Revenue bonds for San Antonio Spurs arena won't go to voters

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Up to $489 million of revenue bonds to help finance a $1.3 billion arena for the National Basketball Association's San Antonio Spurs can be issued without being subject to voter approval after the city council on Monday narrowly rejected a move to place the debt on the Nov. 3 ballot.

The council's 5-6 vote defeated a debt election proposed by Mayor Gina Ortiz Jones, who raised concerns about a "significantly" changed economic environment since negotiations with the team commenced a year ago, as well as a projected $158 million deficit in the city's fiscal 2027 budget.

Opponents of the move argued that city voters already voiced their support when a ballot measure to generate up to $311 million from a Bexar County hotel occupancy tax rate hike and continuation of a rental car tax for the arena was approved last year.  

Some council members noted the city routinely authorizes revenue bonds without voter approval. 

"We should be very careful about establishing a precedent that every significant revenue bond decision requires another election simply because the dollar amount is large," Council Member Misty Spears said. "As elected officials, we routinely make decisions involving substantial public resources. That is part of the responsibility voters entrusted to us."

The city or an entity it controls would issue bonds backed by the team's arena lease payments over 30 years, ground rent from leases of city property to private entities, and incremental increases in property and state hotel occupancy tax revenue generated in downtown tax increment reinvestment and project financing zones.  

San Antonio Chief Financial Officer Troy Elliott told the council the city's general fund will not be on the hook to pay off the bonds, which will only rely on pledged revenue. 

"There's going to be certain benchmarks and measures that we want to make sure that happen in advance before we issue those bonds," he said.

The Spurs would contribute a minimum of $500 million for the arena and would be responsible for covering any cost overruns. The team would operate and maintain the arena, which would be owned by a city-controlled entity, and would retain revenue from operations and naming rights. It would also contribute $2.5 million a year up to a total of $75 million to the city under a community benefits agreement.

Substantive negotiations for the arena are expected to be complete by December, according to a June update.

The arena is part of a proposed sports and entertainment project dubbed Project Marvel, which includes an expanded Henry B. Gonzalez Convention Center and an upgraded Alamodome stadium.

The Spurs currently play in the county-owned Frost Bank Center in San Antonio, which opened in 2002 and underwent a more than $110 million renovation in 2015.