California Construction News staff writer
The San Jose Sharks will remain in the South Bay through the 2050-51 NHL season under a new lease agreement that includes more than half a billion dollars in upgrades to SAP Center.
The San Jose City Council voted unanimously Tuesday to extend the team’s lease and approve a major renovation program for the 32-year-old arena, which is owned by the city. The city will cover the majority of the cost, estimated at $425 million, while Sharks Sports & Entertainment (SSE) will also contribute to the multi-year overhaul.
The agreement commits both sides to a long-term construction program that began in the summer of 2025 and will continue for five to seven years. Work will focus on replacing aging systems and modernizing guest and team facilities.
Planned upgrades include deferred maintenance and infrastructure improvements to elevators, plumbing, restrooms, fire protection, Wi-Fi, electrical systems, sound equipment and emergency generators. The project will also renovate the concourse, penthouse and club levels, as well as update locker rooms for entertainers, visiting sports teams and the Sharks.
“Beneath the surface, some of the core elements have started to age out,” said Jonathan Becher, president of SSE. “The elevators are original, most of the plumbing is original, the electric systems are original. Many of those components have gone beyond their useful and expected lifespan.”
The city’s investment comes at a time when San Jose is facing a budget shortfall, but Mayor Matt Mahan said the deal was structured to backload spending in anticipation of future growth.
“We’re in a moment where sales tax revenue and property tax revenue have both slowed a bit,” Mahan said. “We’ve structured the deal to not spread the cost to the city evenly across all of the years. They ramp up on the out years.”
Becher emphasized that while the Sharks are the anchor tenant, the upgrades serve the wider community.
“This isn’t our arena; it’s the city-owned arena, and the vast majority of the investments have nothing to do with hockey,” he said.
The city may also explore new revenue sources such as an increase to the transient occupancy tax and issuing a general obligation bond to help finance the project.
Over the last decade, Sharks owner Hasso Plattner has invested more than $100 million in voluntary improvements at the arena, including a new center-hung scoreboard, LED ribbon board, ice-making plant, premium seating areas and enhanced security and ventilation systems.
The Sharks also pledged an additional $12 million in community benefits as part of the new deal, supporting local beautification projects, youth programs and equitable access to hockey.
“From their first face-off in 1991 to the roar of the Tank today, the Sharks have become a cornerstone of San José’s identity,” Mahan said. “Together, we’re investing over half a billion dollars to bring world-class amenities to SAP Center — cementing downtown as a premier hockey destination and world-class stage for headline acts.”
SSE will continue to manage and operate SAP Center on behalf of the city. The facility has hosted more than 50 million guests and 5,000 events since it opened in 1993, generating an estimated $10 billion in economic activity.
Officials expect a detailed construction schedule to be finalized by March 2026, with phased upgrades taking place while the arena remains in use.
