Category: San Antonio Spurs

The San Antonio city council held a hearing on the San Antonio Spurs‘ proposed Project Marvel arena-and-convention-center-and-other-stuff development yesterday, but while it had been teased as a discussion of CSL’s predictably questionable economic impact report on the project, it turned into a throwdown between the mayor and the council about whether to worry about economic impact at all:

• Newly elected Mayor Gina Ortiz Jones asked for a “strategic pause on this entire effort” in order to conduct a “full independent review” of the costs and benefits of the deal.
• Seven out of 10 city councilmembers said screw that, they were ready to go ahead with a vote on the arena project as soon as August 21. “I trust the Spurs,” said councilmember Phyllis Viagran. “I know the Holts. I know they want to be here, and they’re the majority owners. So I’m ready to tell you, Erik, move with the lawyers and continue to get this done and bring it to us for a vote.”

What exactly the council would be voting on to approve remains a little unclear: There’s been talk of using the city’s share of hotel and property taxes, but no word on a specific cost breakdown. City officials have said that the total city subsidy would amount to $500 million, but haven’t provided details; Jones told KSAT that three years into negotiations, “we still don’t have a final number” for how much the project will cost.

Any council vote will be “nonbinding,” so presumably further council votes will be needed down the road to approve a binding version of whatever it is the council thinks it’s giving a thumbs-up to this month. A full independent review of the costs still sounds like a great idea in the meantime, but it also doesn’t sound like the bulk of the council is interested in that, not so long as they have their report from clown consultants in its clear plastic binder.

 

Residents of Bexar County, Texas, will go to the polls in November to vote on raising taxes on hotels and car rentals to help fund a new San Antonio Spurs arena, after county commissioners voted 4-1 to put it on the ballot.

Because we can’t have nonconfusing things, the ballot measure will come in two parts:

The first asks if voters are willing to spend $191.8 million for upgrades and expansions to county facilities on the East Side, including the Frost Bank Center, the Freeman Coliseum and the San Antonio Stock Show and Rodeo Grounds.

The second question will ask whether to use the remaining funds — up to $311 million — to help fund a new downtown arena for the Spurs.

So if one wins and not the other, will the taxes only be raised partway? Will they still both go up, but the money will only be spent on one of the two uses? San Antonio Express-News? KENS-TV? Anyone?

The tax hike would only raise $311 million for the Spurs over 30 years, so it would only cover about $150 million of up-front arena costs. But not to worry — team owner Peter Holt is also looking for about $500 million in city money from existing hotel and business taxes, and hasn’t ruled out additional asks toward the arena or the larger Project Marvel, which would include a convention center expansion and new hotel and Alamodome upgrades and other stuff, and is expected to cost more than $3 billion in total, of which Holt would commit to putting in about $1 billion. None of those additional subsidies are expected to require public votes.

And how does Holt, who unlike most of his fellow NBA owners is not a billionaire but a mere hundredmilllionaire, justify asking for all this public money for his private sports venture?

“For context, of the 30 NBA teams, the 14 smallest-market teams all have publicly funded arenas. The average is 70% public funds. … The most recent, Oklahoma City, is 95% funded by public funds,” Holt said.

Ah, “all the other kids are doing it.” A classic!

Holt was notably quiet about the Convention, Sports & Leisure consulting report that projected the development could be worth $18.7 billion to the city, possibly because word was starting to get out that the report was, well, let’s call it crap:

The forecast is “jaw-droppingly vacuous” and doesn’t include market, cost or risk analyses, said Susan Strawn, a member of “No! Project Marvel” and former District 1 City Council candidate.

CSL provided no explanation of the data underlying its assumptions and no study of alternative uses for the public funding that’s expected to flow into the district, she said during a press conference Monday outside the Alamodome.

And FoS convention center correspondent (and University of Texas at San Antonio professor) Heywood Sanders adds:

In 2003, CSL forecast that an expansion of Philadelphia’s Pennsylvania Convention Center would boost hotel room night generation from an annual average of 503,000 to 786,000. In 2024, the expanded facility generated 411,315 hotel room nights. It’s never even come close to that 503,000 number again.

Other projections by the consulting firm have also missed the mark.

There’s still a long way to go before all the boxes are checked for this project, and San Antonio Mayor Gina Ortiz Jones has been strongly critical of it, saying Holt should be asked to kick in a share of team revenues. Still, that won’t stop Holt from trying to lock in his first tranche of subsidies in November, before asking for his next few hundred million. Keep that up long enough, and pretty soon you’re talking real money!

San Antonio Spurs owner Peter Holt proposed a plan late last week that would require the public to cover between $700 million and $1 billion of the cost of a new $1.2-1.5 billion arena, and how did the local paper of record, the San Antonio Express-News, cover it?

The Spurs are looking to kick in $500 million for a downtown arena, spend another $500 million on nearby development projects, and contribute $60 million for childcare initiatives, discount tickets and other offerings in an effort to persuade San Antonio and Bexar County leaders and voters to support public funding for the facility.

