Proposed new stadium, baseball team would relocate El Paso City Hall

?? Related: El Paso 'ready for professionally affiliated sports'

A stadium that would seat a minimum of 9,000 fans could be coming to Downtown El Paso within two years, and with it, a major league-affiliated baseball team.

The City Council on Tuesday will consider authorizing City Manager Joyce Wilson to sign an agreement between the city and MountainStar Sports Group LLC to build a $50 million stadium, which would house a Triple-A minor league baseball team.

The agreement would be the first official step in creating a public-private partnership to build the ballpark, and it is contingent

on investors purchasing a franchise and relocating it to El Paso. The investors, local businessmen Woody Hunt and Paul Foster, say the stadium deal must be in place before the purchase can be final.

If its approved by the council on Tuesday, the resolution would authorize Wilson to relocate city operations to other Downtown sites so the stadium may be built where City Hall now sits.

"It's going to be a big day for El Paso," Wilson said, and added that to secure the team, the city would have to commit to having the stadium ready by April 2014 or, at the latest, for the 2015 season. "It's our watershed moment."

Hunt, chairman of Hunt Companies, and Foster, executive chairman of Western Refining are the main investors behind MountainStar

Sports. Other members of the group include Joshua Hunt, senior vice president of Hunt Companies and managing director of Hunt Holdings, and Alejandra de la Vega Foster, president of Almacenes Distribuidores de la Frontera.

Members of the corporation would not name the team they're working to buy, but sources have said it could be the Tucson franchise in the Triple-A Pacific Coast League, which is for sale. Triple-A baseball is one step below Major League Baseball. The Tucson Padres are the minor league team of the San Diego Padres.

"We cannot bring a team to El Paso without having a state-of-the-art ballpark in place or a firm commitment to build one," Joshua Hunt said in a prepared statement. He said that Minor League Baseball is stringent about its policies to have teams play in safe, family-friendly ballparks.

"For the most part, those venues are Downtown sites," Josh Hunt said in the statement.

Securing a Triple-A baseball team hinges on having a ballpark that would be approved by Minor League Baseball.

"El Paso is ready for professionally-affiliated sports," Josh Hunt said. "A Triple-A baseball team and a new ballpark would be a tremendous quality-of-life opportunity for the city, as well as a catalyst for Downtown revitalization and a boost to economic development."

City representatives appear to support the idea, and Susie Byrd, Ann Morgan Lilly, Cortney Niland, Michiel Noe and Steve Ortega say they're excited to move forward with the proposal. Mayor John Cook and Rep. Eddie Holguin didn't immediately return calls Thursday.

Reps. Emma Acosta and Carl Robinson said they support the stadium but still have reservations and questions about the proposal, including the location and the impact of the financing options on taxpayers.

Financing: Checksand balances

The stadium, estimated to cost from $45 million to $55 million, will be funded primarily through hotel occupancy taxes, Wilson said.

Other funding sources could include lease revenue bonds or other debt obligations issued by the city. It was unclear Thursday whether certificates of obligation -- which are repaid through property taxes but don't require voter approval -- could be used in combination with the hotel tax to pay for a sports facility.

City officials have said other potential funding sources for the stadium are revenues from an increase to the vehicle tax, which would require state authorization, as well as revenues from the Downtown Management District and the Tax Increment Reinvestment Zone. Ticket surcharges and team and corporate sponsorships would also help fund the stadium and its operations, officials said.

El Paso's 15.5 percent hotel occupancy tax, now distributed to the city, county and state, will increase to 17.5 percent. The 2 percent increase would be dedicated to fund the baseball park. The increase to the hotel tax and its designation to the ballpark would require voter approval, which would probably be on the November bond ballot.

"It's a great economic development tool for our community with most of the revenue paid for by outsiders," Ortega said. He added that those revenues could cover about 70 percent of the baseball park's cost. "It's transformational."

The 17.5 percent hotel occupancy tax rate would make it the highest in the state. Officials said that El Paso will continue to rank as one of the most affordable cities when the actual per-night revenue is calculated.

The increase to the hotel tax will add about $1.40 per night to the average El Paso hotel bill. That could generate about $35 million over the life of the bond, Wilson said.

Niland, who represents Downtown, said part of the deal will be that the team cannot relocate to another city for the life of the debt of the ballpark. If the team were to relocate, it would assume the remainder of the debt.

"There's many checks and balances that will happen to ensure that El Paso's investment is secured," Niland said.

