One of the largest tax increment reinvestment zones (TIRZ) in San Antonio is well-positioned to help pay for the land for a new Spurs arena while keeping the money flowing to some of the city’s parks and museums.
In order to support those projects, however, the Midtown TIRZ has to be extended 19 more years, according to city staffers who gave a briefing to the TIRZ board on Wednesday.
Without the extension, meeting its commitments “becomes very tight,” said Alejandro Tijerina, financial management administrator for the City of San Antonio.
But District 1 resident Kathy Vale said the extension is a “significant fiscal commitment” given the TIRZ “captures public property tax revenue that would otherwise be available to the city.”
She called for more transparency in board decisions especially because the arena sits outside the Midtown TIRZ boundaries.
If approved by City Council next month, the extension to 2041 would be its third continuation since it was created in 2008.
In its lifetime, the TIRZ funds have been used for improvements and infrastructure projects at the Witte Museum, the ButterKrust Redevelopment, Pearl Parkway, the Phipps Law Offices, Casa Blanca Lofts, the Maverick Dog Park, Alamo Manhattan, and many more.
Explosive growth within the Midtown boundaries, which extends from Alamo Heights south along Broadway Street to River North and Pearl, has pushed the taxable value of all parcels within the TIRZ to over $2.6 billion, and the annual tax increment to nearly $10 million.
With a total of $200 million projected to be available through the TIRZ for projects between 2010 and 2041, funding for a multi-million-dollar land purchase and other projects coming down the line is within reach, city staff said of the TIRZ finance plan.
The city has plans to acquire the site of the razed UT San Antonio Institute of Texan Cultures building for the new arena at a cost estimated at $60 million. The 13 acres of land targeted in Project Marvel for the arena sits far outside the TIRZ boundaries.
Deputy City Attorney Ray Rodriguez said the statute that governs TIRZes allows for funding projects outside the zone’s boundaries in certain cases, such as affordable housing, public infrastructure or for places of public assembly.
“There’s also some rationale as to whether a project benefits the zone overall,” he said.
Councilwoman Sukh Kaur (D1), chairman of the TIRZ board, said the proffered $60 million price tag is only an estimate. “We don’t have an official number on the ITC site … we’re still working with UTSA,” she said. “That’s one of the reasons we’re not voting on it. It’s just for financial planning purposes.”
In 2022, the board approved funding requests from four city-owned entities also outside the TIRZ boundaries but within what the city considers the “cultural corridor.”
At its first meeting in almost two years, this week, the board heard from three of them — the San Antonio Zoo, the Botanical Gardens and the Brackenridge Park Conservancy — on how they’ve used that funding and also what they expect to be another $30 million in funding needs.
Zoo President and CEO Tim Morrow said previous TIRZ funding was used to support construction of the new gorilla habitat and new visitor entrance. The zoo’s next project aims to expand exhibits to the west side of U.S. Highway 281 and build new classroom space.
Botanical Gardens leaders used the TIRZ dollars to restore the historic conservatory and develop a master plan for the attraction. Future funding would go toward a $60 million expansion of existing facilities, said Botanical Gardens President and CEO Katherine Trumble.
Brackenridge Park Conservancy CEO Chris Maitre said the nonprofit spent TIRZ funds on expanding programming and building a nature playscape. Future funding could go toward signage, wayfinding guides and restoring the Sunken Gardens Amphitheater.
A representative from the Witte Museum did not give a similar presentation but is expected to appear before the board in the coming months.
To qualify for the TIRZ funding, the board required the four groups to contribute matching funds for their projects. Requests for TIRZ funds must be approved by the TIRZ board before moving to council for a final vote.
Chief Downtown Officer Shanon Miller said she is expecting another request to come before the board in the coming months — for a new mixed-use development near the San Antonio Art Museum, led by the McCombs family — in addition to the arena land acquisition.
Morrow and Trumble are members of the Midtown TIRZ board along with Kaur, the city’s Chief Financial Officer Troy Elliott and Parks and Recreation Director Homer Garcia.
Also on the board are former San Antonio Fire Department officer John Gurgiolo, Mahncke Park resident George Grimes and River Road resident Seema Kairam.
Midtown is one of three city-initiated TIRZes that have been recently extended. In the case of the Westside and Houston Street TIRZes, the boundaries also changed to benefit a public-private agreement for a new downtown ballpark.
Kairam asked if the extension was a valid use of the tool, pointing to the statute that calls for TIRZes to be created in economically distressed, unproductive, underdeveloped or blighted areas.
“Based on that, given the growth that we’ve seen in our city, Midtown TIRZ is a major growth engine for the city,” she said. “What is the rationale for the TIRZ to continue to exist?”
City attorney Rodriguez said the statute outlines those criteria as necessary for establishing a TIRZ — but not for extending the terms.
“This TIRZ has served its purpose — it has developed a beautiful river, a beautiful Pearl, a beautiful River North,” said River Road neighborhood resident Susan Strawn, and it’s continuing the generate investment in those areas.
The Midtown TIRZ has enough money in its coffers, she said, to offset the budget deficits the city is now grappling with.
TIRZ spending on cultural entities like the museums and parks, property owned by the city, is one way to relieve some pressure from requests on the 2027 bond, Miller said.
“They’re not asking for as much out of the bond if they’re able to have an allocation from the TIRZ,” she said.
Though the next Midtown TIRZ board meeting has not been scheduled, it is expected to be sometime this fall.
City Council will hold a special budget session focused on TIRZ spending on Sept. 1.
