The San Jose Sharks’ SAP Center lease with the city expires next year and the terms will change, opening the door to negotiations with both parties.
Next year, the city, which owns the stadium, will be able to raise the Sharks’ rent annually, and leaders at Sharks Sports and Entertainment are hinting at a desire for the city to help pay for the improvements in lease negotiations. The 30-year-old downtown “Shark Tank” is one of the oldest arenas in the NHL.
Mayor Matt Mahan was tight-lipped about what those talks will entail at a Thursday forum on the future of downtown, but he promised to keep the team happy. At the same event, team officials made a promise of $1.25 million in economic benefits to San José over the next five years.
“When it comes to economic development, we work with the city. We trust the city,” Sharks Senior Vice President of Government Affairs Chris Shay said at the Carabiner Annual Meeting, a downtown improvement talk hosted by the Urban Vibrancy Institute. “We’re going to release an economic impact study that uses the city’s version (the city rules associated with this) because no one wants to release a number that can’t be backed up.”
He called the $1.25 million estimate “conservative.”
“This $1.25 billion impact over five years on the city of San Jose wipes out every dollar from anyone in San Jose who spends money on Shark Tank or Tech CU Arena (an expansion of Sharks Ice) due to the fact that they can spend it. elsewhere. And we encourage them to spend it elsewhere,” Shay said.
Sports clubs seeking taxpayer investment in arenas and stadiums often promise financial returns. Sports subsidy watchdogs have scrutinized that promise, questioning how much these venues actually recoup the public’s investment.
A 2023 economic report commissioned by the San Francisco 49ers emphasizes the financial performance of such facilities.
Levi’s Stadium in Santa Clara has generated a $2 billion economic impact for the region in the last decade. The report attributed it not only to football games, but to nearly 1,000 special or corporate events, as well as concerts featuring prominent names in music.
Shay also promoted a long list of artists who have taken the SAP Center stage, specifically powerful Latin music groups like Bad Bunny, who have generated significant revenue for the city.
Sharks officials say the arena has drawn 1.5 million annual visitors (and 50 million total) since the SAP Center opened in September 1993. They argue that translates into a tourist boon: 25,000 guests passing through night a year.
Shay referenced other NHL arenas a few years older than SAP Center that have been updated or are in the works, such as the Washington Capitals’ Capital One Arena in Washington, D.C., built in 1997, and the Washington Capitals’ PNC Arena. Carolina Hurricanes in Raleigh. , North Carolina, built in 1999.
At the meeting, Mahan said the Sharks generate $20 million in annual tax revenue for the city.
“We are now going through the process of discussing with them and negotiating what the next 20 or 30 years will look like in San José. I am very committed to keeping the Sharks here. Not just stay here, but grow and prosper here,” Mahan said. “I can’t share much about that process because we’re just (now) having that conversation, but I’m excited about what the future will look like.”
The city last extended the Sharks’ lease in 2015 after the team pushed to previously reinvest in SAP Center. The agreement split those improvement costs between the team and the city for a $3 million roof and upgraded heating, ventilation and cooling. Under the current agreement, the Sharks play home games for a fixed term until 2025, when the lease will be renewed annually until 2040.
Last April, the team and German software company SAP signed a five-year extension to their ongoing partnership, preserving the naming rights to the SAP Center where the hockey team plays its home games. The parent company of the San Jose Sharks will keep the SAP name on the front of the city-owned stadium until 2028.
Shay said the Sharks are committed to San Jose.
“All these crazy people in teal work for you,” he said.
Contact Brandon Pho at [email protected] or @brandonphooo on X, formerly known as Twitter.
