Explaining the explainer on the San Antonio Spurs arena funding plan

It’s fair to say that media coverage so far of San Antonio Spurs owner Peter Holt’s plans for a new arena district paid for partly by taxpayer money hasn’t been very good: The San Antonio Express-News has advocated against letting the public vote on how public money will be used, while News4SanAntonio had a reporter point to a chart showing how tax money would be used on the project and say “this doesn’t come from your tax money.” Meanwhile, local news outlets keep beating the drum to threaten that the Spurs could move without a new arena, even while acknowledging that Holt doesn’t have any great options to move to.

Against that backdrop, it’s nice to see a local news outlet, the nonprofit San Antonio Report, attempting an analysis of how the money would work for the Spurs deal. How’d they do? Let’s take a look:

Soon voters will be asked to weigh in on a portion of the NBA arena’s public funding, $311 million in county venue tax dollars, on the Nov. 4 ballot.

Another $489 million is expected to come from the city, which says it can spend the money without a public vote. And the remaining $500 million-plus would be paid for by the Spurs’ ownership.

That’s basically right, though it’s worth noting that the $311 million in county tax money would arrive over three decades, so it would only cover about half that in up-front arena expenses. Present value matters!

Unlike the city, which is using tax reinvestments, Bexar County’s taxing entities will enjoy the growth in taxable value from both the East Side developments and the new downtown sports and entertainment district — money that’s needed for a budget that relies heavily on new growth.

This is a mouthful, and it’s mostly wrong or at best misleading. So let’s unpack it bit by bit:

One part of those city “tax reinvestments” would actually come from a Project Finance Zone, a Texas-specific subsidy where state sales taxes are in and around a redevelopment area are siphoned off to help pay for the development itself. Since this is money that would otherwise go to the state treasury, one could see it as free money for the city — though, obviously, San Antonio residents are also Texas residents, so draining the state budget to help pay for a new Spurs arena isn’t exactly a free lunch.

Another part is from a Tax Increment Reinvestment Zone, which is just a TIF, redirecting any increase in city property taxes in the redeveloped area back to the developer. And as the Report reports, that’s not free money either: “New housing and development within the zone requires city resources, like police and fire, but the growth in property tax revenue is being directed toward special projects within the zone, instead of boosting the general fund for the entire city.” Translation: The new Project Marvel development that would include an arena would come with lots of new city costs, but the taxes that would normally pay for those added costs will instead go back to Holt to pay for building the arena.

The county money, meanwhile, would come from an existing car rental tax and an increase in hotel taxes, neither of which have much to do with a new arena — it’s unlikely Spurs fans will rent more hotel rooms or cars just because they’ve bought tickets to a sparklier home court — but which are revenue streams the county has available and if you squint they kind of have to do with “tourism,” so they’re getting thrown into the pot. Or will assuming that Bexar County voters approve them on election day in November, which no one appears to have done any polling on of late, but earlier this year support was deemed “tepid.”

And on top of all this, there’s the possibility of a city “infrastructure bond” — to be voted on separately, likely next spring — to provide $220-250 million toward new bridges and highway ramps to support the arena project. (The Report’s explainer doesn’t explain where the money to pay off the bonds would come from.)

So that’s more than $750 million worth of tax money going to the Spurs owner, in exchange for getting a big new downtown development and relief from any fears that Holt will move the team to Greensboro. Is that, like, a good deal? A bad deal? Better than a poke in the eye with a sharp stick?

Here’s the entire cast of characters quoted by the paper in its attempts to explain the situation:

• Rena Oden, an “activist with the COPS/Metro group that opposes the program”
• Bexar County Judge Peter Sakai, who wants to “do everything I can to keep the Spurs in town”
• Pro-arena councilmember Marina Alderete Gavito
• Houston Chronicle business columnist Chris Tomlinson, who is concerned the promised increased tax revenues may never arrive
• San Antonio Mayor Gina Ortiz Jones, who wants an independent analysis of the project
• City of San Antonio Chief Financial Officer Ben Gorzell, who says the arena plan is “predicated on not using existing city resources or funds”
• John W. Diamond, a tax and finance expert at the Baker Institute for Public Policy, who fails to really explain the infrastructure bond beyond calling it “the whole process on steroids”
• Councilmember Teri Castillo, who doesn’t want to see money diverted from the city’s general fund

That certainly checks all the boxes of citing both proponents and critics, though it’s worth noting that most of the quotes are recycled from past public statements, so the Report’s reporters didn’t spend much time picking up the phone for this one. And they absolutely didn’t call any of the people who would be the most useful: sports economists or local budget analysts who could discuss what return on investment, if any, San Antonio and Bexar County can expect to get from $750 million in Spurs arena subsidies. Bothsidesing may make your news outlet look “neutral,” but what readers need going into public ballots is information on what exactly they’ll be voting on and how it will affect what government money they’ll have available. Without that, it’s all too easy to see this as a simple referendum on whether the Spurs leave town — which it very much isn’t, but if Holt gets to play it that way without ever having to threaten to leave, it’ll be a win-win for the Caterpillar dealership magnate.