Spurs offer $500 million for new downtown arena, another half billion for nearby development

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The San Antonio Spurs are offering a collective $1.06 billion investment as part of a deal to move the team to a new downtown arena in Hemisfair.

$500 million would be used for the actual arena, with additional guaranteed coverage for construction cost overruns.

Another $500 million would come in the form of guaranteed adjacent downtown development, and a final $60 million is the total estimated value of the Spurs’ proposed community benefits agreement.

The release of the information from the Spurs comes just two days after internal City of San Antonio emails, first reported by the San Antonio Express-News, indicated that the team is seeking $500 million from the city for the arena.

Those funds would primarily come from a Project Finance Zone, which takes state hotel tax revenues and redirects them to specific projects like the Spurs arena, and the Hemisfair Tax Increment Reinvestment Zone, which collects property taxes from new development in the Hemisfair geographic area to be used for improvements in that area.

City Manager Erik Walsh said Bexar County sent a letter last night that said it would contribute 25% of the arena’s cost, up to $311 million.

He also said the city was preliminarily considering offering between $350 million and $500 million for the arena.

The arena is now estimated to cost between $1.3 billion and $1.5 billion, a new estimate with a cost floor $100 million higher than the initial $1.2 billion floor proposed last year.

Mayor Gina Ortiz Jones highlighted one question that had yet to be answered about the Spurs’ proposal at the start of the briefing.

“Why can’t the Spurs owners pay more?” she said.

Jones pointed out that several members of the Spurs’ ownership team have a net worth 30 times greater than the City of San Antonio’s annual budget.

Walsh said the Spurs have resisted handing over detailed financial statements, including a profit and loss report, citing NBA rules and confidentiality obligations to Spurs partners.

A letter from Spurs Sports & Entertainment Chairman Peter J. Holt to Walsh and the city council shared with TPR said he understood that work still needed to be done to convince the public of the value of bringing the arena downtown.

“We remain fully committed to working in partnership with the City of San Antonio, Bexar County, and the public to explore this opportunity together with transparency, trust and a shared vision for our community’s future,” Holt said in the letter.

The $60 million community benefits agreement comes with 500 $25 or less Spurs tickets for every home game, a commitment that 30% of arena and Sports & Entertainment District construction contracts will go to local companies, subsidized VIA Park & Ride for up to 2,000 single-game ticket buyers, and $35 million in support for expanded early childhood education services in San Antonio over 20 years.

Any new downtown development, including the Spurs arena and many other proposed improvements in the proposed Sports & Entertainment District, is contingent on voter approval of a new infrastructure bond that could be as much as $250 million.

The San Antonio City Council must vote to place that bond election on the November 2025 ballot by August 18.

In an email from Walsh to Jones last week, he told her that delaying further agreements with the Spurs was a risky idea.

“The major risk consideration is that the Spurs ownership will begin initiating other long term plans,” he said in the email.

He did not specify what those other long term plans could be, but said the city should “keep the pressure on the Spurs to complete an agreement” and stay in line with the county’s actions.

Bexar County Commissioners Court is planning to call a venue tax election for November, which is where its portion of funding for the arena would come from.

Jones also proposed different revenue sharing models with the Spurs where the city could get a cut of ticket prices, parking, naming rights, and other possible revenue streams. But the term sheet Walsh presented to the council said the Spurs would not be open to any revenue sharing.

Dozens of community members spoke to the council on Friday, the vast majority either opposing the new Spurs arena or calling on the Spurs to contribute much more to the arena and community benefits agreement.

Alex Coy is a member of the International Alliance of Theatrical and Stage Employees Local 76 and a San Antonio Central Labor Council delegate.

He told the council during public comment that the city should get more from the Spurs before moving forward.

“I’m going to implore you all to strongarm the jackals who are trying to ramrod this through and gobble up city funding to actually provide affordable housing for residents here, because if you make a downtown area that people can work at but can’t afford to live near, you don’t have a downtown, you have a theme park,” he said.

Richard J. Aguilar, another resident, also called on the Spurs to offer more.

“The Spurs are great for San Antonio,” he said. “They make San Antonio proud. They have integrity and they’re successful. I would hope that the ownership of the Spurs would take the lead in showing integrity and showing success by assuming their fair share of their responsibility.”

The Greater San Antonio Chamber of Commerce President and CEO Jeff Webster was one of the few speakers who expressed full support for the arena, along with primarily other representatives from business groups.

“This will change the life for a couple thousand construction workers that will work on these projects,” Webster said. “This will change the life of entrepreneurs who will start businesses that will impact for generations to come. I encourage you to think beyond your term, beyond today, and let’s support a big vision.”

City council members told Walsh to continue pursuing negotiations with the Spurs, and several pushed for the city to get more out of negotiations with the team.

Proposals from Jones and councilmembers Jalen McKee-Rodriguez and Teri Castillo included subsidized bus fares for downtown employees, affordable housing funding, expanded childhood education services, and direct revenue streams into the city’s general fund.

Walsh said the council will receive a briefing on July 31 about the economic impact analysis of the entire district, another briefing on August 6 about the term sheet and community benefits agreement, and that he plans to schedule a council vote on the term sheet on August 21.

The Spurs declined to make any representative available for interviews after Friday’s special session.