Plans for a new downtown baseball stadium are in the works after city leaders have repeatedly pitched the project for years.
But this is the closest they’ve come to getting that plan across home plate.
The city of San Antonio and Bexar County are part of the deal, pledging to use property tax dollars to fund the project.
Here’s how.
TIRZ
A Tax Increment Reinvestment Zone, or TIRZ, is a geographical area identified as needing improvement.
Creating a TIRZ allows taxing entities to use property tax dollars generated within that zone to pay for that improvement.
The baseball stadium will be located within an already existing TIRZ.
“The goal, in particular, is economic development in areas that are unlikely to generate it themselves,” said Taylor Collins, Chair of the Department of Economics and Management at the University of the Incarnate Word.
The first step in creating a TIRZ is setting a base value, which is the equivalent of the combined property tax value of all properties within the zone in the year the TIRZ is created.
“The county appraisal district will come out and they’ll appraise the taxable value of the property in that area,” said John Villareal, a manager with the economic development section at the Texas Comptroller’s Office. “And then that becomes the base value. The tax base.”
As future development happens and hopefully that value increases, the amount of property tax dollars generated over that base value can be reinvested into the tax increment reinvestment zone.
For example, let’s use a base value of $1 million.
That means all the properties within a zone are valued at a combined $1 million when the TIRZ is created.
Let’s say the next year the property tax value increases to $2 million.
One million dollars of that, the equivalent of the base value, goes back to the local taxing entities like all other property taxes.
The other $1 million can be reinvested into that zone and a municipality can decide what percentage of that amount they want to reinvest.
However, creating a TIRZ doesn’t guarantee property value will increase.
“It doesn’t happen overnight,” Villareal said. “So it can take several years of these increases to actually amount to a significant amount.”
Partnering with a private developer
Because increasing property values can be a slow process, public entities might turn to a private partnership to speed things up.
It’s what the City of San Antonio and Bexar County are doing to build a new downtown stadium for the San Antonio Missions baseball team.
“This is so unique,” said Assistant City Manager Lori Houston. “Weston Urban and the Missions will be holding the majority of the risk.”
Weston Urban, a private development group, is pledging to pour money into new projects near the site chosen for the stadium that sits at the corner of Kingsbury and North Flores street, east of the Interstate 35 and Interstate10 interchange downtown.
The stadium will be part of the San Pedro Creek project and sits within what the city calls the Houston Street TIRZ, located between I-35 and I-37.
The Houston street zone is one of nine TIRZ in the city.
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The Missions are AA, owned in part by the co-founders of Weston Urban.
Major League Baseball said the Missions’ current home, Nelson Wolff Stadium at Highway 90 and South Callaghan Road where the team has played since 1994, needs major upgrades.
Without them, MLB said the Missions can’t stay in San Antonio.
“Western Urban Development has committed to bring on approximately $550 million of development between now and 2029, and they all pay taxes on that $550 million,” Houston said.
That more than half a billion dollars in investment is expected to drive up property values, which gives the city and county money to fund the stadium.
“We’re taking the taxes that come from that development and that go into that tax increment fund, and we’re using those taxes to support debt that’s going to be used to construct the baseball stadium,” Houston added.
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In a typical TIRZ, a private developer can be reimbursed by a city or county for publicly accessible things they create as part of their development.
Let’s say a developer builds a hotel and adds sewer lines and sidewalks.
A city could reimburse a private company for that.
“We’re not doing that in the case of the baseball stadium,” Houston said. “The developer is not getting any funding for any of their development and they can’t access it for public improvements.”
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If it’s a strike...
What happens if the plan is a swing-and-a-miss? If Weston Urban falls short of the commitment of $550 million in development by 2029?
“They are still required to pay the amount equal to the taxes they would have had paid on that development because we need that to support the debt,” Houston said. “And so in this case, it’s not the developer that’s getting tax increment to support their project. It’s developer committing to develop projects so we can facilitate tax increment necessary to support debt for a public facility, which is going to be a baseball stadium.”
Money generated by future development will fund 80% of the cost for the new Missions stadium, which is an estimated $160 million.
The other 20 percent will come from:
- $34 million team contribution
- $1 Million a year a lease for the stadium
- $2 ticket fee for fans
The Houston Street TIRZ has been around since 1999 and has helped pay for things like additional street lighting downtown and improvements to Travis Park.
According to Houston, building a new baseball stadium will not take away from other improvement needs in the area because only money generated by the new Weston Urban development will go toward the stadium.
The Houston Street TIRZ is, however, being expanded to accommodate the stadium project.
The city is taking properties from the West Side TIRZ and adding it to the Houston Street zone, but Houston said the former won’t lose out on funding.
“Currently, the city only contributes about 90% of its tax increment to the West Side TIRZ,” she said. “We’re going to increase that to 100%. And then we’re also going to extend the West Side TIRZ.”
State statute allows local taxing entities to create these reinvestment zones, but there is no state oversight of these agreements though municipalities must submit annual reports to the state.
“We do have a registry of all agreements, but we don’t approve of them,” Villareal said.
Plus, there is no penalty for a city or county if the plan fails to raise property taxes.
The base value year will be 2025 for the reinvestment calculations to cover the new baseball stadium.
The life of that zone will be extended through 2054, meaning roughly 30 years of property tax growth the city and county hope for could help foot the stadium bill.
Stadium construction is expected to be complete by 2029.
As for the private development that’s key to this local field of dreams, planning and construction is still to come but Weston Urban and the city have signed an agreement for the plan.
