San Antonio unveils first details about ‘Project Marvel’ sports & entertainment district

The San Antonio City Council received their first public briefing about the Sports & Entertainment District the city code-named “Project Marvel,” which has been hidden behind a veil of non-disclosure agreements up until now.

A price tag for any part of Project Marvel, including the new Spurs arena, remained elusive during Thursday’s meeting.

Assistant City Manager Lori Houston said during a private media briefing on Wednesday that an email the San Antonio Express-News first obtained through a public records request in which she wrote that Project Marvel would have a price tag between $3 billion and $4 billion was a general figure, and that the actual price could be above or below that range.

But she did make one major commitment to San Antonio residents regarding the potential new Spurs arena: “The arena will not be funded by the general taxpayers.”

But Heywood Sanders, a public administration professor emeritus at the University of Texas at San Antonio, said he wasn’t convinced public dollars wouldn’t play a major role in the arena.

“It’s a peculiar piece of sleight of hand,” Sanders said. “To say no general taxpayer dollars will be used is correct in the narrowest possible sense.”

Major facilities in discussion for the district include the Spurs arena on the site of the Institute of Texan Cultures (ITC) near Hemisfair Park, a land bridge over IH-37 connecting the East Side to downtown, expansions to both the Henry B. Gonzalez Convention Center and the Alamodome, the addition of a new Convention Center hotel, a live entertainment venue in the John Woods Courthouse, and roughly 50 acres of mixed use residential and commercial development.

City Manager Erik Walsh said there would be a variety of different funding mechanisms for each piece of Project Marvel, including private equity, private development, tax credits, and others. Funding from sources such as the rental car tax and the county’s venue tax would need voter approval.

Voter approval would also be required for general obligation bonds issued by the city, which would likely be needed for infrastructure improvements Houston said would “make or break” the project’s success.

The city has already spent roughly $3.5 million from its Capital and Redemption Fund to hire consultants Populous, CSL, RLB, and Pape Dawson for assistance in master planning, feasibility and revenue projections, cost estimates, and infrastructure and traffic analysis.

All development west of IH-37 — the Convention Center expansion, Convention Center hotel, John Woods Courthouse entertainment venue, the Spurs arena, and mixed-use development — is scheduled to be completed or under construction in the next one to five years.

The Alamodome upgrades will take significantly longer — five to 15 years. Houston said that’s largely because the city has already committed use of the Alamodome to the NCAA for the women’s Final Four in 2029.

Downtown Spurs arena

Houston repeatedly said that the general taxpayer would not pay for a new Spurs arena downtown.

And she pointed out that in many of these funding options, it is developers, not the average resident, paying the taxes that could be used to fund the Spurs arena or other pieces of Project Marvel.

But Sanders said funding bases such as Bexar County’s venue tax or the city’s tax increment financing programs are still pulling from public dollars that could be used for the public good.

“And that venue tax, which involves a tax on hotel rooms and rental cars, is a public revenue source,” he said. “We have used it for other things in its second incarnation from the county, and it could be usable by the public for a whole host of public benefits.”

Bexar County voters would have to approve such a use of the county venue tax.

Scott Ball for Texas Public Radio

The City of San Antonio has signed a memorandum of understanding (MOU) with the University of Texas System for a right of first refusal to acquire the 13.45-acre ITC property, the Spurs’ desired site for a new arena, which would give the city the first opportunity to purchase the land.

Houston said the city believed they could still raze the ITC structure despite a recent state antiquities landmark designation.

The Spurs have not yet shared a price point for the arena or how many seats it would hold.

The city has also initiated the process to acquire the Federal Building and surrounding parking lots owned by the General Services Administration near the ITC, which would be needed for the arena.

District 2 Councilmember Jalen McKee-Rodriguez said he felt “cautious optimism” about Project Marvel’s ability to right past wrongs, and that much would need to be done for the East Side for the Spurs section of the project to get his support.

“I’ve conveyed to city staff, and I’ve conveyed to the Spurs, how you leave a community is more important than how you found it,” he said. “And if and when the Spurs leave the Frost Bank Center, they need to leave my community in a much, much better position than we’re in today.”

The Alamodome and Frost Bank Center, originally called the AT&T Center, came with promises of East Side economic development that never materialized.

IH-37 land bridge

The city has also received a $2.9 million grant from the U.S. Department of Transportation to initiate a public planning effort to discuss what capping IH-37 with a land bridge, connecting the East Side to downtown, would look like.

McKee-Rodriguez, whose East Side district includes the largest number of Black residents in the city, said the IH-37 land bridge was what excited him most about Project Marvel.

