’t move to another city until 2062.
A done deal?
Though the term sheet is nonbinding, Thursday’s meeting could be among the last major public votes on the city’s commitment to the Spurs arena.
The city’s contribution to the arena doesn’t require a public vote because it comes from a mixture of state and local tax reinvestments and revenues from leasing the arena and the land around it. City officials said they are borrowing against that mixture of funding sources, which are already voter-approved.
Voters will be asked to approve Bexar County’s $311 million contribution in November — as well money for improvements to other county-owned buildings like the Spurs’ current home on the East Side, the Frost Bank Center.
Walsh told reporters that if the county votes fail, the Spurs will have to decide whether there’s still a path to relocating from their existing home at the East Side’s Frost Bank Center. The team’s lease there runs through 2032.
“That’s a question for the Spurs,” he said Wednesday. “The term sheet assumes the county would contribute $311 million.”
If the county’s ballot items are successful, San Antonio plans to ask voters for a bond election as early as May of 2026 to fund some streets and infrastructure surrounding the sports and entertainment district — as well as other bond projects across the city.
“If the council was to call for a bond program in May, they’d have to call it by the second week in February, which is really not that far away,” Walsh told reporters
Details revealed
The term sheet presented Thursday laid out many previously unreported details about the new Spurs arena — many of which would still require approval by the NBA.
The terms sheet discusses a 17,000- to 18,500-seat arena that would be constructed in just under 5 years and open in 2032 for the NBA season. The city and the Spurs would later negotiate any needed renovations between 2045 and 2048.
The city would own the arena, but the Spurs would be responsible for maintenance at a cost of around $25 million a year, team representatives said at an Aug. 6 council meeting.
The Spurs would pay the city $4 million every year to lease the arena and would retain naming and advertising rights. The Spurs would also pay arena employees $18/hour, at a minimum.]
A rendering of the San Antonio Sports and Entertainment District. Credit: Courtesy / Populous
The term sheet would also tie the Spurs to San Antonio for 30 years with a nonrelocation agreement. The team would be allowed to play four home games outside the arena, as well as neutral or international site games as required by the NBA.
The Spurs would make further financial commitments to the city, including $75 million in community benefits paid over 30 years and gifting the city a $30 million parcel of land near the new arena site.
The NBA would also review the nonbinding term sheet before it can be set in stone.
“The NBA will need to approve the design of the arena and the Spurs obligations under the project agreements, including debt to be incurred by the Spurs,” according to the term sheet. “The project agreements will include provisions to mitigate negative impacts, if any, of NBA rule changes on the parties’ interests in the arena or other matters that are the subject of this term sheet.”