Current situation
The increased HOT—which would raise an estimated $450 million—would fund the renovation of the Freeman Coliseum and the development of a new multi-purpose downtown arena. The proposition would also authorize the county to use funds from the existing 5% motor vehicle rental tax.
Estimated to net roughly $175 million in funding for the new Spurs arena, county officials stressed that revenue generated by the increased HOT and the motor vehicle rental tax would be used to maintain county properties, such as the Frost Bank Center and the Freeman Coliseum, before any funding would be used on the new Spurs arena.
“We have made a commitment that we want to make sure that the county facilities, the eastside community, is included according to statute, because that tax can only be used for certain things, and if there's anything left over, then we will see what we can do to keep the Spurs in San Antonio,” Bexar County Judge Peter Sakai said.
The proposal is the newest move towards the construction of the new sports and entertainment district, and would assist in funding the project alongside San Antonio’s newest project financing zone, PFZ, which the City Council voted to form in May. The PFZ is a 3-mile zone centered around the Henry B. Gonzalez Convention Center and allows the city to capture incremental state-associated HOT tax revenue over a 30-year period.
Potential 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
In February, the San Antonio City Council and the Bexar County Commissioners Court approved a memorandum of understanding, MOU, which is a nonbinding agreement valid through Dec. 31, between the city, Bexar County and the Spurs.
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
Proposed projects include:
- 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
If the county gets state approval, it would clear the way for the county to hold a public vote in November.
