City Manager Erik Walsh said Monday a new taxing designation the city fought for in the most recent state legislative session will offer an additional tool to finance renovations of the convention center and the Alamodome.
San Antonio received permission to create a Project Finance Zone, which Fort Worth used to fund its new rodeo and event space, Dickies Arena. Senate Bill 2220 expanded the Project Finance Zone program to include San Antonio and Houston.
The change will allow the city to designate a three-mile zone around the Henry B. González Convention Center in which the the state rebates a portion of the hotel taxes it collects within the zone back to the municipality.
In an interview with San Antonio Report Editor-in-Chief Leigh Munsil at KLRN’s studios, Walsh said that could help fund a downtown makeover, including an expanded convention center and a potential downtown sports district around the Alamodome and Hemisfair.
“From the city’s standpoint, there is an opportunity for us to do something different downtown,” Walsh said.
Dallas is preparing to tear down and replace its convention center, and Austin is planning a significant convention center expansion. San Antonio’s convention center underwent a major expansion in 2017, but the surrounding area also need to keep up, Walsh said.
So far city leaders have met with their counterparts at Bexar County, the San Antonio Spurs leadership and owners of the San Antonio Missions minor league baseball team about the potential for a downtown sports district that could allow both teams to play there and fuel an economic resurgence downtown.
“We will be looking at expanding the convention center, likely vertical, and making sure that we’ve got the ability to to keep San Antonio vibrant,” Walsh said. “Part two of that is, what are we going to do with the Alamodome? … We’re going to have to spend a significant amount of money to remain competitive with other major multipurpose stadiums in the country.”
Neighboring Hemisfair has also been undergoing renovations for decades, paid for by city bonds, Walsh said.
“How do we do something different in that entire area? ” Walsh said. “Those are things we’re looking at.”
Even using a Project Finance Zone, details of how the city might fund such a sports district are still fuzzy. The next municipal bond cycle won’t occur until quite close to the end of the Spurs’ lease on the Frost Bank Center, which is owned by Bexar County and located on the East Side.
“There’s going to be a whole lot of thought and financial analysis behind that and a lot of public conversation,” Walsh said. Pointing to the taxing designation, he added, “that’ll help us with the financing for major efforts like the convention center and maybe the Alamodome.”
City leaders learned only recently about the Project Finance Zones, and state Sen. José Menéndez (D- San Antonio) filed a bill allowing San Antonio to create one hours before the session’s filing deadline.
Walsh said the Missions’ owners are working on a plan for a new ballpark that they would share with the city near the end of the year. He plans to engage City Council on moving forward with the taxing zone this fall or in early 2024.
Man of the hour
Walsh, a San Antonio native, has served as city manager since 2019.
His role will be the subject of much discussion in the coming year, as Mayor Ron Nirenberg has indicated he wants a charter review commission to revisit caps set in 2018 on the city manager’s tenure and compensation.
A change to the city charter in 2018 limits the city manager to a maximum of eight years, meaning the last year Walsh could hold the role is in 2027, and his compensation is capped to 10 times the amount of the lowest paid, full-time city employee. He declined to say Monday whether he would seek to continue serving as city manager if the tenure cap was removed.
“I get a lot of questions about that and I don’t answer any of them, because there are other charter issues [that a review commission could take up],” Walsh said. “I keep my personal and professional opinion to myself.”
A city under construction
Walsh worked his way up in city leadership and is currently overseeing a $1.2 billion bond, the city’s largest ever.
In the meantime, he’s also taking heat for delays in projects from the 2017 bond, which has soured relationships with local businesses impacted by construction. Walsh said almost all 2017 projects have begun construction except ones that the Texas Department of Transportation has fought the city on, such as the Broadway corridor, and one that may never happen: street renovations near the old Lone Star brewery.
None of the 2022 bond projects have made it past the design phase, he said, but the city is making changes to avoid past mistakes when work begins. Among those, he said, they’re working closely with CPS Energy and San Antonio Water System to ensure aging utility infrastructure is replaced at the same time city road improvements occur.
Walsh said the council has given the city better tools to hold contractors accountable, and city staff is trying to improve its communication with residents and business owners in a corridor throughout construction.
“When you drive around and you see all the construction, none of that is for the $1.2 billion bond program, so progress [on the 2022 projects] is going to be painful,” Walsh said. “… Undoubtedly the 2027 bond program will be as big as the 2022 [program]. We’re going to need to do a better job of managing and executing that.”
