Spurs Arena Plan Ties Venue to Massive Mixed-Use Buildout

San Antonio leaders will decide this week whether to advance negotiations for a new Spurs arena that could anchor a multi-billion-dollar entertainment district downtown.

The San Antonio City Council is expected to vote Thursday on a term sheet for the $1.3 billion project, the first step toward binding agreements with Spurs Sports & Entertainment, the San Antonio Express-News reported.

The arena would rise on the site of the former Institute of Texan Cultures at Hemisfair, with capacity for up to 18,500 fans. The deal calls for Spurs ownership to put up at least $500 million and cover any cost overruns. The city would contribute up to $489 million or 38 percent, whichever is lower, not counting the roughly $60 million needed to acquire the site. Bexar County would shoulder another 25 percent of costs — capped at $311 million — through hotel and rental car taxes, pending voter approval in November.

The financing plan relies heavily on development around the arena. Spurs ownership and private partners would be required to build $1.4 billion worth of housing, retail, office and hotel projects on city-owned land in Hemisfair — a downtown grouping of city parks, the Tower of the Americas and the former Institute of Texan Cultures building currently being demolished — phased over 12 years. The first phase alone would include at least $500 million of construction, including a boutique hotel for visiting NBA teams, before the arena opens.

The Spurs’ lease at the Frost Bank Center on the city’s Eastside runs through 2032, and construction of the new facility could take nearly five years, lining up with the start of the 2032–33 season. Under the proposed lease, the team would pay $4 million in annual rent, escalating 2 percent each year, while retaining all arena revenues and operating responsibilities.

The term sheet also sets aside $75 million in community benefits over 30 years, or $2.5 million annually, that the Spurs would provide to the city for programs still to be determined. The team has floated childcare and transit subsidies, along with discounted tickets and local contracting pledges.

If voters reject the county’s venue tax, the deal could collapse. The Spurs have played occasional home games in Austin, Mexico and France under their current non-relocation agreement, but the new deal would lock the franchise into San Antonio for 30 years and set a limit of one foreign game per season and two home games within 100 miles of the Frost Bank Center (a range that would include Austin) per season.

The project is pitched as more than an arena — city officials are banking on it as a catalyst for a convention center expansion, a 1,000-room hotel, a 5,000-seat venue, a land bridge over Interstate 37 and about 50 acres of mixed-use development.

— Eric Weilbacher