Introduction
Hello everyone. I’m Carlos – I’d like to thank Brutus for inviting me to post articles on his esteemed blog.
By way of limited introduction, I’m a lifelong resident of El Paso. I’ve seen this city strive higher only to be shackled by corporate interests that seem to hold sway in this town. In the old days it was Jonathan Rogers, Larry Francis and their ilk; now, it’s the Fosters and the de la Vegas. I’m beholden to neither nor to anyone in city or any other administration – I’m just a guy with some business experience, much of it dealing with public sector entities.
My comments and responses on Brutus’ Meteoric Rates article (here) were some of the longest I’ve ever posted. Anywhere. One response after another, each displaying more narrowly than the previous, made me think that it would be more appropriate to post as an article by itself.
As an aside, my spouse officially hates that I post here. I research issues here like I’m trying to get a grant to study mating habits of boll weevils.
Most of the following is in response to comments by william and Mock EPT (here, opens in a new window). Please refer to that if the following seems a bit disjointed.
I’ve mentioned I would do what I could to dispel myths and misconceptions. I have a good idea what that’s gonna get me, but here goes anyway —
Regarding stadium financing
Financial predictions to fund ballparks, streets, recreation centers or public bathrooms are almost invariably more rosy than they appear, although in this case they are reasonable – 3% inflation and 3% growth are not outrageous by any stretch. A review of the city plan to finance the ballpark reveals the following:
- The city borrowed $60.8 million, which included bond costs, for the ballpark not $70 million as has been alleged.
- The first year’s (2014) payment always included some contribution from city revenue. It was scheduled to be from sales tax or some other source. And future payments will have the same provision, simply because no underwriter would touch them without it. If sales taxes continue to go down and the visitors we expect don’t materialize, then we get the Worst Case Scenario – a property tax increase. I expect that would be the absolute last resort to cover payments – they’d sell off the new Mulligan building before they do that.
Sorry kids, the Worst Case Scenario is not going to be here in Year One. The stadium hasn’t been built and half the city (it seems) is under construction. We’re in the first five minutes of the first quarter here. Dare I say we may not even be that far along.
Incompetence on the part of City administration? The jury is still out. But the financing does have cause for worry.
Regarding HOT (Hotel Occupancy Tax):
A commenter said looming federal spending at Fort Bliss impacts HOT revenue. Agreed – but sources that produce HOT revenue include much more than Fort Bliss. One could argue that the loss of Fort Bliss money isn’t looming – it’s already here, and it’s already been factored into the El Paso market.
We all know HOT revenues increase if El Paso becomes more attractive to visit. The ballpark will play a part; San Jacinto Plaza will play another. The upcoming bowling tournament is another, as was the C-USA basketball tournament. It seems to me that the construction of several new hotels, and the construction of a new rental car facility at the Airport that can handle more than current capacity, bodes well for the El Paso economy and for HOT tax revenue. There are no slam dunks obviously, but it’s more than enough to keep us in the game.
We also need to be a little lucky – the Lady Miners unexpectedly playing and hosting the WNIT championship, and the resulting positive publicity, has benefits we just can’t quantify.
More ballpark stuff
There are 7,000 seats to fill in the ballpark, 9,000 if you count party and standing areas. I don’t believe even Mountainstar expects the ballpark to sell out every night, but it wouldn’t be unheard of in professional baseball. For context, the latest incarnation of the Diablos averaged 2,270 a game – for the Diablos! Not when they were AA — last year! The one thing that will definitely break the financing for this situation is a consistently bad team. But there’s hope – even the perenially mediocre Miner football team gets about 30,000 souls to the Sun Bowl. We’re a city of 700,000 plus – if the club can’t get between 0.5 to 1.0 percent of the population (that doesn’t even count people in the County or Cruces) to head downtown for real, professional baseball 71 times a year then our problems are bigger than even you guys realize.
And finally…
I don’t think there’s much more I can say to shake people here off the “we’re getting screwed” mindset. To be honest, as I’ve said, I’m concerned about it. The assumptions are fairly optimistic. But again, it’s not out of the ordinary. A better deal would have been the City sharing in concession revenues, much like the Albuquerque deal. City does get ticket fees and shares some parking. But merchandise, lux boxes, all that the club gets. Sad? I agree – but it’s not out of the ordinary. But you know one thing I keep coming across that I don’t see anywhere else? That Mountainstar is giving profits to charity for 10 years. That is out of the ordinary for a sports team. Now, as a analytical business guy, I know how a corporation cooks the books. There’s a real possibility the club says ‘sorry, no profits to deliver this year’ when the time comes. That would be a huge public relations mistake for Mountainstar.
None of this should imply that I believe the ballpark will be an unmitigated success. But the more you guys make me talk about it, the more I dig through the details, the more I think I’ll be writing posts in about a year that will gracefully, eloquently say “I told you so.”
Warm regards,
Carlos
elpasospeak 
The thing is, what you call the worst case scenario, is what others of us see as the obvious scenario… exactly “who” would the city sell the Mulligan building off to? The same parties they continue to give I tax writeoffs to? At what loss?
Secondly, federal spending cuts… the majority of travellers to Ft Bliss are already tax exempt. I would’ve hoped that was factored in but there is no fiscal evidence to support this…
Do you happen to have a list of folks in Denver or Seattle or New York or even possibly Alamogordo who put San Jacinto Plaza as one of their top ten must see sights for this summer? Seriously? SJP is going make an impact on HOT Tax Revenues?
As for Profits to charities… Minor League baseball itself operates at a loss… it’s OTHER revenues that generate PROFITS… and their gesture is what? Another tax writeoff!
As for getting SCREWED… YOU did NOT get a vote, YOU did NOT get a say in the additional cost for the destruction and relocation of City Hall, YOUR city gets NO profit sharing from the stadium AND has limited access WITH restrictions to use it.
If that’s NOT getting screwed then your world must be GREAT!
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epkam,
Increasing property taxes to cover stadium debt is the obvious solution – just not the most likely one. Much will happen before we get there. As a matter of fact, I believe the city will cut services before any increase in the property tax. That in itself will cause enough pain, but unfortunately the politics for that are more favorable than increasing taxes.
