Dear Media,
Of all the stories you missed in the last five years, by far most significant was the Great Wolf Lodge land swap debacle.
Most of you reported (uncritically) that the City of El Paso agreed to exchange 2,313 acres of pristine public land in northeast El Paso for 44 acres on the west side owned by Paul Foster’s FSW Investments LP, and that the two lots were of equivalent value: $18.6 million.
The plan was for the City to then lease its 44 acres to Great Wolf Lodge for a measly $1,000/year in spite of Section 3.18 of our City Charter: “Any ordinance providing for the conveyance, lease, or grant of a franchise regarding the property of the City shall provide for payment to the City of a reasonable fee as consideration for that conveyance, lease, or franchise.”
On October 28, 2019 our City Council voted 7-1 to provide Great Wolf Lodge with huge incentives at taxpayer expense to build its waterpark resort. The City agreed to provide a 100% property tax rebate and a 100% city sales tax rebate for 15 years, a 50% hotel occupancy tax rebate for 15 years, $520,000 in TIRZ-funded infrastructure improvements, and a $5M development grant from El Paso Water.
Among the contractual provisions was this winner: If the State failed to provide $40 million in tax incentives for the project, El Pasoans would pay for it themselves through the franchise fee on their electric bills over a ten-year period.
On March 17, 2020 the City Council voted to expand the incentives for Tax Increment Reinvestment Zone 13 (TIRZ 13), which encompasses Paul Foster’s 2,313 acres, giving him and his co-investors a 75% property tax rebate for 50 years on anything they build within that area!
DID KARLA NIEMAN LIE TO CITY COUNCIL?
On November 13, 2018 under Agenda item 18.1, Rep. Cassandra Hernandez asked City Attorney Karla Nieman point blank whether the 2,313-acre land swap with Paul Foster would proceed if Great Wolf Lodge pulled out of the deal to build a resort in West El Paso.
Nieman responded that the land swap could not proceed and that the contract with the City would prevent it from proceeding.
On April 10, 2020, it was announced that Great Wolf Lodge pulled out of the deal completely, yet the land swap went forward anyway and FSW got its 2,313 acres and the incentive package that went along with it!
On April 14, 2020 Jud Burgess and I separately appeared before City Council and publicly questioned why the Great Wolf Lodge land swap proceeded in spite of Karla Nieman’s promise.
Nieman defended herself with a flimsy statement that she read out loud, and I have attached the audio to this email.
Amazingly, she claimed that “At no point did either staff or myself say that the deal to terminate the agreement with FSW was indefinite or that it would survive the closing of the transaction with FSW.”
Did Karla Nieman lie to City Council and cost El Paso taxpayers hundreds of millions of dollars in lost tax revenue, which will result in upward pressure on the City property tax?
According to Section 14.A (6)(e) of her contract, Karla Nieman may be fired for “knowing misrepresentation of material facts to the City or other City officials in the conduct of the City’s business.”
The statute of limitations for breach of contract is four years.