Paul Foster

Paul Foster, one of the investors in the MountainStar Group, says the deal to bring Triple-A baseball to El Paso is moving ahead.

Since the 1980s, every plan the city has come up with to revitalize Downtown El Paso has hinged on getting large-scale private investment to complement public spending.

But potential investors, doubting El Paso’s promise for three decades, shied away.

In recent years, Paul Foster and Woody Hunt, whose El Paso-based companies have made their money elsewhere, have contributed millions to help the University of Texas at El Paso and Texas Tech University’s schools of medicine and nursing.

For those gifts and others, they have won the gratitude of a city unaccustomed to such generosity.

Foster has also sunk millions into acquiring landmark but failing Downtown properties: the Blue Flame Building, once the home of El Paso Natural Gas, the long dormant Plaza Hotel and the Mills Building, a Henry Trost gem now painstakingly restored.

It was all good until the Fosters and Hunts proposed to buy a Triple-A baseball team for $20 million and bring it to El Paso, prompting the city to agree to build a $50 million ballpark where City Hall now stands.

Amid the muted excitement of city leaders, questions, suspicions and opposition have sprouted like weeds after a monsoon rain.

In a poor city that has watched three dozen or so public officials and well-known figures confess and plead guilty to giving and taking petty bribes since 2007, trust comes hard these days.

But last week, the city learned that the Foster-Hunt partnership, MountainStar Sports Group, had received the blessing of Minor League Baseball’s Pacific Coast League to acquire the Tucson Padres. Little is left before the purchase is final.

Foster grew up in Lovington, N.M., and went to work for El Paso Refining, which had acquired El Paso’s Texaco and Chevron refineries on Trowbridge in 1986.

When the company filed for bankruptcy in 1992, he and a group of investors formed a company to manage its assets. In 1997, Foster formed Western Refining and began working on a plan to buy the refinery.

He did that in 2000 and moved to El Paso where, he says, he intends to stay.

An insightful realist when it comes to business, Foster is frustrated by the current doubts about his motives and vision for El Paso and Downtown.

Last week, Foster responded to El Paso Inc.’s request for an interview by calling in to answer a few questions about baseball and why he is putting so much of his money into Downtown El Paso.


Q: What can you tell us about the status at this time of MountainStar’s effort to buy a Triple-A team?

We’ve gotten all of our approvals from Minor League Baseball and we’ve now been authorized to file a Control Interest Transfer to move a team. It’s really about the final step in getting approval.

Q: Does that mean that this deal, but for the formality of a final agreement, will be a reality in fairly short order?

I think so. There are a couple of administrative things that have to be done and a couple of other provisions that have to be taken care of that I can’t speak to directly.

Q: Any idea when you might be able to make a formal announcement?

I think it will be in the next week or two, but I don’t have any specific idea.

Q: Opposition to the baseball project seems to be growing. Is it making you a little nervous?

No, I don’t think so. I get the impression that it’s a very small group that are opposed to it, but that they’re very organized.

I’ve never met anybody that’s opposed to it. People stop me constantly on the street or wherever and I get nothing but positive feedback. I’m concerned about it in that I don’t want all of this opposition to cause any problems in this process, but I’m not concerned to the point that I think they’re going to succeed.

Q: Northeast city Rep. Carl Robinson is upset that the Triple-A team MountainStar Sports Group is attempting to buy would go to a new stadium Downtown and not to Cohen Stadium. Who said Cohen would not be the appropriate place for the Padres?

When we started this process more than two years ago, we brought the executive committees of the Pacific Coast League and of Minor League Baseball to El Paso. They made two trips. We had very serious meetings with them. Part of that discussion was where the team would play.

We took them to Cohen Stadium. We told them that that was our preference, and they told us that it was a non-starter for them. They also told us that they believed we needed a new stadium and that they would prefer for it to be in the Downtown area.

Q: What happened?

Our negotiations at that time ended up falling apart. We spent several months on that and ended up not able to do that deal. When we revisited it this time around, one of the very first questions they asked was, “What about a stadium?” And, they reminded us that Cohen was not an option.

Q: Why would they care? If there’s a group in town that wants to buy a team and bring it here, why would the PCL and Minor League Baseball care where it goes?

I think it’s important to them to make sure that the team is going to be a success. They’ve had a lot of experience, decades of figuring out what works and what doesn’t.

What they don’t want is for a team to get into the same situation that the Padres Triple-A team did. Originally, it was in Portland, and that didn’t work out and it went to Tucson.