Sure, that’s a choice. It almost certainly doesn’t help that Holt was very specific about the $500 million share he proposes to cover — plus cost overruns, though what constitutes a cost overrun on an arena with no established projected cost is an interesting epistemological question — but much more handwavy about where the public money would come from: He wants $500 million in business tax and hotel tax revenue from the city, plus an undetermined amount of money from Bexar County, perhaps $175 million of which would come from a 0.25% hike in hotel and rental car taxes set to go before voters this November. Journalism shuns a hard-number vacuum, so “Spurs owner offers $500m toward arena” works better as a headline than “Spurs owner asking taxpayers for unknown hundreds of millions toward arena,” even before considering that the former is what was boldfaced in Holt’s open letter, anything in boldface must be important and true, that’s just how it works, right?

News4SanAntonio did a slightly better job of laying out the relative costs, with a pie chart showing $500 million coming from Holt, $500 million from the city, and $200 million from the county — though the reporter then undercut that by pointing to each section of the pie and saying “this doesn’t come from your tax money, this doesn’t come from your tax money, this doesn’t come from your tax money,” which is a funny way of describing a chart where two of the sections are literally tax money. The argument is presumably that because it’s only “tourists” who pay hotel and car rental taxes (not really, but let’s go with it), this is free money — but regardless it’s money the city and county could raise to spend on anything other than a new toy for the local NBA owner, so it’s still a net loss.

There’s still a ways to go on the proposed Spurs arena deal, including that November vote to authorize county tax hikes, and San Antonio Mayor Gina Ortiz Jones is already making noise about asking Holt to kick in more from naming rights, merchandise, ticket, and concession sales, especially since the city is projecting a $220 million budget deficit by 2030. Still, this is a “transformative” plan called “Project Marvel,” who can say no to that, everyone loves things called “Marvel,” right? Oh, hmm, maybe Holt should rebrand this as Project Cinephile.

Bexar County commissioners took another step toward approving at least half a billion dollars in tax money for a new San Antonio Spurs arena yesterday, voting 4-1 to approve a memorandum of understanding with San Antonio and team owner Peter Holt to start negotiating terms of an arena deal. Or perhaps that should be continue negotiating terms of an arena deal, because the initial framework of a deal is already in place:

The county’s so-called venue tax is made up of two taxes: one on hotel rooms and another on car rentals. It could yield up to $397 million in revenue if the hotel occupancy tax remains at 1.75%, or as much as $449 million if the county asks voters to raise that tax to the maximum of 2%, County Manager David Smith told commissioners early this month….

Aside from the venue tax, the new Spurs arena could be financed with other pots of public dollars, such as revenue from the city’s project financing zone and increases in property taxes within a tax increment reinvestment zone.

The hotel and car rental taxes appear to be headed for a public referendum, possibly in November, otherwise next May. The TIF district and project financing zone (basically a TIF for business and hotel taxes) wouldn’t have to go through a public vote, but would require the approval of the city council or county commission.

The total public outlay from all this is as yet undetermined. (The city is also considering gifting Holt a publicly owned golf course, market value likewise undetermined.) But it’s not stopping proponents of the arena project from saying it’s clearly better than the current situation, where the Spurs are forced to play in an ancient 23-year-old arena that is practically falling to bits, probably:

The county would need to pour about $78 million into improving the Frost Bank Center through 2029, Mike Wooley, co-founder of Venue Solutions Group, told commissioners Tuesday. The venue would require about $245 million worth of improvements over the next 20 years — if it continued hosting an NBA team.

The San Antonio Express-News doesn’t bother to ID Venue Solutions group, so let’s look them up: They were “launched in 2011 by three industry professionals with over 65 years of collective experience in the public assembly facility industry” (names of said professionals not included on the company website) and have done “facility condition analyses” for a bunch of different arenas, though when you click on “view case study” no actual studies are available. So while county judge Peter Sakai and county manager David Smith both said that’s $245 million the public wouldn’t have to spend on arena improvements if they built a new arena, there’s no way to tell how much the public would have to spend on improvements for a new arena, which in 20 years would be almost as old as the one the Spurs owner is desperate to get out of now.

But anyway, spending [insert large number here] dollars of tax money on a new Spurs arena to replace the one that was opened during Season 14 of The Simpsons won’t cost taxpayers anything, promises Sakai, because reasons:

Sakai made clear numerous times that putting this on the backs of County taxpayers is a non starter for him.

“For me to continue to have the county be invested, no homeowner property tax,” he said. “It cannot fall on the seniors. It cannot fall under disabled. It cannot fall on the veterans who are on fixed income. That’s that’s a deal breaker for me.”

Well, that’s okay then! Wherever the money comes from, it won’t take away from money for seniors or the disabled or veterans or adorable puppies, because they’ll have just as much public money at their disposal, from all the magic beans that will come with this deal, once it’s negotiated, for sure. Also, Sakai promises, the current Spurs arena will remain “sustainable and viable for the long term” and won’t “turn into the next Astrodome” — because that always works out well.