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San Antonio Officials Secretly Woo Spurs to New Downtown Arena

They approached the NBA basketball franchise, hoping to revive the city's sleepy downtown. But the city didn't inform Bexar County officials, even though the Spurs are the anchor tenant of the county's $175 million arena.

Months before the Spurs landed French phenom Victor Wembanyama in the NBA draft lottery, a stroke of luck that instantly brightened the team's prospects, San Antonio officials approached the franchise to engineer a transformation of their own — a new basketball arena to revive the city's sleepy downtown.

And they did it without informing Bexar County officials, even though the Spurs are the anchor tenant of the county's $175 million Frost Bank Center (previously the AT&T Center) on the East Side.

"The Spurs didn't approach the city — the city approached the Spurs, without talking to the county first," said a person who was briefed on the discussions.

Former County Judge Nelson Wolff said that's his understanding, too.

Charlie Amato, a Spurs investor and chairman of SWBC, a San Antonio insurance and financial services company, said "it wouldn't surprise me" to learn that city officials initiated the talks with the Spurs.

"There's a big movement right now to revitalize downtown," he said.

City Manager Erik Walsh has confirmed he met twice with Spurs executives and once with the owners of the San Antonio Missions minor league baseball team, who are scouting for a location for a stadium in the urban core.

Sources have said the teams — who have several investors in common, including Spurs managing partner Peter J. Holt — are exploring the idea of a downtown professional sports district with a basketball arena, a baseball stadium and restaurants, bars and retail outlets for fans.

San Antonio's central business district, which is still struggling to get over the COVID pandemic, could use the excitement.

The convention and meeting business, anchored by the Convention Center on East Market Street, is recovering but slowly. Many downtown companies, whose employees now work from home or come to the office only once or twice a week, are reconsidering how much space they need to lease. That means slower lunch hours at restaurants and fewer people meeting for drinks after work.

Walsh declined to disclose the nature of his discussions with the Spurs and Missions. But a batch of city officials' emails and text messages obtained by the San Antonio Express-News under the Texas Public Information Act indicate city leaders have been talking with top Spurs executives about the possibility of a downtown arena since January, if not earlier.

Although neither side will reveal details of the conversations, the list of people involved suggests they were serious.

In addition to Walsh, the participants have included Mayor Ron Nirenberg, Spurs General Manager R.C. Buford, the franchise's general counsel, the city official in charge of economic development and sports facilities, and the chief financial officers of both the Spurs and the city.

The Spurs won the NBA draft lottery in May, and in June the team used the No. 1 pick to select Wembanyama, a 7-foot-3-inch teenager regarded as a once-in-a-generation talent. The city's overtures to the Spurs about a downtown area began months earlier.

On the night of Jan. 13, the Spurs celebrated their 50th anniversary as a San Antonio franchise by playing the Golden State Warriors at the city-owned Alamodome.

It was the first time the team had played on its former home court since moving to the county-owned arena on the East Side in 2002. The Spurs lost, but the matchup drew 68,000 fans, shattering the NBA's single-game attendance record.

Bobby Perez, general counsel of Spurs Sports & Entertainment, was revved up.

"Thanks for the assist in making NBA history!!!!" the former District 1 city councilman and lobbyist said in a text message to Walsh at 10:45 p.m. that night.

"A great event, Bobby! We need more games downtown," the city manager replied, adding a blushing, smiley-face emoji.

Perez followed up five days later, texting, "Let's discuss next steps re: downtown"

The text messages disclosed to the Express-News do not identify the city official who was communicating with Perez. But Laura Mayes, a spokeswoman for the city government, confirmed it was Walsh.

The Spurs did not respond to questions about the email and text exchanges with city officials.

After their mid-January back-and-forth, Walsh reached out to Perez on Feb. 6: "I spoke to Alex. Can we talk in the next day or so?"

Perez answered yes.

According to Mayes, Walsh was referring to Assistant City Manager Alejandra "Alex" Lopez, whose responsibilities include overseeing the city's convention and sports facilities and its Economic Development Department.

Three days later, Perez texted: "My staff is going to reach out to your office to find a date for RC & I to meet w you."

