The new shopping center we know as The Fountains at Farah is another example of the two step process that gets used in El Paso to get the public to help pay for new development.
The pitch, or step one
The first step was the request for $12 million in tax rebates from the city and county. The money was needed to make the project economically viable for the developers.
The sales pitch was that the new center would bring “upscale retailers” to El Paso.
They got their $12 million after a long battle. This quote from El Paso Inc. summed up the loser’s argument:
Simon Properties, which owns Cielo Vista Mall, and De la Vega Group, developer of Las Palmas Market Place, argued the center would simply steal tenants from other El Paso shopping centers and malls, especially damaging as the economy was slipping into recession.
The Inc. went on to write that our local leaders took measures to keep that from happening:
The city and county responded by tying the entitlements to a requirement that The Fountains attract net new tenants to El Paso.
We now know that Best Buy and Barnes and Nobles are doing precisely what the losers feared. They are both closing existing stores and moving to the Fountains.
Step two
What about the promised upscale stores? El Paso Inc later published another article that explained why no luxury stores have decided to come to El Paso.
The developers tried, but we just aren’t affluent enough, especially since our property tax bills will go up as a result of this.
None, nada, zero, zilch upscale stores.
The result
El Paso got a very nice brand new shopping center. The taxpayers gave away $12 million. Existing stores did move out of old centers and into the new one. The existing tax paying retail center owners got taken.
We deserve better
Brutus
elpasospeak 
So, do we get a refund on the tax giveaway since The Fountains didn’t deliver on its promises? Does anyone in City Hall even care?
Me, I’d settle for a west side Trader Joe’s as it would save a lot of trips to Albuquerque.
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Are you crazy?! No and No. Maybe you should move to ABQ, I personally can’t wait to move. 2014 can’t come soon enough.
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The bottom line is that developers can promise the city anything but if they don’t deliver there is no penalty. How many companies have left after their incentives time out. I wouldn’t be surprised if The Fountains’ developers sell the center after a few years. I would like to see the city and county build in a penalty if the developers do not produce the benefits highlighted in their sales pitches.
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To say “they tried” is really a lame excuse because it was probably just a heckuva lot easier to get current retailers to relocate. The excuse that this city is not “affluent enough” is an even more lame excuse that smacks of snobbery, affectation, and arrogance.What do the high end auto dealers and real estate people who are doing fine here have to say about that. Maybe one or two high enders came up with that excuse, but there are a host of other reasons why it’s not a good time to move here. You are right on that the existing tax paying retailers got taken, but, even more, the common taxpayer got taken because our property taxes go up to make up the difference for those that get the tax breaks! When do we get a break? As for the open air shopping center with wind, dust, cold, and heat to tolerate, the Fountains, whose fountains will one day be waterless, in this lowly taxpayer’s opinion,.suck .
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There’s no shortage of “arrogance” and “snobbery” within our own community. We have our own elitists, who view those outside their click as simply people to be tolerated.
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Well said! On another note, wealthy “peers” and high-end retailers that Foster and Co. have been soliciting to come to El Paso have, more than likely, been able to see through his hypocrisy considering that he’s cut out and moved his company’s main offices to Phoenix or thereabouts. Maybe he should have thought about that little inconsistency before he went recruiting.
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Is anyone surprised? All of the “promises” made have been proven to be lies. It began with the Doubletree Hotel and their walk back of their promises and of course they get an amended agreement from our government lap dogs. Then it was a new downtown to bring in shoppers from out of town. Anyone remember that promise? Then it was a mall next to a mall, all these fancy new stores etc. Now that the obvious truth has been exposed, meaning it’s a zero sum game, we are being asked to finance another downtown hotel. The cost of the ballpark has exploded from its original estimates. MountainStar had to walk back its asking the city for more cash when they saw that even the hacks at city hall had seen enough. Of course some people really believe that MountainStar wanted to pay for the latest increase all along, how can anyone be so naive? This is not capitalism or the free market. The irony is that the very same people begging for government handouts are the same ones crying about high taxes and intrusive government.
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Absolutely. Thank you. My feelings exactly.
The El Paso Times and other news organizations actually helped Mountainstar walk back its position regarding the last ballpark increases, even after Josh Hunt threw the media under the bus for what he claimed was “misreporting”. Hunt’s letter clearly stated that if Mountainstar funded the last round of overages they wanted not just more control, but also for the city to absorb certain other costs as an offset to Mountainstar’s additional investment. Some of those costs included some things that would reduce Mountainstar’s operating expenses. Yet, Muench and the Times now act like there were no financial offset demands in the letter.
Your point about this not being capitalism or the free market is right on the mark. Hunt and Foster both are big Republican donors and self-proclaimed conservatives. They oppose big government and high taxes, except when it benefits them personally. The Hunt family of course made much of its wealth off of federal government contracts. Their friend Paco Jordan made much of his money off of government funded projects.
The other irony is that many people, even some readers of this blog, keep suggesting that things like the ballpark are being pushed through by political “progressives”, a label commonly used to describe liberals, when in fact the self-proclaimed conservatives like Hunt, Foster and others are the ones driving all of this and benefiting financially.
When an individual wants or needs help, the so-called conservatives label it welfare. When the Hunts and Fosters want money, it’s considered capitalism, progress, or a public/private partnership — not corporate welfare, which is what it really is. I would say that is both disingenuous and dishonest.
I am fed up with all the deception and misrepresentation. I would respect these folks more if they would just admit that they want to personally profit on the backs of taxpayers and the community as a whole.
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I know all 7 conservatives in El Paso and they consider the ballpark fiasco corporate welfare. If the progressives/liberals on City Council hadn’t gone along with Foster and Hunt, the ballpark would have been voted down. Go figure.
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Maybe the new stores did not come here because our local Taxes are high? Not enough water?? El Paso is in the TOP 10 Poorest per-capita cities in the USA? Too close to Juarez?? Too much Sunshine? Too far from Austin? because the Economy is not a good as the Big ‘O’ Government says?? Developers are not risk takers?
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QOUTE: The city tax-incentives agreement with the Farah developer doesn’t require a certain tenant mix, nor does it require a certain number of new retailers to this market. That agreement and a similar county agreement allows the developer to collect up to $11.7 million in rebates for sales and property taxes at the center for up to a 10-year period beginning this month if certain requirements are met. The agreements were made as incentives for the developer to build the center.
None of the stores people wanted, and the developer is coming out on top.
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According to comments from the Oct 1 City Council meeting that ran on the city channel last night, The Fountains developer will not receive rebates for stores that are neither new to El Paso nor an additional branch of a store already here.
In other words, if a store moves from another location, as Barnes and Noble, BestBuy and PetStop did, the developers will not receive the incentive and my possibly pay a penalty. Council discussed this briefly and asked the City Manager to come back within a month with a report on the details of the original agreement. Stay tuned.
There was also an excellent suggestion from Rick Schecter that an outside entity review all agreements that CC makes and make sure all provisions are enforced. Eddie Holguin asked for follow-up on this suggestion. What this means is that any agreement has to make good economic sense and has to be enforced.
Maybe, just maybe there is a light at the end of the tunnel.
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All they have to do is get a Cheesecake Factory and everyone will shut up. OOOOOooooo! Lookie we got a Cheesecake Factory!
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LOL
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