Why I Support the Community Arena
Commissioner Tommy Adkisson
October 28, 1999
I was practically raised in a gym by my basketball coach father. But unlike my father, I aspired to coach people in a civic or even political sense. I am not much of a spectator of anything so in the twenty-five years the Spurs have been here in San Antonio, I have attended only eight or so games. All of them were fun, but my heart has always been elsewhere.
But if I am really not that excited about going to all the games, why do I support the arena? For one, this question is more than just about me or the Spurs for that matter. It takes no more than a casual ride down any of our expressways to see visible evidence of support for the San Antonio Spurs. Just count the bumper stickers, even flags still and yes, even the white shoe polish messages on the cars' rear windshields. I could go on with other barometers of support.
Let's go back to the day when I took over the office of County Commissioner earlier this year. I knew that the rodeo had been sold-out for the past seven years. What I had no way of knowing was that the San Antonio Spurs would become the NBA World Champions. The rodeo's needs combined with Spurs' search for a more adequate home relative to their current home in the NFL/convention-designed Alamodome, drives the current election.
Several other important factors drive this process. Leisure Management International stated in its San Antonio New Arena Study in 1998 that "For San Antonio to sustain itself as a destination for major touring acts, professional and amateur sporting events and family shows and to continue to compete with other cities both, regionally and nationally, there is a definitive need for a new 18,000 to 20,000 seat arena."
Of significance too is the fact that the Alamodome has 65,000 seats while the average Spurs attendance is 16,500. Thirty-seven skyboxes were sold when the Spurs first went into the Alamodome. Today only eleven are sold due in no small part if not exclusively to the fact that arguably the highest-priced, worst seating at the Spurs games is in the skyboxes! And that may not be a problem for college teams which require no salaries, but not for the ever-competitive NBA where every revenue component plays a critical role in the success of the team's ability to recruit and retain high talent players.
The Spurs asked the County to present its proposal to the voters for approval because of several reasons. For starters, the County believed that this community did not want to finance an arena with a sales tax. The Spurs agreed.
Hence, the County proposes a joint public-private project with a hotel-motel tax and short-term car rental tax to secure $146.5 million in bonds payable over about twenty years. These taxes automatically expire when the bonds are paid. The Spurs pay a minimum of $85 million with $28.5 million to be paid up-front along with $1.3 million in rent annually as well as $1 million to a capital repair fund. Additionally, the Spurs will assume all construction cost overruns, operating losses and on-site environmental costs.
Much has been made of the County sharing in the profits of the Spurs. So, the County secured concessions from the Spurs so the County may receive 20% of Spurs net income greater than $4.75 million annually. Also the County is entitled to receive 20% of naming rights over $1.875 million annually. Much of these two factors is linked to the rather low media value reflected in our being number 38 of 38 media markets.
In return for their investment, the Spurs would receive the right and responsibility to manage the facility, providing that the San Antonio Livestock Exposition (SALE) would be guaranteed an ample basis and time to conduct their business during the entire year, not just during the rodeo. As part of their deal, SALE pays $1.2 million with a limited escalator to $1.4 million in rent over a 25 year lease and $300,000 annually into a capital repair fund.
At one point, due to the difficulty of negotiations, the Spurs offered the County an opportunity to rent to the Spurs instead of having the Spurs undertake to build the arena. This would have necessitated the County raising $175 million instead of $146.5 million. Also, the County would have been "on the hook" for construction cost overruns, operating losses and on-site environmental costs any or all of which could have been substantial multimillions! So we declined.
It is important to remember that this is the first facility in Bexar County to receive any private money for its construction. The Joe & Harry Freeman Coliseum did not. Neither did the Alamodome or Wolff Stadium!
Several remaining issues are also incorporated into the County plan:
- The Alamodome: The Spurs will pay the City of San Antonio $250,000 annually and 50% of all events jointly marketed by the Spurs and the City of San Antonio where revenue is over $500,000.
- Infrastructure: An interlocal agreement is being drawn between the City of San Antonio and Bexar County whereby streets, drainage and traffic control is improved around the Coliseum area.
Also, City bond and Metropolitan Planning Organization monies exist to address these areas as well.
- Impact on Tourism: Steve Moore, Director of the San Antonio Convention and Visitor's Bureau stated on July 21, 1996 in the San Antonio Express-News that "Hotel taxes are just one element in the constellation of factors that convention planners consider when picking meeting sites…hotel rates, air fare, tourist attractions and the meeting facilities themselves all get evaluated." San Antonio's hotel rates are neither the highest nor lowest nationally or regionally. Thre should be minimal if any impact.
One last thing: we have been told that the community wishes to keep and maintain the existing Joe & Harry Freeman Coliseum. We agree. This facility will continue to host area graduations, sports competitions and other community events under the management of the Coliseum Advisory Board.
So there you have it. This is a rare moment for our community. Hope you can find your way clear to support this new mid-level sized arena for Bexar County!