"I was thinking just now that I need to touch base with you," Walsh responded.

On March 23, the city manager wrote, "Do you know when we're meeting?"

On April 11, Walsh and Nirenberg went to the East Side arena complex to meet with Buford and Perez. Asked about the substance of the meeting, Mayes said, "There is nothing to share."

On June 15, the city's chief financial officer, Ben Gorzell, arranged a meeting via text message with Joe Loomis, the Spurs' senior vice president of finance, technology and culinary operations. The two met at City Hall on June 23, but what they talked about wasn't revealed in their text message exchanges, and the city did not respond to a question about the meeting.

If plans for a downtown arena move ahead, they probably would hinge on public financing, either through a sale of bonds or a tax increase, either one of which would have to be approved by voters.

It's unclear where in downtown the complex would be built. Hemisfair has been mentioned as a possible site, in particular the outmoded Institute of Texan Cultures. So have the Alamodome, the Lone Star Brewery complex and land adjacent to Fox Tech High School.

"The city and the Spurs have to have a conversation," said a source who's knowledgeable about how such projects come to fruition. "The city has to see some kind of plan from the Spurs — on the location of an arena and how to pay for it."

A new basketball arena could cost $1 billion or more, judging from the price tags of the most recently built NBA venues. The newest is Chase Center, the Golden State Warriors' home court, which cost $1.4 billion and opened in downtown San Francisco in 2019.

The Fiserv Forum, home of the Milwaukee Bucks since 2018, cost $1.2 billion, and the Brooklyn Nets' Barclays Center opened in 2012 and cost $1 billion.

The city of San Antonio has a new pot of money it could tap for a downtown arena, thanks to a bill passed by the Legislature this year. It allows the city to pay for improvements to sports venues using what is normally the state's cut of sales taxes generated by hotels within 3 miles of the Alamodome and the Convention Center.

The city's overall take under the arrangement is estimated at $222 million, and the legislation makes both of those venues and "any arena, coliseum, stadium" or other sports facility eligible for funding.

Walsh has said the city would use that money to expand the Convention Center and make improvements at the Alamodome. There has been no public discussion of using it for a new Spurs arena or a baseball stadium.

Nearly a year ago, Nirenberg and Walsh met with the Spurs' Buford and Perez to discuss "facility infrastructure," according to a flurry of emails between executive assistants struggling to arrange the Sept. 19 meeting. But it's unclear what "facility infrastructure" they talked about.

Wolff, who retired in December after 21 years as Bexar County judge, said he didn't think city officials approached the Spurs about a potential downtown arena under his watch and that the discussions started this year. But another person familiar with the talks, who requested anonymity, said the contacts likely began in 2022.

The Spurs' lease for the 19,000-seat Frost Bank Center expires in 2032. If the team leaves the facility for a new arena between now and then, the county would be left without an anchor tenant — and with a cavernous arena with maintenance and operational expenses.

The San Antonio Stock Show & Rodeo would continue to fill the arena, the adjacent Freeman Coliseum and the surrounding grounds every February. But county officials would have to line up a new tenant or bring in enough events — trade shows, conventions, concerts and sport events — to pay the bills.

County Judge Peter Sakai, who took office in January, is having to consider that scenario, though he told the Express-News in July: "We're already in the process of developing a strategy to keep the Spurs in the AT&T Center." (The arena was rechristened Frost Bank Center this month under a naming rights deal.)

That plan could include seeking voter approval for an increase in the hotel and rental car tax — also called the visitor tax — to pay for upgrades to the Frost Bank Center and a spate of other venues, including the downtown Tobin Center for the Performing Arts and amateur sports facilities.

Wolff said moving the Spurs out of the Frost Bank Center could set off a fierce competition for large events between the county and the city, which owns the Convention Center and Alamodome.

"That makes absolutely no (expletive) sense — the AT&T Center is a very good arena," he said.

Sakai, who did not respond to an interview request for this story, feels the same way and "has said similar things in private," an associate said.

(c)2023 the San Antonio Express-News. Distributed by Tribune Content Agency, LLC.

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