Dear Friends and Media:
On Page 8A of today’s El Paso Inc, David Crowder states that “the multipurpose center, or the arena as it’s often called, is regarded by major Downtown property owners and business as a much-needed project to enliven Downtown and attract out-of-town visitors to major events. But similar centers are costing over $400 million in other cities…”
In 2012, the City earmarked only $180 million for the 15,000-seat structure, or $12,000 per seat.
Two years ago, Mayor Margo admitted that the project would cost over $250 million, or $16,667 per seat.
Today we learn that the price tag is actually more than $400 million, or $26,667 per seat.
Some months ago I wrote a guest column for the El Paso Times in which I conservatively estimated that the cost would exceed $450 million. I based that figure on the cost per seat of the three most recently built multipurpose basketball arenas in the United States:
Dickies Arena, Fort Worth, capacity 14,000
Original estimated cost was $450 million. In 2017 the price increased by $90 million to $540 million ($38,571 per seat)
UT-Austin, replacement for Erwin Center, capacity 10,000 for basketball (15,000 for concerts)
2018 estimate $338 million ($33,800 per seat)
Fiserv Forum, Milwaukee, capacity 17,000
Built in 2016-2018 at cost of $547 million ($32,176 per seat) in 2018 dollars
If you adjust the cost per seat of these comps for inflation, the cost of our “Arena” will exceed a half billion dollars.
There is no question about it.
City Manager Tommy Gonzalez knows it, and so does City CFO Robert Cortinas.
Mayor Leeser also knows it, and that is one of the chief reasons why he defeated Margo in the general election last month by such a huge margin.
Until recently there was only one anti-arena rep on City Council. Now there are at least three.
Notice how none of the big developers are stepping in to put up their own capital to help pay for this epic boondoggle. Could that be because the other arena, the Ballpark, which cost more than triple the original estimate, is drowning in debt at taxpayer expense?
Even if you do not care about the thirteen National-Register-eligible properties in the “Arena Footprint” and the dozens of people who were forced from their neighborhood by the City, perhaps you might worry about a public project that will raise your taxes even higher and take our City even closer to Chapter 9 bankruptcy.
Enjoy your weekend.
Max Grossman, PhD