Monday Musings 22: As Runoffs Loom, a Departing Mayor and Council Face Spurs Arena Briefing

There is nothing traditional about this political season in San Antonio. Early voting concludes Tuesday before the Saturday, June 7, runoff election. For the first time in my lifetime, two candidates who did not emerge from City Council service are vying to lead the city for the next four years. Former Air Force Under Secretary Gina Ortiz Jones, a Democrat, and former Texas Secretary of State Rolando Pablos, a Republican, have also made this contest the most partisan in memory.

Improved early voting turnout suggests the runoff election is attracting voters who sat out the May 3 first round when a confusing parade of 27 mayoral candidates were on the ballot and election day fell in the heart of Fiesta. The nearly 14,000 voters who went to the polls on the first day of early voting surpassed the day-one turnout for the contentious runoff in 2017 when District 8 Councilman Ron Nirenberg unseated incumbent Mayor Ivy Taylor.

Voters may also be energized by runoff races in Council Districts 1, 6, 8, and 9, which also have taken on a partisan tone. The outcomes will determine the new council's political leanings and priorities.

What makes this season even more unusual is that the most ambitious public-private project in city history is in the works, a multi-billion dollar transformation of Hemisfair that includes plans to bring the Spurs back downtown to a new arena surrounded by a new entertainment zone; expansion of the Henry B. Gonzalez Convention Center; a top-to-bottom rebuild of the Alamodome; and construction of a land bridge that would provide an attractive pedestrian way between the Alamodome and Hemisfair.

So, one day after early voting concludes, Nirenberg and the current council will sit for a Wednesday B Session briefing focusing on how to pay for the new Spurs arena. For those unfamiliar with how city hall operates, the B Session is when the mayor and council members receive staff and community briefings, and pose questions in anticipation of the topic being placed on the A session agenda for a vote. Elected officials do not vote at the B Session. That’s reserved for the A session held in council chambers on Thursdays. Still, the Wednesday briefings and information exchanges often give the public a good sense of council support or opposition to a proposal.

The answer to the funding question is starting to come into focus. Basically, the ball is in the city’s court as the mayor and council prepare to give way to a new mayor and council in two weeks. The end result, in whatever form it takes, will see the team’s owners, the city, and the county providing most of the funding.

Thanks to the city’s robust visitor industry, locals will see a final funding formula with some similarities to how Bexar County and the Spurs gained support from voters in 1999 to fund what became the SBC Arena, now rebranded as the Frost Bank Center.

This time, the city has an opportunity to use funding tools created by the Texas Legislature, specifically through its Project Financing Zone (PFZ), to retain what otherwise would be the state’s portion of the hotel/motel tax. Capturing this funding locally will allow the city to invest in projects that deliver long-term community benefits. The legislation was specifically passed to allow Texas cities to invest in major infrastructure projects with economic development benefits. These same funds cannot be diverted to other city initiatives aimed at housing, job training, food assistance, or public health programs.

It would be crazy, in my opinion, for City Manager Erik Walsh and staff not to enthusiastically promote the city’s opportunity to maximize sales tax investment in the PFZ, or in what city officials are calling the "convention center complex." Other cities, including Dallas and Fort Worth, are already doing so.

Bexar County used the voter-approved venue tax to build its Eastside arena, again sparing local taxpayers. Voters also approved using the same tax for significant upgrades to the arena in a 2014 election. This time, the county has indicated it will have available $397 million for new projects at its current taxing rate, or $448 million if the hotel portion of the tax is raised. The tax includes a 1.75% levy on hotel rooms and a 5% levy on short-term car rentals.

Winning all of that for a new Spurs arena is unlikely. The county wants to reserve a significant portion of the venue tax to once again invest in the Frost Bank Center, the adjacent Freeman Coliseum, and the stock show and rodeo grounds. Whatever it decides, Bexar County Judge Peter Sakai and the county commissioners will have to go back to voters and seek their approval on the November ballot.

It remains to be seen how much each of the three principal funders—the owners, the city, and the county—is willing to commit to a new downtown arena estimated to cost $1.2 to $1.5 billion. The June 7 runoff election outcome will also determine whether a new mayor and council accelerate the project or slow it down.

One thing is certain: city and county residents alike support funding mechanisms that shift the burden to conventioneers and tourists. According to a preliminary Spurs poll, 57% of city residents favor the new arena if local taxes are not raised. That is not unlike the approval numbers realized when county voters went to the polls.

Some economists who oppose public financing of sports facilities argue that they benefit the owners, corporate sponsors and well-to-do season ticket holders. Local critics often fail to measure the outsized economic impact the Spurs have in the city and county year after year.

The Spurs’ economic impact on the city and county is significant. Since moving from the Alamodome to the SBC Center/AT&T Arena/Frost Bank Center, Spurs Sports & Entertainment estimates the team has had a $9.2 billion impact on the county and contributed $22 million in county taxes, while its community programs have reached 400,000 inner-city children. 

Additionally, NBA games and other arena events have historically had an annual economic impact of 21,000 hotel nights, 1,000 jobs, and 1.3 million attendees. All this to say that the future impact of a new Hemisfair arena will be a game changer for downtown and the city.

Equally missing is the acknowledgement of how important the Spurs and their five NBA championships are to the city’s identity, culture, and standing nationally and globally. Public investment in protecting and nurturing that identity is a very justifiable and sound investment, in my opinion.

No one objects to the ongoing $550 million transformation of the Alamo and Alamo Plaza, also made possible by unprecedented funding from the state, along with city and county contributions and significant private funding. The historical site is central to San Antonio’s identity, and the transformation will give future generations a far richer appreciation of the site’s history and the people who lived and died there. More than 2.5 million people visit the Alamo annually. The new Ralston Family Collections Center, the Texas Cavaliers Education Center opening in 2026, and the 2027 opening of the Alamo Visitor Center & Museum are long overdue investments and transformative downtown projects.

For 50 years, Hemisfair sat underutilized and neglected after Hemisfair ‘68. San Antonio is well on its way to what will ultimately be a decades-long reactivation of the 100-acre site. A new Spurs arena is central to that transformation, and of course, central to the city’s future profile. Bringing the Spurs back to Hemisfair, where they played from 1973 to 1993, will be a game changer for San Antonio and its ability to compete with other major destination cities. Community identity might be hard to quantify in dollar terms, yet everyone should be able to agree that a San Antonio with the Spurs and a San Antonio without the Spurs are two very different cities. 

Team leaders have continued to express a long-term commitment to San Antonio and view this project as an opportunity to build on that legacy, not a condition of it. A city that has lost major employers should understand the stakes. It is my hope that Walsh and his senior team at the city deliver every proposed facet of the redevelopment of Hemisfair in the coming years. The public-private project will probably define their legacy, and it certainly will help shape the future of our downtown.

It should not be hard for a new mayor and city council to welcome the major opportunity that awaits them.