“Project Marvel,” San Antonio’s billion-dollar project to build a new Sports and Entertainment District, has dominated local politics with growing pushback. On Aug. 21, San Antonio City Council voted 7-4 to approve a term sheet for the new arena, one piece of the project, rejecting calls from Mayor Gina Ortiz Jones for an independent study on the economic impact costs would have on the city. The troubling reports and the inconsistent history of arena-focused urban development raise rightful public concern about Project Marvel, especially as San Antonio faces rising debt and cuts to public projects.
If you’re a Spurs fan like me, it’s easy to root for the glitz and glam of a new arena, but it’s a risky business. Cities endanger taxpayers by subsidizing billionaire owners’ projects that give little public returns. As we move closer to the November county vote to raise the venue tax — which would primarily affect tourists — it’s crucial to untangle the promises of a new arena from the financial risks to the city.
The city’s term sheet puts the arena at $1.3 billion over 57 months. While the Spurs would provide $500 million in funding, the city would pump $489 million in bonds. In addition, Bexar County would bankroll up to $311 million from the venue tax, including a slight increase on hotel taxes while maintaining rental car tax rates. According to the Aug. 29 Community Engagement Report, city funding would come from debt repayment bonds that would be paid back by the Spurs’ rent, private ground leases, property taxes and other private developments within the Hemisfair Tax Increment Reinvestment Zone.
The Spurs used Stone Planning’s economic analysis of the costs and benefits. But, a recent city-funded proposal from Conventions, Sports & Leisure (CSL) International for the entirety of Project Marvel showed the total cost at a staggering $4.0 billion over 30 years. CSL’s study has deservedly prompted public flak, promising big assessments for cities that deliver little.
CSL’s parent company, Legends, owns a 20% stake in the Spurs. This blatant conflict of interest not only sows skepticism, but CSL adds insult to injury with its long history of inaccuracies. Most notably, they miscalculated city returns for a new D.C. United soccer stadium in 2014 by $70 million — two-thirds of the proposed benefits. Susan Strawn, a former San Antonio councilmember, argued that CSL doesn’t even provide an underlying rationale based on market analysis in its methodology. Nevertheless, it was good enough for the seven city council members.
My biggest concern about Project Marvel is who pays and who gets the benefits. The current funding details depend on the tourism industry and the bonds. San Antonians need transparency for where the initial money for bonds will come from. The combined $800 million is steep, even if the money comes from tourist dollars rather than taxpayer ones. The city will be operating on a budget with a ballooning deficit nearing $150 million by 2026, forcing cuts to affordable housing, sidewalks and eliminating 68 city jobs.
San Antonio unions have continuously voiced concerns, calling for public investment in education, housing and public transit. This sentiment culminated in a joint Labor Day protest on Sept. 1. In a city with 17.7% poverty, educational concerns and poor public transit, Project Marvel could be a band-aid on a growing wound. With CSL’s ties to the Spurs and Stone using metrics from the Spurs, it’s only fair to be doubtful about what the results are.
It’s easy to be against new stadium construction with the city on the hook for hundreds of millions. For taxpayer concerns, Texas state law enforces that venue taxes can only be used on entertainment funding, not other municipal projects. Stone expects it to generate $225 million annually, adding 1,003 jobs to the county. These are needed benefits that these taxes can only provide, but there are still lingering questions about where the money for the city bonds come from and where the rest of Project Marvel’s funding will come from.
Of course, none of this matters without a vote. On Nov. 4, Bexar County residents will vote to appropriate an initial $311 million for arena construction, 25% of the total cost. That’s only a few months out, and much of the proposal is still up in the air without voter approval. The response from San Antonio workers and unions — the people who will be staffing everything Spurs related — deserve transparency. For now, it may be too late.