There is not be any one thing that will bring visitors to El Paso – if there were, financing its construction would require an increase in property taxes. Heresy, especially among these parts. That’s why you build components; ballpark, SJP, museums, Union Plaza – it’s all connected. You gotta put some money in and then you gotta have patience for it to work. HOT will go up and it’ll be even better than you think it will be.
I read an interview that downtown improvement would have happened organically. The things the city is doing has only accelerated that process. No slam dunk success is guaranteed – but it’s better than sitting on our duffs screaming at the computer screen.
As mentioned, the deal is not favorable to the city, but it is not out of the ordinary. As for popular vote for the things you mentioned, let’s open another can of worms.
You did vote – by electing representatives. They voted for you. That they did not vote your way gives you cause to try to replace them during the next election. It is a practical impossibility, not to mention prohibitively expensive, to send these kinds of issues to a general election. Seriously? Asking the people to be informed enough to make responsible decisions about financing, stadium deals, or even stadium placement? Most of us are just trying to get by – that’s why politicians press the ‘hot buttons” to win elections, things like patriotism, religion, “welfare” and other such things. It’s a travesty that the general public does not have the time or the inclination to educate itself. That’s why we elect representatives – otherwise, what do we need them for? Sending these big issues to a general election gives those guys political cover they don’t deserve, not to mention giving special interests much more power over this city – believe me, those guys are informed, organized and have only one interest in mind – their own.
Besides, if this thing pans out, everyone will bend over backwards to take credit, to claim “political courage” for having supported it. It’s sickening, really – but it’s the way things are.
Lastly, to your claim about “vote denied,” the people voted to finance the stadium – by an overwhelming margin, as well as for many other issues that will improve the quality of life around here.
Warm regards,
Carlos
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Your statement that “the people voted to finance the stadium – by an overwhelming margin” is disingenuous and misleading. You left out the important details.
The ONLY vote we got was AFTER the decision to build the ballpark had been made the expenditure was a fait accompli. Voters were only given a choice of increasing (or not) the hotel tax to theoretically pay for the ballpark. An expensive advertising campaign, funded by special interests, led voters to believe the ballpark would be paid for by out-of-towners and at no cost to local taxpayers. To not vote for the hotel tax meant that local residents would be left to pay for it through other taxes which would be more burdensome to local individuals.
The fact that most city representatives and the former mayor voted to deny taxpayers their own individual votes on (a) the destruction of city hall and (b) whether the ballpark should be built with public money, proves just how beholden our local government is to special interests.
That, my friend, is a rigged game.
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Our only choice was to finance the stadium from HOT or from our pockets. I guess you can call that a “vote” but I don’t consider it much of a choice.
The best way to finance a stadium is the way Oklahoma City did it (yes, that example of a great success story that our City Council compared us to). The citizens approved (as in voted for) a pay-as-you-go method. No bonds were floated. No useful buildings demolished. OKC citizens approved an increase in sales tax that funded the stadium. Their downtown redevelopment took 20 years but it was done without debt. And it was done with approval of 54% of voters.
We all hope the ballpark will be a success. Our future as a city depends on it. But blowing sunshine around the room doesn’t change the fact that the stadium deal stunk and still stinks. It may be time to move on — literally. Many people realize El Paso has taken on debt — the ballpark, Children’s Hospital, schools — that the citizenry cannot support. The solution for many will be to move away from El Paso to communities that attract business and don’t depend on homeowners for their tax base.
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OKC also has lots of spacious parking adjacent to their ballpark, which is easy to get in and out of. More importantly, OKC’s Bricktown Ballpark cost only $49.2 million in today’s dollars. Yes, today’s dollars; Bricktown actually cost $34 mil when it was built in 1998. We’re spending considerably more, not including the value that was destroyed and the cost of other capital projects intended to benefit the ballpark, but accounted for elsewhere. The demographics and economy of OKC are also considerably better than El Paso, and I am willing to bet that their property taxes are lower. We’re building a monument to egos and a money machine for certain individuals, not a ballpark.
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Bal, I don’t have the energy to look this up myself, but was the populace in OKC as hung up on preventing tax increases, even for worthwhile projects, as it is here? I wonder if proponents had to wade through as polarized a political environment such as the one here.
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This article is my source of information on OKC.
http://www.chicagomag.com/Chicago-Magazine/The-312/May-2013/Public-Financing-of-Sports-Stadiums-Lessons-from-Milwaukee-and-Oklahoma-City/
The voters there passed the sales tax increase twice. That increase funded the ballpark as well as other projects without the issuance of bonds. I’m not from OKC, so I cannot speak to whether the citizens are polarized as they are here. However, the article says it was not the City Council that lead the way, but rather the Chamber of Commerce and mayor who asked what the people of OKC wanted, then called for a city-wide vote. In other words, the electorate was behind the revitalization and lead the way, rather than being told what would be done.
Some say that many El Pasoans don’t have a grand vision for their city — that we don’t think great things can be done in El Paso as in other cities. Therefore, decisions need to made for “our own good.” That attitude is condescending and destroys trust in government.
El Paso has a long history of a small group of powerful people making decisions and reaping the rewards. Susie, Beto, and Steve brought their own version of “we know what’s best for you” to City Council and further polarized the electorate. They were good ‘ol boys masquerading as progressives.
Only time will tell if the ballpark will succeed and a lot depends on the economy. We naysayers may be proven right or we may eat comida corrida crow. Either way, it will take years to undo the damage done to trust in government.
