The impact is that, if we're being bullshitted (because the guarantees in the term sheet aren't actually targeted at the immediate geographic vicinity of the proposed arena) then a bunch of wealthy people will get to make a lot of money without paying their fair share of taxes. It's the same problem with UT announcing a scholarship fund for poor kids, but the fine print of the scholarship fund has a bunch of loopholes that allow rich kids to qualify. Everyone supports scholarships for poor kids! Nobody should be against that! The problem is whether what we're being sold is different from what the actual deal is.
To bring this back to your question, the city would unnecessarily lose out on substantial sources of tax revenue for decades, so the only way to balance the budget would be to cut spending (much easier said than done in the age of police and firefighters unions) or to raise taxes on everyone else.
The term sheet I want to see should have firm financial commitments instead of "trust me bro, we promise to build all this stuff" and it should include binding geographic, time, and use restrictions on what construction activities qualify and what activities don't qualify, as well as key performance indicators of this project so that the people who stand to gain from this share in the risk and are held accountable if the promise of revitalization isn't kept.
Right now, it feels very Simpsons Monorail Episode and is more or less holding hostage the community's love of the Spurs with the implied threat of moving the team somewhere else. It's a fucked up thing for the ownership group to do, and it's a fucked up thing for Gina Ortiz-Jones to risk having done to the city. In the end, I don't think the owners would leave the city without trying to put a better offer on the table. If a better offer is made, then in hindsight Gina will have been smart to call their bluff and save the taxpayers millions if not billions over the years.