Location, location, location

If approved, the ballpark would be built where City Hall, the Insights Museum and the Community Garden now stand, which means city functions would be relocated. City Hall was opened in 1979.

"That's that ideal site where we can control and deliver a product in the time frame we have," Wilson said.

Earlier this summer, the tax office formerly housed at City Hall moved to the Wells Fargo Building Downtown, and city officials have been looking to relocate the information technology department to another Downtown building.

Wilson said that if the council approves the plan Tuesday, she will immediately assign a "relocation guru" to work with real estate agents to find city offices a new home. In the short term, that could mean entering into low-cost leases, she said, while a long-term strategy could involve buying or renovating a building closer to the County Courthouse and other government buildings Downtown.

In the long term, the baseball stadium appears to be part of a larger plan to create a sports entertainment district by the existing entertainment district. The sports district would include the baseball park, a multipurpose entertainment center where the convention center now sits and a possible soccer stadium at Union Depot.

"They won't happen all at once, but we do have to look at where things will fit in the future," Wilson said.

The Downtown Sports Complex Study by Urban Design, which was contracted by the city, will be presented to council on Tuesday. The financial impact of a Downtown stadium will also be presented.

Moving forward: Bond issue

In May, the City Council approved a project list for a $468 million bond issue that will go to voters in November. The list was a pared-down version of the originally proposed $835 million bond issue that included a baseball stadium at a cost of $45 million to $55 million.

The $468 million quality-of-life bond issue will include $190 million for parks and recreation facilities, $50 million for the zoo, $12 million for libraries, $36 million for museums, and $180 million for a multipurpose sports and entertainment center.

It will not include the originally proposed street projects, a soccer stadium or the Sun Bowl Stadium improvements. A seven-year, $210 million street improvement plan will be funded using certificates of obligation, officials said. The street improvement plan is also on Tuesday's agenda.

Under the plan approved by the council, the bond ballot will group projects into two categories. One proposal will include parks, recreation and amateur sports facilities such as soccer complexes and competitive pool. The other will include cultural and entertainment facilities such as libraries, museums and a multipurpose center.

The third proposal will ask for the increase to the hotel occupancy tax to help support the baseball park.

Cindy Ramirez may be reached at cramirez@elpasotimes.com; 546-6151.

1. A presentation of the Downtown Sports Complex Study as developed by Urban Design.

2. A presentation of the financial impact of a Downtown stadium.

3. A resolution authorizing the city manager to sign the term sheet as agreed on by the city and Mountain Star Sports Group LLC, signaling the creation of the public-private partnership and the intent of the city to build a public sports facility if investors are able to purchase a Triple-A minor league baseball franchise and relocate it to El Paso.
The resolution states that the city intends to locate the ballpark where City Hall now stands and authorizes the city manager to complete the planning for the redevelopment of the site and get it ready for construction. That would include terminating leases and relocating city operations.
It also authorizes the city manager to proceed with proposed financing plans, including the possible use of a venue hotel occupancy tax if approved by the voters at a duly called election; lease revenue bonds issued by a local government corporation formed by the city; and/or other debt obligations issued by or on behalf of the city for the construction and development of the ballpark.
Finally, the resolution allows the city manager or her designee to negotiate a contract for the construction and future operations and maintenance of the ballpark.

4. A resolution providing for the planning, acquisition, establishment, development and construction of a sports and community venue project and designating the method of financing the project pursuant to Chapter 334 of the Local Government Code.

The meeting will be at 8:30 a.m. Tuesday in the City Council chambers, second floor, City Hall.

Emma Acosta: "I say yes to the stadium, but I cannot respond to all the other variables yet. Just received a report that I've just started reading."

Susie Byrd:""I'm very excited about it. I think certainly most people see it as really important investment in Downtown and helping it come to life again."

Ann Morgan Lilly:""It's a real opportunity for El Paso and Downtown. I understand why the location would be an excellent place for it because of the access."

Cortney Niland:""Aside from an economic development boost, the baseball park will bring the affordable, quality family entertainment that this community is thirsty for."

Michiel Noe: "You couldn't find a better place Downtown to put a baseball stadium. We need to assure them that we'll have the stadium. Work has to be done right and very quickly."

Steve Ortega: "It's a great economic development tool for our community with most of the revenue paid for by outsiders. ... It's transformational."

Carl Robinson: "It doesn't pass the common-sense test to give away your house and rent another space to live in," referring to his reservations about relocating City Hall and the impact the ballpark could have on the city-owned Cohen Stadium.

Mayor John Cook and Rep. Eddie Holguin didn't immediately return calls Thursday.

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