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carlos, you mean the extortion vote ? the vote where if we didnt let the hotel tax pay for it(which it wont even pay the interest) then it would have to come from property tax ? you mean that vote ? where was the vote on to tear down city hall, purchase and remodel 3 buildings for around 100 mill ? oh, thats right , when cook(cook said) told josh hunt that if he thought the voters in el paso would pass tearing hall down city hall to put the stadium that he was crazy. cook said hunt responded “you let us worry about that”. i have always said the finance has looked bad from day one. bonds being bought much higher than wilson wanted just makes it worse. i own buildings and i would never finance a building where i could only pay the interest for 10 years. its like leasing a car. you still owe the total(or more than its worth) after 10 years. cutting city services and taking sales taxes and any other fees that were being used to pay for other city services will now go towards the ballpark. its taking tax money out of your left pocket and putting it in the right pocket to pay paul. problem is the left pocket will have to be refilled due to the drain of the right. that will have to come from property tax. joe wardy and our new mayor have one thing in common. before they will spend money on something like this they will ask the people to vote on it. thus, the 74-26 ass whipping of steve ortega even after foster and hunt poured dollars into steve’s campaign. fook us once, shame on you, fook us twice, shame on me.
p.s. our illustrious city manager never even looked at albuquerque’s contract or if she did then she didnt care. even a moron like acosta saw albuquerque’s deal was much better than ours and made council change a few things. a strong mayor got them a better deal than our overpaid harvard grad city manager. you watch. it looked bad enough when foster bought jordon contruction. can you imagine how bad it would look if he hired wilson after she leaves ?
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sir william, you had me til you got to Joe Wardy, in my opinion as useless and self-righteous a mayor as we’ve had in a long time. I wouldn’t be surprised if his picture came up if you Googled “beholden to special interests.” It’s hard to knock off incumbents in this town but two years of Joe was all this city could stomach. Kicking him to the curb by itself launched us into the 21st century.
As for the stadium financing, well, I guess the ideal thing would have been to save the money and pay cash; it would avoid the “doom and gloom” talk that permeates this site (my gosh, how do you guys manage to sleep at night, so worked up about this stuff you guys are).
It’s also an unrealistic proposition, given that most of us finance our homes and realize, many years later usually, that our principal has gone down only by a little. That doesn’t make us stupid, necessarily- we gotta live somewhere. But it does make bankers and the financing industry a greedy, soulless bunch.
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the model to finance the building would have been oke city where they all traveled. if they had built the stadium anywhere else besides city hall the taxpayer wouldnt have to cough up an extra 100 million for 3 more buildings. i financed my home for 15 years and own it. i financed million dollar buildings and refinanced many times better than what they did here. i dont disagree on wardy, but at least he would have given us a vote. i wasnt against the stadium. i was against putting it downtown, but no, paul demanded it be downtown and it will cost the taxpayer out the arse for this little fiasco. oh, and if you financed your home like we financed this stadium then you are stupid. just like many in the u.s. did when financing was made easier by clinton and bush. good sentiments by both for wanting everyone to own a home, but some people were just born to rent.
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You’re right about Wardy.
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You’re right about Mayor Wardy.
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do any of you think that what the city council members(byrd,ortega,oroarke,anne,courtney,) and mayor cook did on this stadium vote and others was worse than what wardy had done in his past. i do. it reeks of ” beholden to special interest as much as anything wardy pulled off. foster and hunt both gave big money to the campaigns of all those who voted their way and to not let it go to a vote. cook was the big joke. he thought by breaking the tie that they would pay his attorney fees. that itself makes cook no better than wardy. maybe worse because he was against the tearing down of city hall and tried to cut a deal to put it elsewhere downtown, but couldnt get it done. id take a dozen joe wardy’s over cook. at least wardy would have let it go to a vote to teat down city hall or not.
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Let me go back to Chapter 334 of the Texas Municipal Code, which states that local governments must hold elections to approve stadiums. Chapter 334 prohibits elected officials from making that decision for the community. Of course, this is the wild, wild, west, and the laws don’t apply to rich people or local governments. Only to the citizens.
Also, it’s my understanding that property taxes can’t be used for a new stadium, but after a few years (I forget if it’s three or four), it’s okay to use them to pay off the debt.
Not to mention that the City’s finance wizard told David Crowder in an interview in the Inc. that property taxes were going to go up as a result of the QOL bond issues, anyway. And, as this website correctly identified, El Paso already has the fourth highest property tax rates of any city in the country.
The whole ballpark project was a travesty, any way you slice it. Too bad we may never see the decision making process concealed in all those private emails.
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yup. There’s this prophetic column by a former mayor (a member of the crazies).
http://www.elpasoinc.com/news/local_news/article_e86cbedc-e4c4-11e1-9be7-0019bb30f31a.html
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That’s the problem – the crazies have too much sway in the public discussion. Of course he’s upset that he and previous administrations are blamed for stagnant growth in El Paso – that’s because it’s true.
And I’m not even going to get into the untruths and misconceptions he fosters in his editorial. No wonder you guys have the views you have — If Larry Francis says them, they must be true.
Of course he calls captal improvements made during his and other administrations actual progress when they were barely attempts to keep up with the rest of country. He doesn’t mention that he and his cronies tried to stop even that under the guise of “protecting taxpayers.” His administration and others, and their failure to efficiently manage financing of city operations, caused one of the biggest tax increases in El Paso history a few years ago – when the city had to raise them just to keep operating as a major American city. Parks suffered terrible harm when he was mayor.
Quality of life sucks around here? He’s one of the ones I point a finger at. There’s a reason he was defeated by a nearly 63% landslide – he, like Wardy and ultimately Jonathan Rogers, was terrible for this city.
Carlos
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richi,
The link to the complete legislation to which you refer is http://www.statutes.legis.state.tx.us/Docs/LG/htm/LG.334.htm. I’ll probably hear about how naive I am to expect that the government would tell me the truth, but maybe our venerated state government gets a pass here…
1). You’re correct in saying that an election must be held to build a stadium – if property taxes were going to be used for construction. In this case, they were not. The legislation also requires a city such as ours, in our location in the state, to ask voters to approve a proposition to raise the HOT to pay for it – which it did. And if I read it right, property taxes (ad valorem tax) cannot be used in the future to pay for any of it without holding getting voter approval first.
2). Looking for one thing to blame for the stadium? Blame state law. The state law referenced above (last amended in 2009) prescribed the actions cities could take to build stadiums in their jurisdictions. That’s not even my opinion.
If city leaders had flouted state law, the Texas Rangers would be looking to send the lot to jail. The law and its consequences apply to everyone — we aren’t living in the 1800’s anymore.
