Tearing down City Hall and putting up a ballpark in its place “could either turn things around and be the biggest thing that has happened in the last 50 years in El Paso, or be the greatest boondoggle,” city Rep. Michiel Noe summed up Tuesday.
Josh Hunt, along with his father Woody Hunt of Hunt Companies, Western Refining executive chairman Paul Foster and his wife Alejandra de la Vega Foster are betting on the former as they move forward to buy a Triple-A baseball team, one step below the Majors, and bring it to El Paso.
And City Council is betting with them. On Tuesday, the council approved the demolition of its home and spending $50 million on a new Downtown ballpark. From the perspective of Josh and his father, buying a team is less about the baseball and more about promoting economic development and quality of life in El Paso, providing “affordable family entertainment.”
“Every great city has a great downtown, and this will go a long ways to further efforts to make our downtown great,” Josh Hunt says.
Late Friday, Hunt said the group made its case for El Paso before the Pacific Coast League’s executive committee meeting in Dallas. A decision about the purchase is expected from Minor League Baseball in a couple of weeks.
Josh Hunt has a bachelor’s degree in real estate and finance from the Cox School of Business at Southern Methodist University and a master’s degree in real estate and construction management from the Daniels School of Business at the University of Denver.
He also serves as senior vice president of Hunt Companies, a real estate company headquartered in El Paso that manages more than $13 billion of assets. He is involved in several non-profits, including the Sun Bowl Association, YWCA, Junior Achievement of the Desert Southwest and Project ARRIBA.
Josh Hunt, 33, is president of the non-profit Hunt Family Foundation, a member of the Paso del Norte Group and he serves on the University of Texas at El Paso President’s Athletic Advisory Council.
Many tough questions were asked at the prolonged and sometimes heated City Council meeting about the baseball proposal on Tuesday. We put some of those questions to Josh in advance of the Dallas meeting.
In an interview with El Paso Inc., he talks about why City Council had to act so quickly, MountainStar’s assurances that the team will not leave until the ballpark is paid for, and why the non-compete clause that jeopardizes the future of the El Paso Diablos was necessary.
Q: City Council moved swiftly on Tuesday to approve the project. Why the need for such fast action?
We have been trying to get a Triple-A baseball team for over two years. There are only 30 of them around the country and these opportunities are very rare. The teams trade on average about every two or three years and, if we were going to take advantage of the opportunity, we had to act now.
Q: I take it a team is looking for a new home. What team does MountainStar want to buy?
We have to respect the confidentiality of both the potential seller and the league so we can’t really get into the details.
Q: It has been widely reported in Tucson that an El Paso group has contacted the owners of the Padres’ Triple-A affiliate there.
Whichever we potentially acquire, our plan would be to move the team to El Paso and make it El Paso’s team. But getting into specifics of which team, there are confidentiality agreements in place, and I just can’t discuss that.
Q: Some are concerned that the machinery for this was put into place and everything decided before the public even knew about the Downtown ballpark plan.
The first article rumoring the effort, if I remember correctly, appeared over two years ago. So it’s been out in the public realm. This is a very competitive process and that is really what requires the confidentiality. We are out competing against many cities, and some much larger than ours, for these opportunities.
Q: How did this whole discussion about a ballpark start?
It’s a longtime desire of both my father and Paul Foster to really make the community they live in as great as possible, so they are always strategizing and thinking about how they can make our community better to live in and more competitive. Eventually, we got around to an opportunity to try to bring a Triple-A baseball team to El Paso, and that launched two years ago.
Since then, we’ve had some ups and downs. It is a very competitive process. There are a lot of cities that want Triple-A affiliated baseball, and we have been competing with those cities.
Q: When you approach the league for approval and then make an offer to buy a team, what will your pitch be?
We, obviously, believe greatly in El Paso. Income numbers continue to rise. We have great population growth. We have things going on like the medical school, the Fort Bliss growth and for a long time El Paso successfully supported Double-A baseball.
So we believe that El Paso is a baseball market and the citizens will support it strongly when we provide affordable family entertainment.
Q: El Paso is a baseball market?
It goes all the way back to the 1800s with the El Paso Browns. We’ve brought in consultants, we’ve done our research, and we believe Triple-A baseball will be successful in Downtown.
Q: What are some of the challenges pitching El Paso as a baseball market?
We have some income level challenges, but we are continuing to improve on those. With the efforts here to try to improve our quality of life, improve our Downtown, and to make our community more competitive with other communities that we compete with on a daily basis, El Paso is going to continue to progress.
Q: There are a lot of other things $50 million can buy and other ways to stimulate the local economy. Why is this project particularly important for El Paso?
There are a lot of pieces that go into quality of life and economic development, and we think this can be a game changer in both areas. Every great city has a great downtown, and this will go a long ways to further efforts to make our downtown great.
