Critics question using tax zone to buy land for new Spurs arena
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Skeptics of a plan to use public money to help finance a new Spurs arena are raising questions about a special tax zone that would fund the purchase of land for the project.
Why it matters: The city financing tool, called a tax increment reinvestment zone (TIRZ), is intended to revitalize neighborhoods that lack amenities, but critics question whether the downtown area where the arena would be built is a good use of that tax money.
Driving the news: The City Council is slated to vote Thursday on the extension of four TIRZs — including one that could fund land for the arena — through 2060.
- Without the extension, the city wouldn't use the TIRZ to pay for the former Institute of Texan Cultures site at Hemisfair where the arena is planned, city manager Erik Walsh told councilmembers last week.
How it works: When the city creates a TIRZ, it freezes the property tax base within the zone. As new development arrives, property values rise — but the additional taxes paid from that value increase go into a TIRZ fund, instead of going to the city's general fund budget (which pays for things like police, fire, parks and libraries) as property taxes typically do.
- City councilmembers and a council-appointed board must approve funding requests for the TIRZ.
- The funding is intended to promote development in a specific area, especially by financing infrastructure like streets or sidewalks.
- But its uses can be broad — the council will also consider using Westside TIRZ funding for a pilot program to redirect some people from the jail to mental health treatment, for example.
Reality check: The funding can be used outside the zone for affordable housing and "areas of public assembly," according to state law.
- The planned site of the new arena is outside the Midtown TIRZ, which the city wants to use to purchase the land for it.
- That strays from the original purpose of the TIRZ, UT San Antonio political science professor Jon Taylor tells Axios.
- "The problem is that the promise of the TIRZ doesn't always pay off," Taylor says.
Catch up quick: The city created the Midtown TIRZ in 2008. It includes areas just north of downtown, like Brackenridge Park and Pearl. It now includes some of the most affluent neighborhoods in the city.
- The Midtown TIRZ is set to expire in 2041 unless the council extends it through 2060.
- In addition to considering funding to purchase the former Institute of Texan Cultures land, the council will also consider Midtown TIRZ funding for improvements at the San Antonio Zoo, Botanical Garden and more.
- The Midtown TIRZ board last week approved the funding for the arena site in a 7-4 vote.
What they're saying: Mayor Gina Ortiz Jones has questioned whether the TIRZ should be extended.
- "One of the reasons that these can be initiated, and why some of these were initially originated, is … to address blight. Some of these areas are no longer blighted," Jones said at a meeting last week. "And we have areas in the community that remain blighted and would be well-served by these resources."
East Side Councilmember Jalen McKee-Rodriguez said a TIRZ can offer creative funding for worthy projects — he has championed a new senior center planned in his district with the use of TIRZ funding. But he said they can also be exploited — and he opposes using the TIRZ to buy land for the arena.
- "TIRZ zones have the potential to be used for great things, and as a tool of equity when we're doing what they're designed to do," McKee-Rodriguez said. "The reason the TIRZ have become more controversial is because some of them have deviated, and we're watching TIRZ dollars fund some of the most controversial projects for any community, namely sports venues."
What's next: The City Council meets at 9am Thursday.