Tuesday, June 26, 2012

Proposed Baseball Stadium Corporate Welfare to Gives Local Tycoons Windfall in Many Ways

We thank you for this recent submission to Deep Inside El Paso from Ann Morgan Lily's best friend

Proposed Baseball Stadium/Corporate Welfare to Gives Local Tycoons Windfall in Many Ways
On top of $50 million to build stadium -- relocation, rehab, and rental cost estimated Over $85 million to relocate city services from City Hall

The recent proposed baseball stadium in Downtown El Paso is on route to be a double windfall for local billionaires and millionaires.

The City of El Paso will vote on Tuesday, June 26 on whether to demolish the current City Hall building and Insights Museum to build a baseball stadium. 

The current City Hall was built in 1979.

The City of El Paso's current stadium, Cohen Stadium was built in 1990 and is barely 20 years old, cost taxpayers 6 million ($9,880,151.45 adjusted for inflation) and seat 9,725.

Cohen Stadium, built 1990

Woody Hunt and Paul Foster and a group of private investors have vowed to bring a Triple A minor league baseball team to El Paso. The other private investors include Joshua Hunt, senior vice president of Hunt Companies, and Alejandra de la Vega Foster, president of Almacenes Distribuidores de la Frontera.

Send the Diablos Pack'n - Tiguas left out of land deals, again

It will also seek to have non-compete clause calling for the termination of the the City of El Paso's agreement with the El Paso Diablos and Cohen Stadium. 

The Tigua tribe bought the Diablos team in the summer of 2011 and have gone on record that they have been kept out of conversation about a new baseball team for El Paso.

Here is the non-compete clause the City Manager is recommending to the city:
  • Except for the existing agreement with the current tenant of Cohen Stadium, the City (or affiliated City entity) shall not operate, or allow others to operate, Cohen Stadium, or any other facility that would accommodate affiliated or independent professional baseball, in competition with the Ballpark.
  • The City shall not extend the existing agreement with the current tenant of Cohen Stadium beyond April 16, 2016. The City (or other City entity) shall not develop, finance, or facilitate the development of any other outdoor concert venue in downtown El Paso that will compete with the Ballpark, except for the possibility of an MLS professional soccer stadium.
(Economic Impact of Building a Downtown Stadium, City Slideshow Presentation P. 21 )

Low Rent to Teams Despite Ability to Pay More

The city would only charge the team $200,000 to rent the facility (Economic Impact of Building a Downtown Stadium).

Unpopular Hotel/Motel Tax to Be Highest in Texas

The city is proposing a hotel occupancy tax increase 15.5 percent to 17.5 percent to finance the stadium, a move opposed by the local Hotel/Motel Association . The tax increase will be to build the stadium, but the city has made no mention of maintenance costs although it covers this in their slide show (see below). The increase tax rate will be the highest in the state of Texas if passed.

Financing Ball Park: Who's On First

The City Manager is proposing several ways to finance the ballpark. Remember this only for the ballpark. Here are three (out of four) of the ways listed in their slideshow:

Financing for Ballpark only
    • obligation bonds by voters
    • 100% by property taxes

  • Finance through subject-to-appropriation obligation of the City-County
  • Lease payments by city Supported by lawfully available revenues
  • Creation of a local government corporation to own the Ballpark and lease to the city which then lease to the team

  • 2% increase in Hotel occupancy tax
  • tickets, rent from team

Move'n On Out

The demolition of the City Hall Building would involve the move of 650 city employees, a conflict of interest move that will profit Paul Foster and the Paso del Norte Group as Joyce Wilson is proposing moving city services to properties owned by our good friends at PDNG.

Decentralizing City Services

Although the city, in its slide presentation, estimates the costs of relocation of city resources to other buildings, rental of other buildings, it does not mention the construction of a new city hall. It is most likely planning to decentralize all city services to various areas in Downtown El Paso and to do this permanently. According to the document release for the City Council meeting a new Insights Museum is not in the city future.

Conflicts of Interest

Furthermore, City Manager Joyce Wilson has proposed moving city employees to buildings owned by the same investors who are pushing for City Hall's demolition, namely building owned by Paul Foster. How about free rent Paul. Well even name San Jacinto Plaza after you.

Wilson mention moving employees to the Mills Building, which was recently renovated by Paul Foster, but has suffered from lack of tenants. The El Paso Inc. said that Rep. Emma Acosta “opposes a proposal that would lease a new or restored historic building from a private sector developer, because the lease payments would be a burden on the city’s general fund” (Sunday, June 24).

Steve Ortega is calling for the renovation of an older building downtown, but this proposed renovation is not included in this deal. The costs to the taxpayers are being hidden. Ortega also supports de-centralizing city hall in which the executive offices, city council offices, and city manager offices are in one building and everything else in another, a proposal that promises to be a burden on access to city hall.

In their presentation, the City estimates that $12 – 15 million improvements to City Hal are needed in the “near future” (Economic Impact of Building a Downtown Stadium p 36)

Costs go beyond the building of the stadium: Over $80 million more on taxpayers

  • City will be responsible for making all major capital improvements to the Ballpark during the initial term of the agreement (Economic Impact of Building a Downtown Stadium p. 31)
  • City is responsible for providing signage (p. 34)
  • City is responsible for providing insurance coverage for the Ballpark (p. 34)

Costs of relocating city resources not in the price tag, to be covered by taxpayers later

Cost of building or rehabbing similar size building without land acquisition
    • New Construction - $33.0 million
    • Luther Building Renovations - $24.4 million
    • Remodel (Interior) – $19.5 million

Total Costs to rehab: $76.9 million (Economic Impact of Building a Downtown Stadium p. 40)

Costs to Relocate
Moving expenses: $2-3 million (pg. 41)
Temporary rental costs: $3.5 million annually
Total: $5-6.5 million

Costs to Rent (proposed rent of Luther Building) for 5 years
    • $1,443,136

Total Costs Not Covered by the $50,000,000 price tag: Estimated Total:


To see the City of El Paso's attachments to the June 26, 2012 agenda (where we Ann Morgan Lily's best friend got this information, click there: Attachments)
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