3). If the ballpark was a travesty, I don’t know what it was a travesty of. Justice? No crime was committed, as far as I can see. The will of the people? I hate to repeat myself, but an election was held to validate the financing; by extension, the construction was similarly validated. That is not nothing. As for the continual assertion that a vote to build the stadium should have been held, the answer, plain and simple, is that state law did not require it. The law wasn’t changed for this circumstance; it’s been on the books since 1997.
It’s my belief this legislation was employed to construct the ballpark; otherwise I’m a misguided, misnformed blogger myself.
I again acknowledge that the process could have handled better, with more information and transparency. However, that requires opponents have some willingness for rational discussion. If the vitriol in the comments over the last several days is any indication, they do not.
To make this long post longer, for those so inclined, the text relevant to most of the above discussion is Title 10, Chapter 334, Subchapter H (Hotel Occupancy Taxes) of the Texas Local Government Code. I’d print it here but that would make this one long, long comment.
Warm regards,
Carlos
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the “Baseball” part of the stadium will probably operate at a loss.
As many of you say that these AA teams do.
But the BIG thing is that the city and taxpayers funded a private business and eventually the taxpayers will be taken for a ride.
Funded as in. . . 2 buildings were destroyed that THAT money will never come back. Destroyed. Gone, but ALREADY paid for by US and your parents were working extra hours for the past 40 years and threatened with City takeover of your property if you did not pay the property tax. Now that has just been. . . . blown off, as if. . . it was nothing.
Lets say the City and taxpayers destroy millions of dollars of buildings to build ME (or you for YOUR business) a building and finance it.
I will run the business as I see fit and pay the city a lowly and joke amount for rent.
This ballpark is similar to the County Coliseum in that some of the events that would have gone to the County Coliseum that COULD be done outdoors, will now be held at the ballpark.
Now, the County loses rent and the privite sector takes the rent (Mountainstar) and does not have any personal financial responsibility as they can just walk away from any of it since Mountainstar is a fake LLC corporation.
Now the County will need more money for the loss of events and will be funded by the property taxpayer, next tax bill.
Some events that would be at the Sun Bowl, like boxing, will be diverted also. More loss for UTEP and they will now be competeing for outdoor events and LOWERING THEIR price to TRY and capture that market. More loss for UTEP and shifted into the profit into the Mountainstar private sector.
Some of these events at the baseball stadium will end up on the same nights as UTEP events, Plaza and Chavez Theater events and those will lose income.
El Paso cannot have too many events going on on the same nights or even the same week with the income levels here.
Many people SAVE and put money aside for these special events and its not because they have a really good income, but shift money from “buying shoes for their kids” to some “special event”. So, its not like they have money for EVERY event.
They sort of “sacrifice” for some of these events and cannot go to EVERY ONE OF THEM. So, somebodys going to come out as a loss. (UTEP and County Coliseum) are two that will lose, having the entertainment budget split.
Most people in town would rather NOT drive downtown or go to anything downtown. That said, the baseball stadium was build for free for the private owners (Mountainstar) and the lowly rent is a joke.
The City has financed and now brought about competition for its own County Coliseum and UTEP. How bastardly.
The City could have built their own arena in the same space as the baseball stadium and just have no baseball whatsoever and still make a LOT more than the rent from Mountainstar.
They could have added onto the current Civic Center to do that.
They already have the management in place and contracts and leads and events that WANT to come, but, just not big enough or have enough “break out” rooms, smaller spaces that will accompany the larger event.
They GAVE AWAY our assets. (the property taxpayers)
Without our permission. How bastardly.
98% of everyone going to any event at the baseball stadium will be from El Paso, unless it is the Rolling Stones.
So, for the idea that it will bring all these people into El Paso for whatever and just to see the baseball stadium is a joke.
The City GAVE AWAY its money and buildings to a private and fake (LLC) company. That’s about it.
Now the City is scrambling, looking for Parking Meters to get more money, 25 cents at a time. or double it, or triple it or make the homeowners on nearby streets pay to park in front of their own houses. How bastardly.
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You frequently refer to Mountainstar as a “fake (LLC) company.” Are you saying this because the LLC structure shields business owners from personal liability for corporate debts or do you have another reason for referring to it as “fake”? Just curious.
Many corporations and LLCs sign agreements such as leases, but the members/owners are still required to provide personal guarantees. It probably never crossed the mind of anyone on city council or in city management to ask Foster or Hunt for personal guarantees.
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Mountainstar had no assets, or a team, when the dealing went down. Anyone with a few hundred dollars can set up an LLC and is not worth the paper its written on.
Any company or LLC that is not responsible for anything . . . is . . and might as well be, fake.
If I get a piece of paper for a few hundrd dollars that says that I am Roy Rogers, or John Wayne,does that make it so?
No, I am the FAKE Roy Rogers or fake company and have no responsibity, and no assets.
No one in their right mind does business with an LLC unless personally guaranteed.
Now, many Law Firms are LLC to save their ass when they get sued. Exactly the point.
To keep from being sued and liability.
Otherwise, they could have been just a regular corporation or partnership with responsibility by the owners.
But, THESE ARE SALESMEN.
And the City got “SOLD”.
I suspect, that behind closed doors (Fosters and Hunts) this whole idea was just a Joke that got carried forward with “what if”.
“What if” the city will destroy its financial assets and give us a place, a venue, a ballpark, to hold all kinds of events for a pitance. And we will buy a ballteam that is OURS to do with whatever we want.”
And they just laughed and laughed and said to themselves. . . “Hey, you guys with me? You want to try this? Do you REALLY think they will go for this?”
“Why, well set up this. . . I dont know, maybe as an LLC and just SEE what happens.”
And the CITY . . . . bought it.
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Carlos,
Oh, where do I start? Not enough time in the day to respond fully.
You quickly point out that the city borrowed just $60 million rather than $70 million without ever even acknowledging that the ORIGINAL budget sold to the public was $50 mil — a number which then quickly rose to $64. It was only when it hit $64 mil amidst great public outcry (even Courtney Niland got worried about her own political survival and pitched a fit) that Mountainstar agreed to pay for any additional overages. I’m not sure if the financing and payment terms related to the amounts over $64 mil have ever been made public.
