District 8 Councilwoman Ivalis Meza Gonzalez and City Manager Erik Walsh held a town hall meeting at Oak Meadow Elementary to inform citizens on the Sports and Entertainment District’s proposed budget, specifically regarding Proposition B. Accompanied by Spurs General Counsel Bobby Perez, officials provided an overview of the proposed budget, including details on funding mechanisms and timelines. Gonzalez began the meeting at 7 p.m. this past Wednesday, giving Walsh the floor to present on the proposed budget.
Walsh’s presentation was a slide deck that illustrated the eight developments as well as a breakdown of sources and destinations for funding. He emphasized the need for an expansion of the Henry B. Gonzalez Convention Center, as well as a mid-sized entertainment venue, with renovations to the Alamodome.
The main portion of the presentation was devoted to the breakdown of the proposed budget for the Sports and Entertainment District. As laid out in the term sheet approved in August, the Spurs are committed to contributing 52% of the budget, a minimum $500 million investment, while also covering all cost overruns. The city and Bexar County will also cover 48%, $489 million and $311 million, respectively.
Alongside their $500 million investment, the Spurs will contribute $75 million at $2.5 million a year for 30 years to be used for community benefits. The use of that money is up to the city council.
“What that money goes to is really based on what the community needs,” Councilwoman Gonzalez said. “I think what would be beneficial is if we had some sort of committee that’s in place that we’re able to decide where that money needs to go.”
The City’s portion of the costs will be covered over 30 years by the Hemisfair Tax Increment Reinvestment Zone, which captures new property tax revenue from growth in the Hemisfair area and reinvests it, the Project Finance Zone, which allows the city to keep a portion of state hotel tax revenues for up to 30 years to fund venue and convention projects within a 3-mile area and land lease on the surrounding development.
Bexar County will provide the final portion. If Proposition B is approved by voters in November, the county will increase its venue tax from 1.75% to 2% and allocate $311 million from its collection. This is primarily funded by hotel stays and rental cars.
The money in this budget does not include any work needed for improvements to the infrastructure, such as roads and storm drains, around the planned development.
“We did talk to the council about general infrastructure work needed around that downtown area,” Walsh explained. “Any work that the city has to do in that surrounding area would be a municipal bond that would have to be approved by voters, and so that is work we still need to do.”
The city completed an economic analysis in July, which expected the new entertainment district, minus the arena, to have an estimated $18 billion impact over the next 30 years. Walsh noted that the economic analysis is not the same as a cost-impact analysis.
Concluding the presentation, Walsh, Gonzalez and Perez took questions written on notecards by attendees.
“Is this vote for all of Bexar County or just San Antonio?” one attendee asked. “Everybody is included; whoever is in Bexar County can vote for or against these propositions,” Councilwoman Gonzalez answered.
“Will hotel and car rental taxes scare off visitors?” another attendee asked.
“With 35-36 million visitors last year, no, I don’t think they will, but that’s my personal opinion,” Walsh answered.
“Are spurs locked into the promises?” Perez answered, “Yes, we have to sign an agreement that says we have to guarantee and build X before bonds and debt are issued.”
This project is still developing. The next big step will be on Nov. 4, when Proposition B either passes or fails. If the ballot item passes, the city expects another 9-10 months to negotiate agreements, which will require city council approval. The current timeline is that the project will be completed by 2032.
