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The San Antonio City Council will decide between approving a nonbinding terms sheet with the San Antonio Spurs for their new proposed arena and pausing the Project Marvel process on Thursday.
The council has expected for weeks to have a vote on the terms sheet on Thursday. But a potential pause is new to the week’s agenda and is something that Mayor Gina Ortiz Jones has pressed for. However, a majority of her colleagues opposed the idea when she brought it up two weeks ago.
The terms sheet is a detailed framework for how a new $1.3 billion to $1.5 billion Spurs arena in Hemisfair would be paid for, built, and owned, but it is not a final agreement.
“I don't think it is appropriate for us to consider any terms sheet until we have two things in place,” Jones said on TPR’s The Source on Monday.
Those two things are an independent economic impact study and two new public engagement sessions to be held in every council district after that study.
Jones and other councilmembers have said that the only economic impact analysis available for the Spurs arena was commissioned by the team itself.
About the August 21 deadline, Jones said, “It's arbitrary. So what should not be arbitrary, though, is this community understanding that they deserve an independent economic impact study.”
The terms sheet said the Spurs would be on the hook for $500 million in direct arena construction costs, any and all construction overruns, and a $75 million community benefits agreement over 30 years. That CBA value is $10 million more than previously discussed.
The Spurs are also committed to contributing $1.4 billion in new taxable development around the arena over 12 years: $500 million in the first phase and the remaining $900 million in the second phase.
The city, on the other hand, would be on the hook for $489 million, or 38% of the arena’s total cost, whichever is less, and it would own the arena land and arena itself through a controlled subsidiary or affiliate. That subsidiary would include participation from Bexar County.
The city will issue debt to make the contribution, which will then be paid for by new taxable development the Spurs are guaranteeing, revenue from the Hemisfair Tax Increment Reinvestment Zone (TIRZ), revenue from the state Project Finance Zone (PFZ) around the arena, and the Spurs’ annual rent payment.
The city would lease the arena to the Spurs for a starting price of $4 million annually, with 2% increases each year until the end of the term 30 years later. That would generate more than $122 million over the course of the lease.
The TIRZ is a geographical area around Hemisfair that collects all incremental taxes above the base year of taxable value when the TIRZ was first created. Essentially all the new taxable value created by Spurs and other developers around the arena would be captured in the Hemisfair TIRZ.
The PFZ is a tax mechanism the state legislature created for San Antonio to direct hotel tax revenues that normally go to the state to certain eligible projects. State legislation names convention centers and venues as the eligible projects for those funds, and the city has created the “Convention Center Complex,” which includes the new Spurs arena, the Alamodome, and the Henry B. Gonzalez Convention Center as eligible properties to receive PFZ funds.
The deal also comes with a 30-year non-relocation agreement requiring the Spurs to play all home games in the new arena — or up to four games in other Spurs “home territory” like the Alamodome — unless the team is required to play at other “international or neutral sites” by NBA rules or regulations.
It is not clear if the Spurs would be allowed to play any home games in Austin, as has occurred in recent years and is scheduled to do in the upcoming 2025-2026 NBA season.
The city has now delayed a vote on a new infrastructure bond for the downtown area described as necessary for any of the new Project Marvel developments. The city council had an Aug. 18 deadline to call a November bond election.
The next opportunity to hold such a bond election is May 2026.
Bexar County voters will have the opportunity to vote on a potential increase to the county’s venue tax in November, which is how the county would contribute up to $311 million to the arena.
