Project Marvel — the $4 billion downtown sports and entertainment district anchored by a new Spurs arena at Hemisfair — isn’t going to be as sweeping as once promised.
Or so City Manager Erik Walsh, Chief of Financial Officer Ben Gorzell and other city staffers told reporters during a closed-door meeting on Wednesday. Rising interest rates, inflationary labor costs and the price of materials continue to wreak havoc across the economy at large, affecting plans for a major remake of SA’s city center, they cautioned.
“We’re not going to be able to do an expansion of the convention center, an arena and a major renovation to the dome,” Gorzell said.
Details about those scaled-down plans come days after real estate developer Weston Urban told the Express-News that plans for a new minor league baseball stadium near downtown are also uncertain due to economic headwinds, including rising material costs and interest rates.
“Anything that goes into a data center is escalating, and we have a lot of those things,” Weston Urban CEO Randy Smith told the city’s Development Services Department this week. “So we need to price it again. I need to keep that as a footnote, as an asterisk. But those same dynamics affect our adjacent development and our ability to raise capital.”
An abundance of parking
The downsizing of Project Marvel’s components amounts to more than shaving off a million bucks here and there, according to Wednesday’s city briefing.
The $1 billion in planned renovations to the Alamodome — which advocates argued was necessary to keep the venue competitive in luring events like the NCAA Final Four — has been revised to $125 million over the next decade.
The proposed land bridge spanning I-37 is now re-envisioned as a pedestrian and bicycle bridge. Still, the city hasn’t ruled out tearing down a newly built pedestrian bridge and replacing it with a land bridge if federal funding eventually becomes available.
Beyond that, the outlook on downtown parking has also changed significantly, city staffers said Wednesday.
Last month, the city scrapped plans for an $85 million Alamodome parking garage as part of Project Marvel because of budget constraints. However, consulting firm AECOM, which the city paid $500,000 earlier this year to conduct a downtown accessibility and mobility study, found that San Antonio doesn’t have a parking problem at all.
“Preliminary findings suggest downtown’s transportation challenges are not primarily caused by a shortage of parking spaces,” the city said of AECOM’s report.
According to the consulting firm’s report, San Antonio has enough street parking to accommodate a Spurs game at Hemisfair, a sold-out show at the Alamodome and a full convention, all at the same time.
Where’s the arena?
City officials offered few details Wednesday about when construction might begin on the new Spurs arena, which voters approved nearly a year ago.
In June, Walsh told reporters that although the city hadn’t begun discussions with Spurs Sports & Entertainment, it was on track to wrap up negotiations by year’s end. But the goalposts have moved on that too.
CFO Gorzell said it’s presently unclear when negotiations may come to a close.
“I said back then that we would be targeting to get done by the end of the calendar year,” Gorzell said. “My assumption, when I said that, is we would have started a little bit earlier.”
Indeed, he added that the city is still in talks with UT-San Antonio to close out the acquisition of the former Institute of Texan Cultures property — the location where the arena is to be constructed.
“That’s nearing completion, but we don’t actually own the site [where the arena is going] today, but we’re wrapping up that process,” Gorzell told reporters. “I think the Spurs talked about an arena opening in July 2030. We have not developed with them a detailed schedule of when they would exactly break ground from a construction perspective, but that I believe is what they’re targeting.”
According to details in the initial term sheet with SS&E that City Council approved last year, “Design and construction of the arena is expected to take 57 months, with a completed facility delivered for Spurs and fan use by the start of the 2032-33 NBA regular season.”
Using that timeline, the Spurs would have needed to begin construction last year to meet Gorzell’s date — or sometime next year at the latest to meet the conditions outlined in the original term sheet.
Convention center improvements
The downsized details presented Wednesday come after the city already canceled plans for a 1,000-room convention center hotel that was to be part of Project Marvel.
Beyond that, the status of plans to redevelop the shuttered John H. Wood Jr. Federal Courthouse, which the city planned to turn into a concert venue, remains anyone’s guess.
Even, so Wednesday’s briefing did include some good news for those hoping to see Project Marvel come to fruition.
The city plans to move forward with a two-phase $850 million renovation and expansion of the Henry B. González Convention Center. But that too has been scaled back: from 200,000 square feet of new exhibit space to 136,000 square feet.
Those renovations, along with the $125 million for the Alamodome, will be financed through a city Project Finance Zone, which relies on projections of hotel revenue over the next 30 years.
The decision to reduce the scale of both projects came down to available money and rising material costs, Gorzell said.
The $1.3 billion arena, meanwhile, will be financed by the Hemisfair Tax Increment Reinvestment Zone (TIRZ), which in turn depends on SS&E persuading developers to build residential and retail space in the area.
With economic clouds scaring away development, it’s not clear just when those projects may appear.
“I’ll just say we have begun negotiations with the Spurs, and we don’t have a specific timeline of when they will be done,” Gorzell said.
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