I don’t think any of the regular contributors to this blog have ever suggested that Year One will be a disaster year.
Let me get this straight. You think San Jacinto Plaza is going to be a contributing factor to someone’s decision to visit El Paso? Yeh, right. I also have some alligators I will gladly sell to you.
The city shares so little in the revenue generated by the ballpark that the team’s win/loss record and the ticket sales and attendance will have minimal, if any, impact on the city’s ability to service the debt. In fact, one could argue that the city might actually be better off with low attendance because it would have reduced game day and event day operating costs which are not being reimbursed by Mountainstar.
Let’s also not forget that some in city government are recommending cuts to police and fire services when in reality baseball games, concerts, etc., at the ballpark are going to put increased demands on these departments. Guess who pays for those services or who will receive fewer services when resources are diverted to the ballpark. Ordinary citizens.
It seems you believe that construction of more hotels and the additional hotel capacity alone will result in more visitors to El Paso. Hhhmm.
Your point regarding attendance at UTEP football games and Diablo games fails to mention that most teams inflate attendance by including season ticket sales, not actual turnstile counts or fannies in seats. But again, attendance levels will have limited impact on the city’s servicing of the debt.
Your “it’s not out of the ordinary” attitude is precisely why special interests and city officials do this kind of stuff and get away with it. Your ready acceptance and justification of that concerns me more than some of your faulty logic. The great philanthropist Bob Jones must have thought paying bribes wasn’t out of the ordinary either. He destroyed a lot of lives and jobs in the process.
If you’re already giddily focused on saying “I told you so,” you’re getting a little ahead of yourself. You might be right, but don’t count your Chihuahuas before they’re born.
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RC, I don’t know if you’ve ever done any work on your house, but setting a budget and actually being right about it are two different things. Sure, you think replacing cabinets will cost X amount of money, but then the wife wants new pewter door pulls, then a new range hood, then a matching stainless steel refrigerator (sound like I have personal experience with this?). Your X budget is now XX or even XXX. But at the end, the kitchen looks pretty good.
I figured the first $50 million would change, but then I’ve been around this kind of work for a while. It was totally surprising when Mountainstar stepped up to cover the additional costs (up to $64 million). That made their team more responsible for controlling costs; otherwise, I believe they would have nickel-and-dimed us to death. The terms of that new deal are on the city website. Score one for city administration – but they’re still pretty far behind.
There are no provisions in the deal for the city to supply police and other emergency services outside of what the City provides at a UTEP football game – other than a terrorist event, I can’t believe that a “massive” diversion of resources will happen and that ordinary citizens will have to wait any longer than they do now for a policeman.
I make the assertion that increased attendance at sporting events is good only because it makes it more likely that those people go to bars and restaurants and, consequently, pay more sales tax, which is a viable way for the city to pay down the principal for the ballpark. The plan does not say specifically that sales tax revenue will be used to pay down the stadium bond – but I think the city intentionally held on to that option without committing to using it that way.
I’ve continually said that the stadium leasing deal in and of itself is not a good one. I don’t know why the city did not insist on sharing more revenue from concessions, stadium rental for non-baseball events, or any of the other things mentioned here. It would have made it easier, though not altogether better, for the public to swallow the deal. It should have been handled better – the city should take the first opportunity to renegotiate the deal, although Mountainstar is going to make sure there’s nothing ever happens to cause that.
Me and my faulty logic need a break – until tomorrow.
Carlos
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Reality check, Carlos. Mountainstar agreed to cover costs over $64 mil — not $50 mil. They did that only after Josh Hunt created yet another PR problem with a demands letter that was given to the media.
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Ugh – I swore I wouldn’t correct any more allegations that can be disproved by a simple look at the documents from the city website, but…
the $64 million was for total Ballpark budget, which includes costs for designing and constructing the ballpark as well as costs to demolish City Hall and the Insights Museum. It is not the amount financed. That would be $60.8 million.
I would encourage you to review the amended agreement that describes what the City did here. It is not nearly as deceptive as you might like.
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Carlos. I have a business. If I do a poor job estimating costs I go broke. I understand acceptable margins of error. This is not acceptable. It’s either fraud or stupidity or both.
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bingo tom.
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I’ve NEVER ran a business and I know a 40% overcost Is not a margin of error… unless you’re a council member who thinks an valuation increase fron $274M to $1B is “like 200% or a billionaire, the only classification for 40% is, as pointed out, fraud, stupidity or both. And personally I don’t see how you get to be a billionaire making stupid business deals…
You want to blow sunshine up our asses ang get us all to sing kumbaya with your impressive “research” you probably ought to remove the rose, no strike that… turd colored glasses.
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Tom, like my kitchen renovation example describes (rather poorly, I suppose), the majority of the increase is to install additional amenities at the ballpark, not because some nimrod screwed up the estimate. Had that been the reason for the increase, I would totally agree with you.
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dont compare your home kitchen to a commercial project. you dont do it every day and you are not an exert in the field. these people are paid to know what they are doing, period.
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Carlos, thank you for your analysis. I disagree about the financial viability of the stadium (Worst Case Scenario) and will stump for building a financial firewall between the city and the stadium. The indenture and the Big Lie that we were told – the HOT will pay for the stadium – needs to be put to the test. If the HOT doesn’t cover the 100% of the bond payments, then a partial default. The bond holders took a risk, too. It’s a mountain of lies with the CM and CFO leading the pack.
We should not allow the city to shortchange public services for AAA.
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Jerry, allowing a default, even a partial one, just to make bondholders feel some pain is like, on a smaller but nonetheless similarly calamitous scale, failing to increase the US debt limit. The bondholders might lose some cash, but the damage to our ability to function as a major American city, not to mention our credibility in the community of cities and, more importantly, among financing entities will be felt for decades. Like Congress, the city committed to paying its debts, regardless of how they’re perceived in the local community.
A default simply cannot/will not happen. HOT and sales tax revenues will have to cover it. There is no other solution.
