<\/p>\n
Peter Holt, chairman of the Spurs; County Judge Nelson\u00a0Wolff; former county judge Cyndi Taylor Krier and Ruth Jones McClendon join others in cutting the ribbon to officially open the new SBC Center in 2002. Questions abound as to whether promised revenue sharing ever happened.<\/p>\n
Billy Calzada\/San Antonio Express-News<\/p>\n
Mayor Gina Ortiz Jones has called for revenue sharing to be part of an arena agreement with the San Antonio Spurs. Revenue sharing with the Spurs is possible, but only if contracts are vetted and enforced.\u00a0<\/p>\n
Sam Owens\/San Antonio Express-News<\/p>\n
Mayor Gina\u00a0Ortiz Jones’ request that the Spurs share revenues from a new arena is being treated as novel. It isn\u2019t.<\/p>\n
<\/p>\n
Revenue sharing, including a cut of tickets, concessions, parking,\u00a0merchandise and naming rights, was a major selling point of the 1999 election campaign to build what is now called the Frost Bank Center.<\/p>\n
Article continues below this ad<\/p>\n
As\u00a0Bexar County and the city of San Antonio negotiate a new downtown Spurs arena, officials should first answer a simple question: What happened to the revenue-sharing deal for the current one?<\/p>\n
In 2015, the Express-News Editorial Board asked that question<\/a>. After reviewing the paper\u2019s investigation examining years of financial results, the board said \u201cit seems\u201d the 2000 arena agreement \u201cwas structured to only pay lip service to revenue-sharing,\u201d that voters were \u201cessentially misled\u201d and that it was \u201ctroubling\u201d that local officials appeared unconcerned.<\/p>\n Noting that county officials told the paper that the agreement \u201cwas never expected to produce any money,\u201d the board responded bluntly: \u201cUm, maybe\u00a0Bexar County officials didn\u2019t expect to make any money from the agreement, but the public sure did.\u201d<\/p>\n The board urged the county and Spurs to modify the deal to honor the promises made to taxpayers before the 1999 vote.<\/p>\n Article continues below this ad<\/p>\n That never happened. But questions remain.<\/p>\n In 1999, the city offered the Spurs a downtown arena with significant public profit-sharing provisions. Bexar County countered with a more generous proposal but faced a challenging tax election.<\/p>\n \u00a0After marathon negotiations just days before the vote began, county officials announced what they described as major concessions: Taxpayers would receive 20% of naming-rights revenue above $1.875 million annually and 20% of profits from non-Spurs events above $4.75 million.<\/p>\n County Judge\u00a0Cyndi Krier\u00a0called the agreement<\/a>\u00a0\u201cgreat for the Bexar County taxpayers.\u201d Commissioner Paul Elizondo declared, \u201cWe laid it on them,\u201d describing how the county had forced the Spurs to negotiate naming rights. Spurs Vice President Leo Gomez told the Express-News<\/a> taxpayers could benefit from the naming-rights provision \u201cin the first year.\u201d<\/p>\n Article continues below this ad<\/p>\n The message to voters was unmistakable: Taxpayers would share in the arena\u2019s financial success.<\/p>\n The vote passed. But the deal wasn\u2019t yet on paper.<\/p>\n When the agreements were finalized in the summer of 2000, Express-News columnist Carlos Guerra\u00a0criticized<\/a>\u00a0the deal. Guerra explained that internal consultant projections showed the \u201cnon-Spurs profits\u201d subject to revenue-sharing were expected to remain below the threshold required for any public payment. Moreover, the naming-rights deal was structured to exclude sponsorship revenues included in other NBA deals, and taxpayers would see little from that either.<\/p>\n A 2008 Bexar County audit<\/a>\u00a0confirmed Guerra\u2019s projections. The county had received no money from either revenue-sharing provision.<\/p>\n Article continues below this ad<\/p>\n As summarized by the Express-News<\/a> in 2015, the audit found that no revenue was received because, under the agreement, \u201cmost revenues belong to the Spurs and most expenses belong\u201d to Community Arena Management, or CAM, the Spurs-controlled operating company whose profits determined whether the county received any payment. The Spurs kept the lucrative basketball-related revenues while CAM accumulated more than $82 million in losses.<\/p>\n But the naming rights story wasn\u2019t fully explained.<\/p>\n In 2000,\u00a0SBC agreed to pay $41 million over 20 years for the arena\u2019s naming rights. County officials\u00a0celebrated the agreement<\/a>, chastising critics who said the county \u201cwould never get a dime.\u201d Krier projected that taxpayers would receive \u201ca lot of dimes\u201d\u00a0\u00a0\u2014 approximately $1.1 million.<\/p>\n \u00a0The payments were backloaded, but\u00a0Elizondo stated that the county would begin receiving payments around the seventh year of the contract, once annual payments exceeded the $1.875 million threshold.<\/p>\n Article continues below this ad<\/p>\n The 2008 audit also noted that the Official Statement for the 2000 Series Bonds contained a statement that the Spurs projected the county would receive $1.133 million from the naming-rights agreement. It recommended further audits.<\/p>\n