SAN ANTONIO, TEXAS – A significant buzz of transformation is sweeping through San Antonio as the City Council has officially approved a pivotal term sheet with Spurs Sports & Entertainment (SS&E), setting in motion a monumental $1.3 billion downtown arena project. This decision, reached by a 7-4 vote on Thursday, August 21, 2025, marks a critical step towards realizing a comprehensive sports and entertainment district, dubbed ‘Project Marvel’, poised to redefine the city’s urban core.
The proposed state-of-the-art arena, with a capacity of 17,000 to 18,500 seats, is slated for the site of the former Institute of Texan Cultures (ITC) at Hemisfair. This location carries historical resonance, as it will facilitate the Spurs’ return to their original downtown home, where they played at HemisFair Arena from 1973 to 1993. The goal is for the new facility to be operational by the 2032-33 NBA season, coinciding with the expiration of the team’s current lease at the Frost Bank Center.
A Complex Financial Tapestry for the New Arena
The funding model for this ambitious project is a multi-layered public-private partnership. Spurs Sports & Entertainment has committed a substantial minimum of $500 million directly to the arena’s construction, alongside a pledge to cover any cost overruns. The City of San Antonio will contribute up to $489 million, or 38% of the arena cost, whichever is less. This city contribution will be financed through bonds, to be repaid by future Spurs lease payments, ground leases from new development, local property tax capture zones, and state hotel-related taxes through a Project Finance Zone (PFZ).
Bexar County is poised to add up to $311 million, or 25% of the cost, through a dedicated venue tax. However, this crucial portion of funding is contingent on voter approval in a November ballot initiative. It’s important to note that the financing structure is designed to avoid raising general property taxes for San Antonians.
‘Project Marvel’ Envisions a Revitalized Downtown
The new Spurs arena is the centerpiece of the broader ‘Project Marvel,’ a multi-billion-dollar initiative aimed at creating a vibrant sports and entertainment district in downtown San Antonio. This expansive vision includes an expanded Henry B. González Convention Center, a renovated Alamodome, a new Convention Center Hotel, and the transformation of the John H. Wood Jr. Federal Courthouse into a live events venue. Additionally, the plan calls for over $1.4 billion in private development, including housing, retail, offices, and a boutique hotel, to be built by SS&E and private developers over a 12-year period.
A key enabler for the arena’s location was the conditional approval by the University of Texas System Board of Regents for the City of San Antonio to purchase the 13.59-acre Hemisfair Campus property, currently occupied by the Institute of Texan Cultures. This clears the way for the demolition of the existing ITC building, a move that has generated discussion due to its historical designation.
Contentious Vote and Calls for ‘Strategic Pause’
The City Council’s decision came after a lengthy and often passionate six-hour meeting, reflecting the divisive nature of the proposal. Mayor Gina Ortiz Jones, a vocal proponent for more due diligence, led a minority of council members (4-7) in a failed attempt to instigate a ‘strategic pause.’ Mayor Jones advocated for an independent economic impact study and increased community engagement, asserting that the current economic analysis was conducted by a Spurs-hired consultant.
Despite the pushback, the majority of council members, including Sukh Kaur (D1), Phyllis Viagran (D3), Edward Mungia (D4), Marina Alderete Gavito (D7), Ivalis Meza Gonzalez (D8), Misty Spears (D9), and Marc Whyte (D10), voted to move forward, expressing trust in the partnership and the current deal. Supporters highlighted the importance of keeping the Spurs in San Antonio and the potential for significant economic revitalization in the downtown area.
Looking Ahead: A New Era for San Antonio
The approved term sheet, while non-binding, lays down the framework for future legally binding agreements, including a crucial 30-year non-relocation agreement for the Spurs. Under this agreement, the team will pay an initial annual rent of $4 million, with a 2% increase each year. Spurs Sports & Entertainment Chairman Peter J. Holt expressed confidence in the project’s ability to foster maximum mutual benefit and urged the community to support the upcoming Bexar County venue tax vote, emphasizing that the project is about more than just an arena; it’s about the city’s future.
With this current news, the focus in Texas now shifts to the November ballot, where Bexar County voters will have the final say on a critical piece of the financing. This ambitious undertaking signifies a bold step forward for San Antonio, aiming to create a vibrant, world-class destination that will generate jobs and cultural buzz for generations to come. The design and construction phase is expected to span up to 57 months, leading to a much-anticipated grand opening for the 2032-33 NBA season.