However, a financial firewall is interesting – I have to admit that I really don’t know what that is. Can you enlighten?
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Dear Carlos…Thank you for your great blog article…and thank your wife too! It is nice to read another view that is not totally negative or with mucho bad words. We all try to make our world a little better than we found it.
Quality of life is good but what we really need is RAIN !.
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The loss and moving of all city departments and the biggest single financial giveaway by the city is a “Quality Of Life”?
This enhances no ones “Quality of Life” except the Fosters and Hunts and will never do business with any of them or let anyone in the family buy any property or homes from the Hunts or will I ever buy any more gas at Foster’s owned gas stations or from any business at Fountains Shopping.
No TRICKLE DOWN money from my family or any family I have connections with, to go to ANYTHING . . .Foster or Hunts.
They already burned that bridge.
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The elder Hunt who probably got talked into this and is now realizing that “THAT is not the way business is done.”
And
“THAT is not how people should be treated.”
and
“How can I get out?”
“. . . .the family reputation is gone. What have we done?”
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Thanks Haiduc – I have to admit, it’s hard not to give in to the hyperbole here. if we get the El Nino that people are talking about we’re in for a wet summer!
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Homeowner, I think you need a hug.
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you know, I’d REALLY like to know, exactly WHO or WHOM went to the store and bought the Baseball Caps that the City Council was wearing the day they decided to give away the City?
Who actually PAID for those baseball caps?
Does anyone here know?
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I can assure you, that other than family members visiting, El Paso will not be on someone vacation list. I have to wonder how you can believe that a triple a team, a new, but ordinary plaza and arena is going to make us a vacation spot.
But what is interesting, I mentioned a few days ago, that the city has approved plans to build an arena near the stadium. That caused a sudden codes compliance sweep of the downtown. Can’t build the arena if there’s no empty spaces. However, the plans are approved and being kept low key, concerned of public outrage. Now you mention an arena to be built downtown?
The downtown area is not being rebuilt to be a downtown area, but as an amusement park with parking garages everywhere. They need more space for the garages, so let’s crowd the local neighborhoods, so they get fed up and leave. It would have been cheaper and better to build a major amusement park on the outskirts.
Occasional sporting events is not going to create the revenue required to get the city out of this financial mess. El Paso is no longer a destination city. The only reason, it was before, is because it was easy access to Juarez for cheap goods and wild parties. Although Juarez is trying hard to make it attractive and safe,for tourists, if it ever recovers, it will be many years before tourists will return.
No offense, but I believe, WE will be saying “we told you so”. The city council that created this mess will be gone and we will be stuck with the debt, another Detroit city.
I live here so I hope this works, but realistically I don’t think so.
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Fingers, I seriously doubt your assertion that no one except people who used to live here come to El Paso. We don’t see the outside marketing effort because, why would we? We’re already here. I’ve seen it – it’s actually quite good.
It’s a fallacy that an arena coming caused a code compliance sweep downtown. The fact that those stories came out at about the same time doesn’t mean one caused the other. And besides, what kind of person defends the slumlords who make destitute people pay hundreds of dollars for one of their rooms?
One other thing – the Quality of Life bond calls for an arena in an area downtown, but nothing formal has been proposed, much less approved. It’s in the study phase. I, for one, would like to know how you know that they’ve have been approved.
As for public outrage – well, the vocal minority is outraged. Most people, I think, are just glad that an effort to make things better is being made. I wish more of them posted to blogs like these, but the onslaught of the kind of comments seen here (not to mention the narrow-mindedness some of those display) keeps the less-initiated away.
Myself, I don’t give a damn. I only hope your dim view of our city is not shared by any of the silent majority.
Carlos
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Those slum buildings didn’t happen overnight. It is difficult to believe that codes just heard about the conditions. The timing is very suspect. The people that LIVED in those apartments were angry about being thrown out. I never seen the inside, perhaps you visited or lived there, so are able to speak to the matter. Sure the place didn’t looked good in the newspaper. Again, the conditions didn’t happen overnight.
Sales pitch, is and always was, come to El Paso for cheap labor. They’re already here, really? Most of the military are assigned here, not volunteer. Call centers and fast food are not career enhancing. All that complaining about fair wages should focus on El Paso. And people wonder why our young and educated leave the area. Focus on real industry with real wages and benefits. People don’t to move to another city because of a triple A stadium or city park, they seek better jobs and pay.
Our education system is in chaos and the county wide corruption doesn’t help. People outside of El Paso are not deaf and dumb. Didn’t you hear, last year, about a prospective utep professor turning down the position because his wife heard about the school system.
Yes, we’ve heard about the “planning stages”, only to discover that that city council not only pre-approved, approved, and started the construction. The area already has problems with parking and traffic, now you want to add an arena. As for source of the information, there are people in the city that do care about us. But, the information is solid.
There’s only narrow mindedness or dim views when it doesn’t fit the local agenda. And that’s wrong with El Paso. Too many become complacent, discouraged or just don’t give a damn.
I live here and will stay here because El Paso is a great city and beautiful, it’s is just a few that make it bad for the rest. But, I will and having been doing my best to make the area better. I have and will continue to meet those that don’t want the gravy train overturned, but that’s tough. I love my city. I will continue to speak and encourage others.
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And the heavens above will open and mana– and much needed rain– will pour down on everyone, and all the good crazies of El Paso will celebrate their sudden prosperity by going to a baseball game, spending $45 a pop (Pops, mumsy and 2.2 kiddos), buy a few souvernirs and then hit all those cool bars and coffee shops… and pay for parking.
The Travel Channel will also feature San Jacinto Plaza as the hottest new getaway since the Eiffel Tower.
With all those rosy scenarios, based on nothing but my optimism and love for my city, its progressive politicians and their millionaire philanthropists/controlling interests, who needs to rely on silly things like feasibility studies to analyze the viability of a project based on realistic scenarios and data… and heck, who but naysayers pay attention to factual data like layoffs, airport traffic, foreclosure rates, housing starts, per capita income, unemployment, etc., etc. etc.