They want a stable home for every team in the league and they want to be sure that it’s going to be successful, regardless of who the owner group is. If we’re successful getting this team, that’s great. But what if we sell it in five or 10 years? They want to be sure that it’s going to continue to be a successful franchise.

Q: So you were OK with putting the team out at Cohen then. What have you learned since?

Yeah, I think we would have been OK, and I think that was our plan. We didn’t have a Plan B the first time around.

That was our one and only plan. We were comfortable with it. I think what we have learned a lot in the last two years.

We’ve had so much interaction with the PCL and with several teams in Minor League Baseball that we’ve learned being downtown is a model for success.

If you look at the stadiums that have been built in downtown areas, you’ll see that they are a huge catalyst for growth.

If you look out at Cohen, there hasn’t ever been any development around Cohen that is related to the fact that Cohen is there. The shopping center and restaurants are not there because of the baseball stadium.

The idea is to build it where it attracts investment and development. So, I think, given what we’ve learned, we feel very strongly that being Downtown is the right formula.

We also believe that that had a lot to do with the PCL approving us. If it hadn’t been a Downtown stadium, our chances of it being approved would be significantly less.

Q: Are you surprised at the opposition that has come up?

I suspect teams get this in any city that they go to. I would bet that when they went to build a stadium in Reno, they had the same letters written by people who were opposed.

Q: Well, it happened in Oklahoma City and they were just moving the team from one part of town to a new stadium downtown.

I think that’s to be expected. We would like nothing better than for everybody to be in favor, but that’s just generally not the case. There were surveys done before, not really related to us but to the bond issue, and some of the questions in those polls were about baseball. They asked about soccer and baseball and some kind of arena, and the one that got the most support was baseball.

Q: I don’t know that people would be having so much heartburn about this were it not for the plan to demolish City Hall to make way for a baseball stadium.

The same with Cohen Stadium. Some think we have this fabulous stadium but the fact is it’s not. It was great when they built it. But the fact is it doesn’t meet the standard of Triple-A or even Double-A or Single-A baseball in today’s environment.

My understanding is they’ve been looking at moving City Hall for several years and they realized they needed to spend, in the low range, about $15 million and the upper range in the 30s, to continue using City Hall.

So, the decision point is this: We’re going to spend this money anyway, is this where we want to spend it? Is this the right place for City Hall? Is this the right building? Is it the best use for this piece of property?

I think the best answer to every one of those is no.

The issue of tearing down City Hall is not related directly to baseball. It’s just that this opportunity we have with baseball has accelerated things. I honestly think that if it we weren’t putting a baseball stadium there, they would put the Downtown arena there.

Q: We’ve been told by the mayor and it’s been reported that you have cleared the asbestos out of the Blue Flame Building, that you plan to replace the heating and cooling systems and the elevators and that all of that is kind of an invitation to the city to move in there. What can you tell us about your plans for the Blue Flame?

Well, I’ve heard the mayor say that, and it’s not exactly accurate. We haven’t done any physical work at the Blue Flame other than hiring contactors to tell us what it would take to renovate the HVAC system and the elevators and bring them up to today’s standard.

I think the confusion is that several months ago we did undertake a project to completely demolish the inside of the Plaza Hotel, which included asbestos abatement and everything else. There’s not a lot of asbestos work to do in the Blue Flame. Most of that was done years ago under previous ownership.

Q: Is there a plan or proposal for city government to move into the Blue Flame?

Not really. What I did is I threw that out there as an option for them because we’re on a pretty short time frame for tearing down City Hall, and they’re looking to see what their options are.

So, what I’ve told them is that I would make the Blue Flame available to them essentially free, except they would have to pay the cost to upgrade the HVAC and the elevators. There’s no benefit to me in paying for that because I wouldn’t be collecting any rent.

Q: Would that be a temporary arrangement or could it become permanent?

The thought when I threw the offer out there was that it would be temporary.

On a permanent basis, that’s a big asset and I think I would need to charge rent, but we’ve never had any discussions about it.

Q: So there is still the possibility of the city moving there, if that’s what they decide to do?

Right.

Q: We heard that there are bobcats doing demolition work in the old Plaza Hotel. What can you say about that?

We’re not taking out the floors, but we are taking out the walls and ceilings, flooring, fixtures, electric and plumbing. That project will be complete, I think, this week.

Q: You’re kidding. Nobody knew.

It’s been going on for many months. There have been dumpsters in the Café Central parking lot and the lot has been closed since March or earlier, and that’s for this demolition – and it has absolutely nothing to do with baseball or City Hall. We started working on a plan to demo the Plaza’s interior more than two years ago.

