SAN ANTONIO – The San Antonio City Council approved on Thursday an updated plan for Project Marvel, the $4 billion plan to build a downtown sports and entertainment district.

The approval now paves the way for a new Spurs arena to be funded in part with state tax dollars.

City council voted 9-0, with 2 being absent to approve the new plan for the sports and entertainment complex.

In 2023 a new state law allowed San Antonio to upgrade the Henry B. Gonzalez Convention Center and the Alamodome using state tax dollars.

But the shot clock was running: the city had to start both projects within five years.

Now the city wants to reset the shot clock by combining those two projects and a new NBA arena into one big complex. They’d only have to start work on one of those buildings within five years to start drawing the money.

The state calls it a Project Finance Zone and it will allow San Antonio to keep the state’s portion of hotel and sales taxes within a three mile radius of the convention center for thirty years.

“We have been working obviously on a funding framework for a new downtown arena but also how we finance an expanded convention center and the Alamodome,” said City Manager Erik Walsh.

Walsh says other potential funding could come from Bexar County’s venue tax on hotels and rental cars, a contribution from the Spurs, and future revenue generated by the arena.

But what about your property taxes?

“Will any property tax dollars go to build the arena?” asked News 4 I-Team Reporter Jaie Avila.

“No, cities in Texas are restricted on how they can utilize property tax dollars on sports facilities,” Walsh responded.

He clarified there is already a small zone around Hemisfair where a portion of property taxes are captured for downtown improvements. It’s called a tax increment reinvestment zone or TIRZ, and it could be used for the project.

“It’s public dollars but it’s dedicated within that zone, so in other words, development paying for development,” Walsh said.

Local taxpayers will foot the bill for infrastructure around the buildings, likely through a city bond, which would pay for intersection improvements, sidewalks and VIA park and ride access.

Tom Schatz with Citizens Against Government Waste says other cities have been burned using public money for sports facilities.

“Many times these projects fall short of the amount of money they think it will cost and they then raise whatever fees or income sources they might have,” Schatz said.

He says relying so heavily on visitor taxes could eventually hurt conventions and tourism.

“They might look and say I don’t want to pay that much more to establish my event there when it’s less expensive to go somewhere else,” Schatz said.

It’s estimated the Project Finance council votes on Thursday could generate more than $2 billion, but most of that wouldn’t be available for years.

So, the city says other funding sources are needed as well.