San Jose leaders have approved 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.
The City Council on Tuesday voted unanimously in support of a deal that would keep the city’s marquee hockey team downtown for the next 25 years. Officials agreed to pay a majority of the total $425 million required to renovate the 32-year-old SAP Center, while Sharks Sports & Entertainment will pay $100 million. The deal also commits the city and Sharks to begin planning a new arena by September 2027.
Some have questioned why taxpayers have to foot the bulk of renovation costs at a time of economic hardship and threats to social safety net programs. Sharks owner and SAP Chairman Hasso Plattner possessed a net worth of $15 billion as of this month, according to Forbes. But there were more proponents than critics at the podium on Tuesday who saw the Sharks as an invaluable part of the city — and a no-brainer investment.
Mayor Matt Mahan said SAP Center has evolved from a mere arena to community gathering place — and that the deal provides an opportunity to reshape a major part of the city into a walkable and dynamic space under a formal arena district.
“The truth is cities are never static. We live in a dynamic world. We’re either growing, investing, evolving and reinventing ourselves — or we’re stagnating and declining,” Mahan said before the vote. “I think there’s a real statement, assuming we move forward tonight, that San Jose is a major world-class city that deserves to have the very best … events, performances and experiences, and should be recognized as the largest city in Northern California.”
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 local food assistance programs and the county’s 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 faced a $35.6 million shortfall this fiscal year, which was expected to increase to $52.9 million in 2026-27 as of June budget discussions. Assistant City Manager Lee Wilcox on Tuesday said next year’s budget deficit has dropped to roughly $25 million.
Wilcox said trends over the last decade have him confident property tax revenue will cushion the general fund against the pressure of debt. This year, property values in Santa Clara County saw their slowest growth in more than a decade due to economic uncertainty and stalled development.
“We’ve been taking a conservative assumption of 20% over the next four years — that’s an additional $100 million that the general fund would see based on property tax,” Wilcox said at the meeting. “And while growth alone doesn’t solve this problem — because other services will incur additional costs — it does ease the burden of absorbing the fixed debt service over time.”
Wilcox added there are multiple windows to get hotel tax increases and bond measures before voters.
“We have 2026, 2028 and really — before the large impacts come — we have the 2030 election cycle,” he said.
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 on the South Bay Labor Council’s concerns. Representatives for the Sharks also declined to directly comment before the meeting.
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.
“Last year we had an unfortunate incident with some raw sewage after a 32-year-old pipe burst and dumped it on the media and right outside the Sharks locker room,” Sharks Sports & Entertainment President Jonathan Becher said at the meeting. “We’ve had a harder time keeping up with the increasing number of NHL regulations and we’re just out of compliance.”
Becher said most of the core components in the arena — elevators, plumbing and electrical systems — are well beyond their lifetimes.
“It’s a surprise we’ve only had one incident in the last 32 years,” he said.
Downtown business advocates warned sports teams can always move elsewhere. They specifically pointed to Oakland’s loss of the Oakland Athletics baseball team under owner Jon Fischer.
“You can see what happens when you lose your sports teams and don’t invest in your venues,” Alan “Gumby” Marques, interim CEO of the San Jose Downtown Association, said in public comment.
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.
Becher said the arena’s renovation – and ultimate replacement – has the potential to fundamentally change the city.
“Yes the Sharks will be here to at least 2051 – probably a lot longer than that. But more than that, an enviable SAP center becomes the linchpin of an even more vitalized downtown,” Becher said. “And if the other things we’ll begin to discuss come true, maybe a reimagined city of San Jose entirely.”
Story updated Aug. 26 at 7:31 p.m. Original story published Aug. 25 at 2:30 p.m.
Contact Brandon Pho at [email protected] or @brandonphooo on X.
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