Heck, those people at Fitch must be naysaying crazies when they warn about “above-average debt service tax rate, slower tax base growth in the near term, and the area’s below-average socio-economic characteristics.” as well as looming police and fire pension obligations.
Interestingly, Fitch, in rating the ballpork bonds a notch lower than the city, also figured in recent growth at Ft. Bliss and an emerging healthcare sector. That was before the US Dept. of Defense announced significant future cuts in defense spending and we knew of the problems our healthcare sector (and the impact of Obamacare).
Also makes you wonder why the city had to up the rate offering to try and sell the COs. But who cares about pesky facts and data. We can all bank on hope and good cheer.
Let’s play ball!
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It’s OK. Joyce Wilson called the people at Fitch “a bunch of crazies” in an email. Problem solved.
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Notice how Carlos of Shilling in the City does not respond to facts and data.
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Mock – Carlos of Shilling in the City (cute) is enjoying his weekend, at least til now.
As for responding to facts and data – I can’t challenge the veracity of most of what you’re saying, once you wade through the fluff. But if our response to challenging economic times is to sit in the rain and scream about getting wet, we deserve everything we get. It can be argued that that’s been the response til now – and made our challenging situation worse.
In my view, it is not appropriate to me for us as a City to sit and do nothing. Whether the things the City is doing now are the answer, the jury is out and will be for a while.
Since I’m Shilling for the City, according to you, I suppose that makes you Shilling for Francis – which totally diminishes the respect I had for your viewpoints. But it’s amusing at least.
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carlos, you mean the extortion vote ? the vote where if we didnt let the hotel tax pay for it(which it wont even pay the interest) then it would have to come from property tax ? you mean that vote ? where was the vote on to tear down city hall, purchase and remodel 3 buildings for around 100 mill ? oh, thats right , when cook(cook said) told josh hunt that if he thought the voters in el paso would pass tearing hall down city hall to put the stadium that he was crazy. cook said hunt responded “you let us worry about that”. i have always said the finance has looked bad from day one. bonds being bought much higher than wilson wanted just makes it worse. i own buildings and i would never finance a building where i could only pay the interest for 10 years. its like leasing a car. you still owe the total(or more than its worth) after 10 years. cutting city services and taking sales taxes and any other fees that were being used to pay for other city services will now go towards the ballpark. its taking tax money out of your left pocket and putting it in the right pocket to pay paul. problem is the left pocket will have to be refilled due to the drain of the right. that will have to come from property tax. joe wardy and our new mayor have one thing in common. before they will spend money on something like this they will ask the people to vote on it. thus, the 74-26 ass whipping of steve ortega even after foster and hunt poured dollars into steve’s campaign. fook us once, shame on you, fook us twice, shame on me.
p.s. our illustrious city manager never even looked at albuquerque’s contract or if she did then she didnt care. even a moron like acosta saw albuquerque’s deal was much better than ours and made council change a few things. a strong mayor got them a better deal than our overpaid harvard grad city manager. you watch. it looked bad enough when foster bought jordon contruction. can you imagine how bad it would look if he hired wilson after she leaves ?
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Carlos, bottom line is your research is both optimistic and, quite frankly, questionable and your arguments are not supported by even your optimism. Your counter-argument regarding the $60M vs. $64M is technically right (actually i thought it was $57/58M) but then again what funds did the cost of design, etc come from? And what impact did that have on the city cutting services due to loss of sales tax revenue?
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epkam,
I suppose it’s possible for my research to be both optimistic and questionable. By extension, that implies that my objective here is to convince you of something. It is not – my aim here is to attempt to dispel myth and misconception.
Toward that end, my response to your allegation is…
all you need to know is on the city website.
I’m all for providing information – so here it is:
Click to access 06181310A-1.pdf
Happy reading.
It was part of the presentation made to Council in June last summer. Funds for ballpark design are included in the financing; hence, neither city services nor sales tax revenue nor property taxes nor the inspections at the Gateway Hotel are affected.
I would love to be making all of this up. It would at least be amusing.
Carlos
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Why would you consider a June 2013 presentation as fact? Gather ALL the information, put it in a timeline that shows how the “facts” have changed. If we have learned anything, it is that the reality of the how things have turned out, including both the cost and the sources of funds to pay for various ballpark-related (and Foster-owned downtown real estate value enhancement) capital projects, is not consistent with how things were presented when the ballpark was being sold to the public. In fact, city management and their special interest handlers are still moving dollars around in a sophisticated but obvious shell game designed to enable them to continue to spend even more money on the ballpark-related projects, while making it look as though they capped spending at approximately $64 mil. Some might write it off as a series of errors. Others might consider it deception while others might call it fraud. Some simply accept it as “not out of the ordinary”.
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Because it’s on the city’s website it MUST be true? That is pretzel logic at it’s best… your “objective is not to convince us, merely dispel myth and misconceptions”… using city published data? No government EVER lied to it’s people, especially the El Paso downtown clowns!
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epkam, I challenge you to present anything that backs up whatever you allege. I did – the ball’s in your court. While we’re at it, let’s make the stuff you bring come from a reputable source and not from some other idiot’s blog.
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Besides, if information off the city website is good for the esteemed owner of this site, it’s good enough for me.
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The discussion was civil to start; then the fangs came out. An overview:
1. I wear turd-colored glasses.
2. I blow sunshine either around the room or up some people’s “biblical beasts of burden.”
3. I count my Chihuahuas before they’re born (I like that one).
4. I have faulty logic.
5. A nice person has offered to sell me alligators.
6. I would like all of us to sing kumbaya (sic).
7. My world must be GREAT because I’m not getting screwed (you’d think the opposite would be true).
8. My research is impressive, although that was more an accusation than a compliment.
Gentlemen, or ladies, as the case may be, I don’t take any of this personally – anymore. It was pointed out to me that a lot of the comments may sound personal but they’re not. I suppose as long as we all hide behind our cloaks of anonymity, such as it is, all’s fair.
I’d like to debate with each of you who disagree with me – but we’d just be throwing the same points back and forth at each other. I get it – you don’t like the ballpark, the financing, that Foster owns Jordan (that was new one), that parking, which started this entire discussion for me, is too high…I get it.
