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The City of San Antonio is in the final stages of using $30 million of money committed from the San Antonio Spurs to purchase a federal building within the proposed sports and entertainment district. The city will also seek a consulting firm to analyze the costs and revenue opportunities of the district and a firm to manage the overall construction and development.
The building at 727 Cesar E. Chavez Boulevard is currently owned by the United States General Services Administration. It holds local offices for Congressman Joaquin Castro, Social Security, the Federal Bureau of Prisons, and several other tenants.
The city plans to purchase the building at a cost of $30 million and potentially 120,000 in closing costs. However, that money will be provided directly by the Spurs. The purchase agreement also includes two parking lots for a total of about 5.7 acres.
City Council will vote on the purchase this Thursday. On Wednesday, the council will hear about the plans as a group.
Under the purchase agreement, the building would be owned by the City of San Antonio and leased back to the Spurs.
The city’s Chief of Finance Ben Gorzell said while the final uses of the building are not yet certain, it’s an essential part of the overall sports and entertainment district plan.
“It's property we're interested in, but it's important, because as we own the property, then we're able to then turn around and ground lease it, so it's going to create a revenue stream back from the Spurs and their developer as they develop that mixed use development on that property,” he said.
If the purchase goes through, current tenants will likely stay in the building for the next three to five years as the federal government seeks to relocate those offices.
The properties are next to John Woods Federal Courthouse, which is expected to be a 5,000-seat music venue and the now demolished Institute of Texan Cultures.
The institute’s grounds would be the site of the proposed new Spurs arena. That piece of land, owned by the University of Texas at San Antonio is currently under negotiations.
“That's going to be a big part of our work effort for 2026 as well,” Gorzell said. “We’re willing to engage with UTSA and work on the acquisition of that property. We have that memorandum of understanding in place, which gives us the kind of exclusive first right to buy that property. So that is something that we need to engage with them on and begin to negotiate.”
It’s possible that purchase of the former ITC grounds could be $60 million financed through the creation of a Tax Increment Reinvestment Zone (TIRZ). A TIRZ freezes the property tax base and uses the increase in taxes from new development to pay for public infrastructure, enhancing the area's potential and tax base, often for projects like streets, drainage, and cultural facilities.
On Monday, the city council’s audit committee was briefed on plans for soliciting potential contractors on two planning initiatives.
The first will be a $320,000 study to see the potential revenues of the district and analyzing the cost of basic services, especially when all sites in the district like the convention center, basketball arena, Alamodome, and music venue are active.
“Like traffic, security, fire, EMS and park or district maintenance. And then we want to look at it from a standpoint that can vary greatly depending upon what's happening in the district and how many attendees are in the district,” Gorzell said.
The second initiative will include hiring an executive project manager to be the overseer of all the developments taking place in the district. That comes at a cost of $10 million. Under the city’s proposal, a firm would be hired to fill the role for two years with the open of three one-year contract extensions.
“They're going to help us with the sequencing of projects, the sequencing of work within the district,” Gorzell said. “They're going to help us oversee all of that work. They're going to help us, from a collaboration standpoint, look at as these projects are moving forward at the same time. How do we coordinate for potential savings, but how do we also coordinate so that we're not driving each other's costs up?"
The city will open a request for qualifications process, and the final selection would be decided by the city council in April.
