San Jose City Council unanimously approved an extension of Sharks Sports & Entertainment's SAP Center lease through June 30, 2051, with financial penalties if the team departs early. The city will contribute $325 million toward modernizing the 32-year-old arena while the Sharks will contribute $100 million. The agreement requires planning for a new arena by September 2027, envisioned to anchor a district of retail, restaurants and hotels. The city expects to issue a $350 million bond payable in five $70 million installments from 2027–2031; financing options include short-term commercial paper and increased hotel taxes. Labor groups have requested funding details amid city budget shortfalls.
An agreement that extends Sharks Sports & Entertainment's lease at SAP Center to 2051 and commits hundreds of millions of public dollars towards modernizing the 32-year-old arena was unanimously approved by council on Tuesday. The deal binds the city to a $325 million investment into the municipally owned facility, with the Sharks, who are owned by billionaire Hasso Plattner, contributing $100 million.
The agreement also commits the city and the NHL franchise to begin planning a new arena by September 2027, which city planners foresee anchoring a district that includes retail shops, restaurants, and hotels. After a lengthy negotiation, the Sharks and the city announced on Aug. 15 that they had reached a deal that keeps the NHL franchise at the arena for another 26 years.
As of last week, the South Bay Labor Council had requested more details about how the city will fund the agreement. By waiting to develop such a plan, at a time when the City projects deficits, Jean Cohen, executive officer of the South Bay Labor Council wrote in a letter last week to the city council, we fear the City may be unnecessarily leaving the General Fund and essential services vulnerable.
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