The city took a good-sized risk building this stadium. It’s not the “Detroit bankruptcy” kind of risk, bur risky enough. Regardless, the facts of the matter stand:1) the ballpark is here, 2) the financing we will have to live with, and pay for, 3) property taxes will NOT be used to make interest payments, and 4) real, professional baseball is here for at least the foreseeable future.
I submit that the fine people who post here must stand up out in the real world for the issues you believe in. If you organize, you will be a formidable voting bloc. Then, maybe you can create the utopia you seem to want very badly.
It was fun – on to the next issue.
Carlos.
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A gentleman, but not a scholar.
Yes, true. We are left with the bills, but doesn’t mean we have to like it. So if someone socks you in the mouth and you lose a tooth, we should think, oh great, one less tooth to worry about.
We don’t expect a utopia, but neither do we relish being sharecroppers.
Ok, got it out. I’m done.
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Ha – touche.
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Good to see you have thick skin and good attitude.
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Carlos, my man. I’m impressed. You have a real talent for stirring up #$&@. You’re always welcome here. You know how to liven up a room. Okay, you pick the next issue and submit it to Brutus.
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many of us were the voting block on the side of leeser arse whipping of ortega 74-26.
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This is my final comment on the “Meteoric Rates” string of comments and possibly altogether.
Many of the various comments and thoughts people like myself have expressed on this blog over the past year, while presented in the context of ballpark discussions, have not been solely about the economic viability of the stadium or the city’s ability to pay or not pay for the ballpark. I think most of us just don’t like being railroaded by special interests. We also don’t like that the process and the manner in which it was handled was carefully designed to shut out individual taxpayers, who are footing the bill for a couple of arrogant billionaires who masquerade as conservatives and philanthropists, while taking (a polite word) tax dollars to fund their for-profit enterprise on lopsided terms that show just how one-sided the deal is. The terms of this deal are an insult to legitimate public/private partnerships.
The ballpark per se, of course, is not the problem. It is simply tangible, symptomatic evidence of much bigger and much deeper problems, including ethical lapses (if not outright corruption), misplaced priorities, corporate welfare, and governmental control by special interests even at the local level. Unfortunately, the deception and misdeeds continue, as I think Brutus will soon point out.
If the Chihuahuas and the ballpark are wildly successful, we’ll never hear the end of how Foster and Hunt are great visionaries and risk-taking capitalists. They and those who wish to endear themselves to these families, along with the media sycophants, will lead the chorus. Me? I will enjoy resurrecting a hotly contested quote by a very polarizing figure, one with whom I frequently take exception, but must quote given the political party affiliation of Foster and Hunt. I’m going to simply remind everyone that Foster and Hunt “didn’t build that”. We, the taxpayers, did, just as taxpayers foot the bill on so many of the government contracts that have made the Hunt family so wealthy, enabling Woody Hunt to “pay to play” to influence those in politics and government.
As Fingers alluded to, welcome to the plantation. Just make sure you don’t forget your place.
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Well stated… my humorous sophomoric comments aside, I base my BELIEFS on what I read or see from various sources. I don’t always agree with what I learn and take the opportunity to voice my opinion vocally, in writing or at the voting booth…
Sometimes my BELIEFS are by extension of facts using common sense… the Zaragosa/Montwood ramps headed SOUTH for example… while it was prockaimed it would alleviate congestion that has proven to be false… and one would have to wonder why it doesn’t head NORTH towards those pesky job creators at Ft Bliss? And why do the ramps headed SOUTH conveniently connect to the widely successful Express Toll Lane that just happens to end where? DOWNTOWN El Paso, Home of the El Paso Chihuahuas and the Southwest University baseball stadium… coincidence? I think not… but I’m a crazy so I have a crazy way of looking at things realistically! But… IT’S ALL GOOD!
Got to go… got friends flying into town to go see San Jacinto Plaza! They wanted to visit the Insights Museum but alas I can’t figure out where it was relocated to!
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Carlos. Quality of life sucks around here? For who? It sucks if you’re poor. We could probably help there. I’d like to see basic infrastructure issues addressed. Things like streets, sewer, water, police and, you get the picture. But other than that life is pretty good. In fact I moved here 30 years ago FOR the quality of life. So far I haven’t been disappointed. I am disappointed that we took on an enormous amount of debt in the middle of a shaky economy. I am disappointed that we’re still losing jobs. So call me crazy.
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QoL sucks concerning rising tax rates and reduced services… promising a Children’s Museum when one existed sucks… building a baseball stadium when one existed sucks… relocating city offices when a city hall existed sucks… traffic on Montana sucks (this is a state road BUT what is the city/county doing to prioitize it with the Camino Real Regional Mobility Authority? If only there were some way to extend Montana to connect with the baseball stadium! BTW, according the CRRMA 2008 review and recommendations Montana recieved the Rapid Transit Corridor project… SERIOUSLY? They’re ADDING busses onto an already OVER congested roadway and have the balls to call it a RAPID TRANSIT CORRIDOR????
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Tom, quality of life sucks for anyone who’s poor anywhere. But in El Paso, it’s not because basic infrastructure is deficient. One could argue that the reason we’ve moved onto quality of life issues is because infrastructure has at least been given the attention it used to lack. It’s not perfect, of course, but it’s good. The state has made major investments in the highways across town; the city’s pavement maintenance program has made the pothole problem here almost nonexistent. Police budgets are almost always the city department that gets cut the least, if it gets cut at all. Water is a non-issue because of advances in reverse osmosis and the almost draconian way the Water Utility imposes water restrictions.
You’ve been here 30 years, I suspect you’d know it was much worse.
As for taking on debt now, rather than when things get better, I suppose we can debate til the cows come home. I’m of the opinion that the time to make moves is when we’re at the bottom of the market. If the city can afford these things, and the assumptions for revenue growth and inflation are modest, as they are here, then it’s not a huge risk to pull the trigger now.
There are no absolutes – it is entirely possible that this will not work out the way proponents believe. But it is a worthy risk, hyperbole notwithstanding.
Carlos
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