After months of debate over where the city should build its $180-million arena, several El Paso City Council members say they haven’t gotten crucial information they need to make that decision and even feel misled.
The biggest question that hasn’t been answered, they agree, is whether the arena must be within 1,000 feet of the Downtown convention center in order for the city to qualify for millions of dollars in state incentives.
The answer, according to state officials contacted by El Paso Inc., is “no.”
But city Reps. Jim Tolbert, Emma Acosta, Claudia Ordaz and Lily Limón say they’ve been given to understand that the answer is “yes.”
Mayor Oscar Leeser suggested as much at last Tuesday’s City Council meeting when council members voted for a new study of possible sites within 1,000 feet of the convention center.
But Kevin Lyons, a spokesman with the Comptroller of Public Accounts in Austin, said participation in the state’s incentive program depends on two things: first, having one or more large, convention hotels, not an arena, near a convention center; and second, the city having an ownership stake in at least one hotel.
What? We haven’t heard that before.
“The hotel has to be owned by the city or on city land,” Lyons said. “There has to be a hotel. If there’s no hotel, there’s no rebate.”
But, as El Paso Inc. has learned, the city will have that – because the owners of the former Camino Real Hotel will give the city ownership of the land on which the hotel sits. The land under the Marriott Urban Courtyard, now under construction nearby, has already been conveyed to the city.
El Paso’s inclusion in the state’s Convention Center Hotel Program will depend on other factors, as well. At the top of that list is the value of the incentive and investment packages the city is offering to the Meyers Group, owners of the Camino Real Hotel, and the Marriott’s owner, attorney Jim Scherr.
City Rep. Michael Noe said he has known and understood all of that, but other city representatives say they did not.
“They never explained it,” said Acosta, referring to city administrators from the city manager, Tommy Gonzalez, on down. “They didn’t say how it was all going to work. They didn’t tell you, they didn’t tell me, they didn’t tell anyone.”
Tolbert said, “It was all sketchy. It was trust us, trust us. We know what’s best for all of us. It’s very frustrating. It’s kind of hard to do anything when information is so controlled from the top.”
Back in November, it was city Rep. Cortney Niland who announced that the city would be in line for $25 million from the state if the arena went up within 1,000 feet of the convention center.
El Paso Inc. has been unable to ask Niland where she got that idea because she’s been unavailable for more than two weeks because of an undisclosed family emergency.
“If you were to ask her, she would probably say we got that from Tommy Gonzalez,” Limón said. “The whole thing has been so confusing.
“I have been very suspicious throughout the process of exactly how the state reimburses the city for this project,” Limon said.
Ordaz told El Paso Inc., “We understood that without the arena, the city can’t participate.”
The city has gone to great lengths to ensure that the comptroller’s office will approve El Paso’s participation in the state program when the city applies. It’s a high-stakes bid for all involved.
The city will provide the hotels with millions of dollars in tax breaks and incentive payments – much of which would come from rebates of state hotel occupancy and sales taxes collected in the 1,000-foot area around the convention center.
According to the city’s term sheet for the Camino Real, the Meyers Group will receive up to $30.4 million in incentives over eight years and must invest no less than $70 million in the hotel-convention center project.
If the city’s bid for inclusion in the state program is denied, all deals are off.
In 2015, state Sen. Jose Rodriguez co-sponsored legislation bringing El Paso under an older law that authorized the rebates to other Texas cities participating in the program.
Since 2012, Dallas, Fort Worth, Houston and San Antonio have received $67 million in state tax rebates.
Rodriguez said he became concerned about the city’s interpretation of the law last November when he saw Niland quoted in El Paso Inc. as saying the city could get as much as $25 million from the state if it built the arena within 1,000 feet of the convention center.
“We would lose it if we picked the other site,” Niland said then, referring to a site the city had considered a mile away behind City Hall.
Niland said the availability of that money was an important reason for City Council to stick with its selection of the historic Duranguito neighborhood for the new arena, immediately south of the Convention Center.
She said the city could use the additional money to build a bigger, 15,000-seat arena, as opposed to a 12,000-seat facility that consultants said was the most the city could afford for $180 million.
“I don’t know where that came from,” Rodriguez said. He said he wrote to the city attorney’s office asking for an explanation.
“It’s now been weeks since we posed the question to them to cite us the law or give us some rationality for their position that a multipurpose arena would enable them to take advantage of the law, and we haven’t gotten any response,” Rodriguez said.
When El Paso Inc. asked for an explanation last week, the city made four people available for a telephone interview: the city attorney, Sylvia Firth, deputy city manager Cary Westin, chief financial officer Mark Sutter, and interim economic development director Jessica Herrera.
They said that while the arena isn’t needed for participation in the state program, building it close to the convention center would greatly enhance the city’s application and could increase the amount of the rebates.
“Projects like the multipurpose center are considered amenities that are in support of the convention center campus,” Herrera said. “So, amenities such as the multipurpose center are what would give us an opportunity to prequalify this and submit it to the state.”
Firth said the comptroller’s office will also want to know what the city intends to do with the money from the state, and linking the city’s stake in the hotels with the convention center and arena would help make the city’s case.
“It’s all in support of convention center activity,” she said. “We’re not saying it necessarily needs to be within 1,000 feet. But we need to be able to say in good faith to the comptroller’s office and to the community ... this is part of an enhancement to the convention center site.”
Asked if council members have gotten the full explanation, Westin said, “Of course.”
Firth added, “We have explained it many times.”
Email El Paso Inc. reporter David Crowder at email@example.com or call (915) 534-4422, ext. 122 and (915) 630-6622.