1. What is Bexar County's Financing Plan?

Bexar County would fund the project costs, including debt service, from four sources of revenue.  The following lists the estimated annual revenue in the year 2000 from each source.

San Antonio Spurs  Lease Payment - $1.3 million
San Antonio Livestock Exhibition Lease Payment - $1.2 million escalating by $50,000 annually for the first five years and then by a CPI thereafter.

Hotel Occupancy Tax $9 million
Car Rental Tax $6 million

An additional $28.5 down payment by the Spurs during construction will be applied directly to the cost of the project.

The County is continuing to work to finalize a financing plan that provides the funds required for the project at the least cost to the citizens.  Initial financing options have been analyzed.  The debt service costs associated with these various options depend on the length of the debt and the interest rates. 

Revenue bonds will be issued by the County with payment guaranteed by the revenue streams listed above.  The financing plan will include substantial reserves.  The plan uses no sales and use tax and Chapter 334, Local Government Code prohibits the payment of the bonds to be guaranteed with funds from the County's ad valorem tax revenue. 

2. What about traffic and drainage at the Freeman Coliseum?

Traffic Issues:  As with all new developments within the City limits, the County will work with the City on a plan for traffic flow in and out of the new arena. The rodeo hosts more than 100,000 visitors a day, or 1.2 million visitors over a 16-day period.  In the past, the County has talked with the City regarding the configuration of the streets in the area that serve rodeo participants and on more than one occasion, the City has stated that the streets are adequate to handle the rodeo traffic levels. Now, that the arena project is being proposed for the Freeman site, the City is questioning whether the City's own streets will be adequate to handle the less than 20,000 people attending each of 45 separate Spurs games over several months. 

The County wants to work with the City and the residents of the area to plan traffic flows.  The County does not want to usurp the responsibility of the City in their role of coordinating public access with proposed public developments.  If the voters give the County approval to move forward with this project, just as with all developments, the streets at the Freeman site are City streets, and the City would want to design and construct the streets to their specifications. Currently, the project budget of $175 million does not include funding for any off site improvements.  If, after further study, offsite improvements become necessary, the County will explore all funding options.  

The County has contacted VIA to discuss plans for public transit to the arena and VIA has offered to help plan public access to the facility.  The Spurs have a long, positive working relationship with VIA and have stated that just as when the Spurs played at the Alamodome, VIA will have a presence at the Arena.

Drainage Issues: As with street improvements, the County has tried in the past to work with the City on drainage improvements around and outside the coliseum area.  In fact, City of San Antonio Public Works Director John German addressed the drainage issue in a June 28, 1999 letter to Coliseum Advisory Board Executive Director Hymie Gonzales.  Mr. German indicated in this letter that the City would perform maintenance on existing city pipe culverts crossing Houston Street, and on the bar ditch along Houston Street.  He also notes that "drainage project #1026 Coca Cola Drive" is necessary to address the Houston Street/Coca Cola Drive drainage needs at a cost of $957,000 and that the City project will be added to the list for City consideration at a later date when funding becomes available. 

3. Are there environmental issues at the Freeman site?

Bexar County and the Coliseum Advisory Board have controlled the Freeman site for 50 years and we know what has occurred on the site since we have owned it.  Findings from a  Phase I study of the site were discussed with the Coliseum Advisory Board and Bexar County's Environmental Services Division on August 17^th.  The final Phase I Environmental Report was delivered to the County and Coliseum Advisory Board August 23^rd .  The Phase I study found no significant issues with the proposed location of the new arena on the southeast corner of the Freeman grounds.  Planning and development of the site will include subsurface site investigation to assess the soil and groundwater conditions.  Plans also call for an environmental investigation of the northern portion of the property, the site of a City landfill closed in 1984.  The Phase II will confirm the 1987 Texas Department of Health Inspection that indicated the site was properly closed.

4. What impact will constructing a new coliseum  at the Freeman site have on the future viability of the Alamodome?

When the Alamodome was proposed to the voters in the late 1980's, it was sold as an expansion of the City's convention facilities, not where the Spurs would play.  With the Spurs out of the Alamodome, the facility can be made available for use by more conventions, trade shows, concerts, and other appropriate events.  These events will no longer have to be scheduled around Spurs games nor will as many potential lease dates be lost due to conversion time to and from a basketball configuration.   The facility has a proven track record and the infrastructure for handling major events which places it in a good marketing position to attract and book events.

The County views the new arena as an expansion of the local options for event venues.  It is the County's desire to join with the City in joint promotion and marketing of these venues.          

5. What will be the impact of the 1-3/4 cent increase of the Hotel Occupancy Tax (HOT) and the short term rental tax on the local economy?

Based upon data collected by MGT of America, Inc.  (MGT) for the County, the Texas Department of Economic Development shows no negative impact from the two percent increase in the HOT implemented in Houston (15 % to 17%) to fund their new arena.  The tax was implemented in October 1, 1997 and in 1998, Harris County's hotel business grew by more than 14 percent over the prior year.  State average for growth in the industry was 11.6 percent. 

Similarly, the City of Dallas implemented a two percent increase in the HOT tax and a five percent tax on the rental car tax to fund their sports venue project in September 1998.  The tax has brought in so much more revenue than was originally projected that the City of Dallas may consider repealing the tax levy sooner than planned.  Collections on the rental car tax are up 30 percent over projections, while the HOT tax is up 15 percent over projections.

According to the Hotel Performance Data provided by the Texas Department of Economic Development, there is no apparent negative economic impact, through the first quarter of 1999,  in the communities where the HOT has been used as the funding mechanism for sports and community venue projects.

The County has reviewed additional data provided by MGT of current room rates including taxes of cities in Texas and around the nation that compete with San Antonio for tourist and convention business.  That data shows that San Antonio has the lowest average room rate (based on eight different hotel chains) of the cities surveyed including Dallas, Houston, New Orleans, San Diego and others.  Even with the proposed additional 1-3/4 percent hotel tax, San Antonio's average hotel rate will still be the lowest among these cities. (See attached chart.)

The County will continue to work with both the hotel/motel industry and the rental car industry on the economic impact issues to minimize their costs of collecting state and local taxes.   

6. What happens to Freeman Coliseum under the County proposal?

A complete plan for the best use for the Freeman Coliseum, with an adjacent arena,  will be developed by the Coliseum Advisory Board, with input from the San Antonio Livestock Exposition, Spurs, other event sponsors and adjacent neighborhoods and others, and that master plan will serve as the basis for how the Freeman will be refurbished.  As financing plans for the new arena are finalized and other issues at the site are prioritized, additional funding may become available for work at the Freeman.

7. Who benefits from the County's proposal?

    The County proposal is designed as a "win-win" deal for both the partners in the facility and the community as a whole.     SALE benefits from having a modern facility, with increased seating for rodeo performances.   SALE has sold out every rodeo performance over the last several year.  As a non-profit entity, increased sales means more money for additional scholarships.  The Spurs benefits from a facility designed for basketball games which is a more economically viable sports venue for their business.

The community will benefit from having a mid-sized venue to attract events to the community.  Those who chose to will be able to enjoy a modern facility for rodeo performances, basketball games, concerts, graduations and other family events.  In addition, this new facility will attract events that have never before come to San Antonio because there was no appropriate venue for them.  The County's proposal funds the construction of the facility without a sales tax .  The community also benefits by creating a new node for economic development on the eastside of our community.  The new arena "spreads the wealth" by bringing the potential of spin-off economic development opportunities to an under-developed part of the community.