Reno recently built a new downtown ballpark and created a ballpark district that has been highly successful. It boosted spending in the range of $3.7 million from residents and $1.1 million from tourists. The Triple-A ballpark built in the late 1990s in Oklahoma City has been highly successful as well. It has also worked in Tulsa, Denver, San Diego and the list goes on.
Q: Oklahoma City has been mentioned a lot lately as a model.
More than 20 years ago they started a MAPP process (Mobilizing for Action through Planning and Partnerships). Sales tax increases funded several downtown projects, which included the Triple-A ballpark, the basketball arena, they funded improvements to the convention center and some other items.
So you had significant investment by the public sector and, with that, received a nine-to-one return from private investment. Hopefully, that is what is going to occur in Downtown El Paso.
Ten, 15 years from today, when you’ve got a downtown ballpark and, hopefully, all the pieces funded by the quality of life bond, and the trolley system, you are going to have a completely different downtown than we see today.
Q: In 2005, Stockton, Calif., made a slew of public investments, including a sports arena, and moved its City Hall in an effort to stimulate its Downtown area. It filed for bankruptcy last week. Did you also look at cities where sports investments failed?
I am not familiar with the Stockton situation, but I know California as a whole has had its own set of problems. The city of El Paso, under the leadership of Joyce Wilson, has done an extremely good job of managing its finances.
Q: Any ideas on a name for the team?
It will include “El Paso.” There will be a very public process in getting ideas from the community as a whole. That is something that will take place after we get through, hopefully, these final steps.
Q: Did MountainStar have input on the location of the ballpark? Why build a new one Downtown instead of, say, upgrading Cohen Stadium?
It was driven in a large way by both the league and the city. Over two years ago when we started this process, we had several members of minor league baseball in town and they toured Cohen Stadium in Northeast El Paso and sent us the signal that it was an inadequate facility to attract a Triple-A baseball team.
They also went over several of the recent examples of successful ballparks that had been opened in downtowns. That’s where they prefer their ballparks to be because they’ve seen how successful that is.
Q: Why was it so important to have the non-compete provision since it essentially means the El Paso Diablos would no longer have a home here in El Paso?
In order for us to acquire a Triple-A team, we need the approval of Minor League Baseball and its leagues. Now that we have approval from the city that a ballpark will be built, league approval will be our next step. But, for us to secure that approval, we must showcase El Paso as a preferred Triple-A baseball market. And we feel to do that, we need a non-compete clause in our term sheet with the city.
Triple-A wants to make sure that its markets are viable and that they will strongly support their teams. That’s why the non-compete is in there. It has nothing to do with any ill will towards the Diablos or their owners. We are pleased that the city will honor their contract and allow the Diablos to play through their current lease, which expires in 2016.
Q: I don’t think Paul Foster or your father have ever owned a baseball team. There must be quite a learning curve.
This, I can tell you, is not what they view as their typical financial investment. They’re not looking for the return they normally look for when investing their money. I mean, it is still a for-profit venture but it is probably bordering on a non-profit venture for the both of them.
Hopefully, there is a small return at the end, which is possible, but our focus is really on trying to provide affordable family entertainment and making our city more competitive.
Q: The city would pay $50 million to build the ballpark. What is MountainStar risking? How much does a Triple-A affiliated baseball team cost?
I can’t get into the purchase price, but we are paying well above market to get this opportunity here. We will have several million every year in operating costs to run the team and the stadium.
Q: What assurances are you giving the city that the recruited team isn’t going to leave, sticking the city with an empty ballpark and a pile of debt?
We are signing a lease for 25 years that will include a clause that will not allow the team to relocate. Even if we ended up selling the team at some point, the new owners would be required to play in El Paso until that 25-year period is up. Our big motivation is quality of life, economic development and downtown revitalization. It is not to go make a lot of money.
Q: Nonetheless, some still wonder if there is wiggle room.
We’re committing to 25 years to have this team in El Paso.
Q: If the quality of life bond initiative is passed, there could also be a new multipurpose arena and soccer stadium by the ballpark eventually. Is it all too much?
If we had all three of those, it would be a great day for El Paso. There are many other communities that have all those pieces.
Q: Another piece of the puzzle is City Hall and where city employees will work after it’s demolished. Paul Foster is a major player in Downtown and one has to wonder if he might have a property such as the Blue Flame building or Plaza Hotel that could be given, sold or leased to the city.
That’s really a city decision and a city process, so I do not know all the details or what their plans are. I am not privy to or aware of any discussions around any of that. They have a lot of options between renting, renovating or building something new.
Q: Did you ever imagine you would be in the sports ownership business?
No, we’re a real estate company out making investments every day, seeking much higher returns. Being in the sports ownership business was not something I originally envisioned, but I do think it will be fantastic in April 2014 when 10,000 El Pasoans are enjoying affordable family entertainment in our Downtown.
E-mail El Paso Inc. reporter Robert Gray at email@example.com or call (915) 534-4422 ext. 105.