SAP Center Modernization
Third Amended Arena Management Agreement
and Related Agreements
August 26, 2025
Item 8.2 Lee Wilcox
Assistant City Manager
Kevin Ice
Assistant to the City Manager, Director of Real Estate
Office of Economic Development and Cultural Affairs
Cameron Day
Senior Deputy City Attorney
R ecommended A ctions
• Approve the Third Amended and Restated Arena Management Agreement between the City and the Sharks for use of the SAP Center through June 30, 2051.
• Approve the Arena District Memorandum of Understanding. • Authorize City Manager to negotiate and execute:
• Updated lease between the City and the Sharks for the use of the Ice Centre, including Sharks Ice and Tech CU Arena through 2051.
• A property use agreement between the City and Sharks for employee parking and storage on property located along Sharks Way between N Autumn Street and N Montgomery Street.
• A five-year option agreement to acquire APN 259-29-004 for a price of $1,226,030, subject to annual consumer price index inflation. • All other ancillary documents, exhibits, and technical revisions as may be necessary.
3 • SAP Center has been home to San
Jose Sharks since it opened in 1993.
• City-owned facility.
• Hosts world-class entertainment,
including tournaments, concerts, and
other touring acts.
• 2023 study found 3 million annual
attendees generated approximately
$235 million in visitor spending.
• $113 million realized by San José residents
and workers, supporting 2,740 local jobs.
• Estimated annual tax revenue to City of
approximately $4 million.
SA P Center
4 R ecent Arena Investments
PNC ARENA
• CentennialAuthority funding 100% of the $300M
renovation
SPECTRUM CENTER
• City funding 100% of the $275M renovation
DELTA CENTER
• City funding 100% of the $525M renovation
PUBLICLY FUNDED RENOVATION
CAPITALONE ARENA
• City committing $500M toward $800M renovation
• MSE to commit undetermined amount
NEW ARENA COSTS
UBS ARENA
$1.5 Billion
INTUIT DOME
$2 Billion
CLIMATE PLEDGE ARENA
$1.2-$1.3 Billion
CHASE CENTER
$1.6-$2 Billion
5 Ke y Te r m s
• Sharks to perform $425M renovation, committing to structural elements.
• Net City contribution of $325M.
• City expects to bond for $350M; paid in five installments of $70 million between 2027 and 2031; City retains full flexibility for its financing strategy. • Financing options include short-term commercial paper, increased Transient Occupancy Taxes, and/or a general obligation bond.
• Sharks contribute $100M, of which $25M goes to City for debt service.
• Sharks responsible for any cost overruns.
• Sharks have funded $84M into the building above contract requirements under Hasso Plattner’s ownership.
• Sharks to guarantee playing in San José through 2051. • Early termination fee covers City’s outstanding debt plus interest. • Hold stipulated judgment and injunction in escrow to block sale/move if fee isn’t paid.
6 Other Financial T erms
• Sharks contribute $475,000 annually, $12,350,000 in total for community benefits.
• Both contribute roughly $32 million towards capital maintenance. • City’s contributions are weighted to the back end of the term. • Sharks to fund traffic and parking management costs up to $517,000, adjusted annually for CPI.
• Sharks contribute $120,000 to the Arena Authority, adjusted annually for CPI.
• City contributes $150,000 in first year, $100,000 annually thereafter to a public safety fund.
• Permit fees not to exceed 1.3% of total renovation cost. 7 SA P Center R enovation
• Project will use union labor.
• Oldest active arena in the NHL
without having undergone a major
renovation.
• Deferred maintenance in structural
building systems including
mechanical, plumbing, electrical,
and technological.
• Layout not consistent with NHL
Standards, which has blocked
certain upgrades.
8 SA P Center R enovation
• Renovations planned over 7 years in the
offseason, which will include:
• Retrofits to meet updated codes and
standards
• Architectural enhancements, including
major expansion of concourse areas
• Enhanced and new premium products
and seating, such as bunker suites
• Food service and merchandise
revisions and new offerings
• Back-of-house enhancements and
modernization
9 Arena Dis trict MOU
• Parties anticipate needing a new
Arena by 2051.
• Arena District Agreement to be
negotiated by September 2027.
• Agreement will identify and reserve a
future arena location and include
district objectives.
• The new arena location will anchor a
district that includes other uses such
as retail, restaurants, hotels, arts and
cultural venues, and other gathering
spaces.
10 R elated A greements
• First Amendment to Ice Centre Lease
• Option to acquire APN 259-29-004
• Transportation and Parking Management Plan Operations Manual • Standard Operating Procedures for Impoundment
• Standard Operating Procedures for Scheduling Security Personnel • Video Surveillance Access Agreement
• Property Use Agreement for Lot E
• Guaranties
• Stipulated Judgment to protect Termination Fee agreement. • Sharks Sports & Entertainment LLC Guaranty.
• San Jose Sharks, LLC Guaranty.
11 Thank you!
Staff are available for questions.