“You all know that highways and train tracks have been used historically as tools of segregation and redlining, and ours segregate our historically Black neighborhoods and businesses from downtown and the rest of the city,” he said. “You go from seeing a beautiful, vibrant convention center and immediately are drawn to a dark underpass that screams, ‘do not cross. Do not go here.’”

But McKee-Rodriguez said he would need the land bridge to be a place that centered residents and community input before he could support it.

Walsh said the city is looking to other cities like Kansas City who have embarked on highway capping projects of their own. He said the city wants a large park over the highway, but one not as wooded and natural as the Robert L.B. Tobin Land Bridge in Hardberger Park.

Henry B. Gonzalez Convention Center Expansion & Convention Center Hotel

Houston said the city was about 75% of the way through the feasibility study process for expanding the Convention Center. She said expansion was necessary to accommodate more conventions and visitors.

Houston said the city estimates that it lost out on hundreds of thousands of visitors and hundreds of millions of dollars in revenue over the last five years because of a lack of space in the Convention Center.

The city would like to grow the Convention Center’s exhibition hall space alone by 150,000 square feet, as well as adding new ballroom and meeting room spaces. The new Convention Center expansion would abut Civic Park.

The city would need to move the San Antonio Water Systems chiller plant across the street from the Convention Center to add a new 1,000-room Convention Center hotel.

The new hotel would include 20,000 square feet for UTSA’s School of Hospitality, 26,000 square feet for food and beverage and retail, and more than 1,000 parking spaces.

The city is considering moving the chiller plant several blocks north of its current site.

Alamodome upgrades

Houston said the NCAA told the city last year that they would not host any future Final Four basketball events in San Antonio beyond its 2025 and 2029 men’s and women’s Final Four tournament commitments without upgrades to the 30-year-old stadium.

Houston said the city expects $250 million in revenues generated by the men’s Final Four tournament next April.

San Antonio also hosted the men’s college basketball tournament in 2018.

The city is envisioning upgrades that enable the Alamodome to host NCAA College Football Playoff games, international soccer games, and which adds luxury seating and suites.

New entertainment venue

The city is also planning to convert the John Woods Courthouse into a live entertainment venue accommodating 5,000 seats.

Houston said part of the reason to do this is to move some of the smaller events that are held in the Alamodome to free it up to primarily host large events that bring in more revenue.

She said the John Woods Courthouse project could likely benefit from a public-private partnership. “We don’t think it needs to be funded entirely by the public,” she said.

Houston said the John Woods Courthouse cannot be destroyed because of a deed restriction on the property, but it can be repurposed as the city is proposing.

Infrastructure improvements

Infrastructure improvements around the Sports & Entertainment District “could make or break” Project Marvel, according to Houston.

Houston said the city is currently studying a variety of possible scenarios that could drive up congestion in the area and what they would need to do to improve infrastructure to support those scenarios.

The result will almost certainly be major improvements to nearly everything in the area.

“That’s not just city infrastructure,” she said. “It could be SAWS infrastructure. TxDOT infrastructure, federal highway infrastructure.”

Houston said the city also needs 10,000 more parking spaces in addition to the 10,000-15,000 spaces already within a quarter mile of the district, which it needs to figure out how to build while minimizing the disruption to surrounding neighborhoods.

What comes next

The city is beginning to engage the public on what they want included in Project Marvel and will try to establish an MOU with Bexar County and the Spurs to set up a framework for how they’ll move forward on a new Spurs arena.

It’s not yet clear what role each of the three entities will play in the financing and ownership of the arena.

The city will brief the city council on the completed feasibility study for the Convention Center expansion on Dec. 4. It will be the first of several feasibility studies the city will present to council about how the individual Project Marvel projects can be carried out.

And several council members made their own suggestions for what they want to see as Project Marvel moves forward.

“I won’t vote for a deal unless it includes a community benefit agreement with the nonprofits here in town and with community advocates,” District 8 Councilmember Manny Pelaez said. “That has to be done. I won’t also entertain a deal that doesn’t include a mandatory, competitive minimum wage at the stadium, including the janitors and everybody who works there.”

Pelaez said he also wanted the city to consider a way to earn a cut of the broadcast and licensing revenue the Spurs games generate.

District 5 Councilmember Teri Castillo said she wanted UNITE HERE Local 23, the union representing hospitality workers in San Antonio, to play a major role in the project’s development because of how it will impact them.

Sanders — the stadium financing expert — said Project Marvel needed sustained scrutiny.

“We need to ask some serious questions, and we need not to be dismissed when we ask them,” he said.