Q: No one did anything with the Plaza for years before you bought it. What do you have in mind?

We have a lot of different options for that building. One is to convert the whole thing to an office building. Another would be to turn it back into a hotel. We’ve got a set of plans that has it half hotel, half condos.

Another option that we have is just to develop the bottom two floors for now and put in retail and restaurants and then wait on the upper floors, the hotel or condo component.

And then only very recently, there’s been discussion about whether it would make a good site for City Hall. That is very recent and had never occurred to me till the last several weeks.

Q: How does it compare in usable space to City Hall?

I’m not sure. It’s tall, but other than the first two floors that have a pretty big footprint, the rest of it is not that big around.

Q: There’s been a lot of talk about the need for a second convention hotel to compete with the Camino Real that might inspire them to upgrade and pick up their game. Are you leaning any particular way regarding the future of the Plaza Hotel?

We’ve met with hotel developers and operators and had some discussions about it, and I think there’s some level of interest. There is no question that we need more good hotels Downtown. Thank goodness we have the Doubletree, as the Camino has just not kept up.

The best situation, or one good situation, would be for the Camino’s owners or some other owners to put some money into that hotel and bring it back to what it used to be.

Q: I understand that a number of people, including you, had gone down to Mexico City to talk to the owner, Grupo Empresarial Angeles, about buying it, and the answer is always no. Is that right?

That is correct.

Q: If you have no specific plans for the Plaza Hotel, why did you do all that work in there?

The reason we did all this work is we knew that it was going to be disruptive, dirty work, and we’re just about to start the pedestrian plaza, which is Mills Street in front of the Centre Building. That is going to become a pedestrian walkway with fountains and trees and all kinds of stuff.

We thought it would be better to go ahead and get all this work done at the Plaza ahead of that.

Q: What abut the Mills Building? I heard from a commercial real estate agent that you’ve probably put about $60 million into the renovation. Is that true?

I won’t acknowledge how much we spent there, but what I will tell you is we don’t ever expect to recover our investment.

Q: Then why are you doing it?

To me that was my opportunity to significantly invest in Downtown redevelopment. I look at this baseball opportunity as exactly the same thing. We’re not doing it to make money. Our goal is not to lose money.

We don’t have these big profit projections. In fact, we don’t have any profit projections. But we hope we can operate this team without losing a great deal of money. The Hunts and Alejandra and myself very strongly believe in this and that it’s a very important component of Downtown redevelopment.

Q: Going back to the 1980s, the city’s Downtown revitalization plans depended on private investment that never came – until now. The city has been waiting for the investors to come in and work in partnership with city government. Why hasn’t it happened before now?

I think because these buildings are very old. Rents in El Paso are very low. You can’t make economic sense out of doing these major renovations. So, unless you have somebody who’s willing to spend the money knowing they’re never going to get their investment back, then you don’t have this kind of redevelopment.

Q: As all of these things have come up with you and your wife and the Hunts involved in baseball and Downtown development, it has led some to think you’re in it to get wealthier.

It’s frustrating to me that people view all these things that we’re doing as an effort for us to make money when it just could not be further from the truth.

Q: What are your hopes for downtown El Paso then? If the baseball project goes through and the bond issues pass, what do you think Downtown El Paso might look like in 10 years?

You can look at a city like San Antonio that started its redevelopment, what, 30 years ago? It’s something that takes a very long time. But if you have leadership in city government and also in the private sector who are committed to making it happen, it can happen.

I believe that when you start adding a baseball stadium, a downtown arena, you figure out a way to get hotels, you either replace or improve your convention facility, pretty soon El Paso is in a position of attracting serious conventions, which we’ve never done. I think it’s very exciting. But the end result of this is probably 15 or 20 years down the road.

I think businesses and government need to seriously look at moving offices back Downtown. I’m very gratified to see the city taking the first step in that, in trying to move people Downtown.

Another thing I’ll mention is I’m chairman of Western Refining, and Western moved most of its employees to Phoenix. A large part of that was because it’s hard to get talented people to want to move to El Paso.

I believe that one of the most significant things we can do to attract business to El Paso is to create a quality of life here. Give them things to do. Give them a vibrant Downtown and family entertainment. We’ve fallen way behind in that. I think all of these things that we are doing go toward creating an environment that will allow us to attract business.


 

Email El Paso Inc. reporter David Crowder at dcrowder@elpasoinc.com or call (915) 534-4422, ext. 122 and (915) 630-6622.

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