San Jose leaders are set to approve a deal to keep the Sharks in town through 2051 — including a $351 million subsidy for arena upgrades. Critics question how the city plans to finance the proposal during a structural budget deficit.
If approved by the City Council on Tuesday, the deal would keep the city’s marquee hockey team downtown for the next 25 years. The city would pay a majority of the total $425 million required to renovate the 32-year-old SAP Center, while Sharks Sports & Entertainment would pay $100 million. The deal would also commit the city and Sharks to begin planning a new arena by September 2027.
City leaders say they could pay for the deal through bonds and higher hotel taxes, but that doesn’t sit well with some people at a time where federal spending cuts will devastate critical social safety net services, such as food assistance and the public hospital system, serving San Jose residents.
Jean Cohen, executive officer of the South Bay Labor Council, supports keeping the Sharks in town. But she said San Jose’s taxpayer general fund is exposed — and a financing plan for arena upgrades and new facilities should come before the agreement is approved, not after.
“By waiting to develop such a plan, at a time when the City projects deficits, we fear the City may be unnecessarily leaving the General Fund and essential services vulnerable,” Cohen wrote in an Aug. 22 letter to councilmembers.
San Jose faces a $35.6 million shortfall this fiscal year, which is expected to increase to $52.9 million in 2026-27.
Mayor Matt Mahan — who has championed the proposal while casting doubt on a sales tax measure to support the county’s public hospital system — declined to comment.
Representatives for the Sharks declined to comment.
Cohen said she wants guarantees that residents will be able to weigh in on how the deal can put resources into the community.
“I’m not sure that the outreach component was as robust as it could have been for this part of the development of this deal,” Cohen told San José Spotlight. “We’re investing a lot of general fund taxpayer dollar resources into this agreement. We want some guarantees about what the process looks like and who benefits from the investment.”
City leaders and team officials argue SAP Center is the NHL’s oldest active arena without major renovations — and no longer meets NHL requirements. Officials have cited a list of infrastructure issues they say hinders the recruitment of new players, including inconvenient layouts, aging systems and outdated back-of-house areas.
Officials estimate in the next five years Sharks Sports & Entertainment will generate more than $1.25 billion in economic impact and support 25,000 hotel room nights annually.
In a news release announcing the deal, Sharks Sports & Entertainment President Jonathan Becher said team owner Hasso Plattner has invested more than $100 million into the city-owned venue over the last decade.
“We are excited about this opportunity and are looking forward to a continued partnership with the City of San Jose for many years to come,” Becher said.
The San Jose City Council meets Tuesday at 1:30 p.m.
This story will be updated.
Contact Brandon Pho at [email protected] or @brandonphooo on X.