What you need to know
The MOU includes three main objectives, six proposed major projects and potential funding sources for the projects.
MOU objectives:
- The renovation of the Frost Bank Center and the Freeman Coliseum, and the redevelopment of the Freeman Coliseum grounds and the surrounding area to support continued attraction of major national sporting, musical, cultural, family and community events
- The creation of a downtown sports and entertainment district, the proposed expansion of the convention center, renovation of the Alamodome, the construction of a land bridge over I-37 that will connect downtown with the eastside, and the encouragement of development of other retail, entertainment and housing developments downtown
- The new downtown arena will be designed and constructed to support the primary occupancy of the Spurs Basketball Team for professional basketball and ancillary related uses. The new area will be comparable with professional basketball areas and facilities for the NBA
- UTSA School of Hospitality and Convention Center Hotel
- Re-imagined Alamodome
- Expansion of the Henry B. Gonzales Center
- New sports arena
- New mid-size event venue, known as Wood Courthouse
- Landbridge connecting downtown to the eastside
Prior to the vote, District 10 council member Marc Whyte reminded the council that the vote is not in full support of the MOU as outlined during the Feb. 26 meeting, but a future agreement to be arranged by the city manager.
“We are voting today to give you authority to move forward on some sort of memorandum of understanding that has yet to be determined,” Whyte said.
Due to the proposed land transfer of Willow Springs from District 2 to the sports and entertainment district, District 5 council member Teri Castillo proposed an amendment to ensure that the District 2 council member be included in any major substantive talks between the city, the county and the Spurs. During discussion, District 8 council member Manny Pelaez amended the motion to include the District 1 council member as well.
The first amendment to add two council members to any substantive discussions passed 9-2, with District 7 council member Marina Alderete Gavito and District 3 council member Phyllis Viagran voting against. The ordinance to approve the MOU and allow the city manager to execute the agreement passed unanimously.
Funding the project
According to city documents, the proposed sports and entertainment district would rely on a series of funding sources.
Funding sources include:
- Hotel Occupancy Tax: a tax on the rental of a hotel room and is collected from the hotels. The city’s existing 9% HOT provides funding to support tourism, convention activities, arts and cultural programing, Alamodome and convention center facility operations, and debt payments for improvements to these facilities
- Project Finance Zone: a designated 3-mile zone around a qualifying project in which a series of taxes from businesses and venues is captured over a 30-year period
- Tax Increment Reinvestment Zone: an economic tool that allows participating taxing entities, such as the city to capture their incremental increase in property taxes so these funds can be used to support development within the boundaries of the TIRZ
- Private Funding: funding from sources, such as equity investments, naming rights and team contributions
- San Antonio Spurs: funding received or derived from the San Antonio Spurs to support the construction of the new NBA basketball arena
- Venue Tax: a venue tax is a hotel occupancy tax of 1.75% and a car rental tax of 5% imposed by Bexar County to fund venues or improvements to venues approved by voters
- City Capital Funds: funding that includes bond funding from general obligation bonds or other funds eligible for infrastructure. This category includes bond proceeds generated from specific revenue sources, such as parking revenues
- Federal Funding: funding received from federal government sources, such as program grants
- “This is about the fabric of San Antonio, what they mean to the community, the values that they espouse, that all of us agree with and try to promote every day here at City Hall, and [this must be done] in a fiscally responsible manner that does not place any financial burden on our citizens,” Whyte said.
- “The journey of 1,000 miles begins with a first step and this truly is a first step of a very long, complex process and I don’t think there’s any guarantee in my mind that the city is going to support building an arena without understanding every implication that could be involved in that,” District 9 council member John Courage said.
- “I think everybody here is cautiously optimistic. I’m pleased with that caution and with the optimism,” Pelaez said.
After the vote, county officials, city officials and the Spurs will continue to define and develop strategies to enact the development projects.
Next steps timeline:
- Continue due diligence and analysis for anchor projects
- Gather information from county on redevelopment efforts for Willow Springs Golf Course and Frost Bank Center
- Develop and negotiate funding framework for NBA Arena
- Establish regular council briefings
