San Antonio city staffers haven’t yet started negotiating final details of a deal with Spurs Sports & Entertainment (SS&E) for a new downtown basketball arena, City Manager Erik Walsh said during a Wednesday afternoon media briefing.
Walsh’s meeting with the media came just before he spoke at City Council’s B Session to provide an update on the current status of Project Marvel, the $4 billion sports-and-entertainment district to be built at Hemisfair. The NBA arena would anchor the massive project.
Walsh said the city plans to begin negotiations with the Spurs after the completion of a cost-of-service study approved by City Council last month. That study, being conducted by Maryland-based public finance consulting company MuniCap, cost $350,000.
“This is an important piece for us to have in order to ensure that any potential revenue opportunities in the district itself we’re able to capture,” Walsh said.
Walsh said he hopes to see the completed study by the end of the summer. Once the document is done, negotiations will commence with SS&E and will wrap up by year’s end, he added.
At the same time, the City of San Antonio has yet to purchase the land on which the arena is expected to sit. That transaction also is expected to close by the end of the year.
San Antonio and the Spurs want to put the arena on the site of the since-demolished Institute of Texan Cultures, currently owned by the University of Texas System. That land has been appraised at around $60 million.
Despite those looming deadlines, Walsh was light on details about when construction on the new NBA arena might get underway.
“I think we’re probably going to be better informed when we talk to the Spurs later on in the year about their timeline around the arena construction,” Walsh said.
During the briefing, Walsh also addressed another moving part of Project Marvel: the new infrastructure — such as sidewalks and utility connections — needed to support the new arena and accompanying economic development.
Under state law, the city can use money from downtown’s Project Finance Zone — one of several financing mechanisms the city is using to finance the arena and other upgrades as part of Project Marvel — to fund infrastructure, so long as it’s related to a specific project, including the arena, convention center expansion or Alamodome renovations.
“We’ve identified the venues already, and anything we do with that [money] is going to require the approval of the Texas Attorney General’s Office,” Walsh said.
Walsh maintains the PFZ, which captures tax revenue generated within a 3-mile radius of Hemisfair, could generate $2.5 billion in revenue to cover upgrades. That projection is based on a hypothetical increase in existing hotel occupancy tax revenue over the course of three decades, Walsh affirmed during the meeting.
If the Attorney General rules that PFZ money can’t be used to cover certain infrastructure improvements, those would need to be covered by a infrastructure bond, which council would vote on next year, according to the city manager.
City staff is expected to present feasibility studies on a 180,000-square-foot expansion of the Henry B. Gonzalez Convention Center and Alamodome renovations — other components of Project Marvel — sometime in September.
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