San Antonio leaders discussed and decided on a possible avenue to fund the new Spurs arena called a “Project Finance Zone,” or PFZ.
SAN ANTONIO — Since the conversation of a new downtown Spurs arena started, people have been asking: How is the city going to fund it? And will dollars be coming out of their own tax-paying pockets for the venue expected to cost between $1.2 billion and $1.5 billion?
City officials had previously floated five potential funding sources, among them a Tax Increment Reinvestment Zone (TIRZ), private funding, money from the Spurs and a venue tax.
After a San Antonio City Council meeting Thursday, we now have some clarity. There, leaders leaned towards their fifth option: the establishment of a “Project Finance Zone,” or PFZ.
A PFZ consists of a three-mile zone that allows the city to use some state hotel-associated revenues over the course of 30 years to fund local projects. In 2023, City Council created a PFZ to fund projects related to the Alamodome and Henry B. González Convention Center.
Now, after a vote by City Council, they’re abandoning that PFZ in lieu of a new one to also include the proposed Spurs arena. The team – which last month signed a Memorandum of Understanding with the city and Bexar County to advance discussions of a potential downtown move – wants to relocate by 2032, when their lease at the Frost Bank Center on the east side ends.
City members unanimously approved the funding framework Thursday. It remains to be seen how much of the final arena price tag the PFZ revenues could cover.
A new Spurs arena is the crown jewel concept of San Antonio’s overarching plan to create a downtown sports and entertainment district, a blueprint dubbed “Project Marvel.” The arena would most likely be constructed at the site of the former Institute of Texan Cultures building (barring the ongoing lawsuit seeking to halt that building’s demolition).
Revenue from the PFZ would amount to the base amount of money. After that, any revenue over that base amount would go towards the project.
The city estimates the PFZ would bring in $2.5 billion over the next 30 years. It would include money streamed in from hotel occupancy, sales tax and mixed beverage tax revenue from the three-mile radius.