Yesterday we reported that Betsy Keller, the County Administrator, suggested to the Commissioners Court that they should consider contributing to the cost of building the City’s planned arena.
This made us curious, so we made a series of phone calls to some of our trusted contacts.
We learned that Chris Cummings, Executive Vice President at CIC Limited, Inc., is collaborating with the El Paso Community Foundation in an effort to convince the City and County to build the arena at the ASARCO site.
We are told by three independent sources that the City would be expected to contribute at least $150 million, the County somewhere between $150 million and $250 million, and the El Paso Community Foundation somewhere between $20 million and $100 million.
The aim would be to raise at least $400 million, and hopefully $500 million, so that a large-scale sports arena could be built, convertible for concerts and special events.
Now that Max Grossman’s litigation is finished and Duranguito will be spared, the City is exploring an alternative downtown site, with plans to build an arena without exceeding the $180 million budget that was allocated in 2016.
The ASARCO site consists of 453 acres that are subdivided into seven parcels. We are told that Parcel 1, which is 248 acres and located on the east side of Interstate 10, would be the favored location.
According to the Central Appraisal District, Parcel 1 (property ID 292737) has an appraised value of $2,818,637, but according to a “Pricing Overview” we obtained from one of our sources, the plan would be to sell it for $13,500,000.
Roberto Puga is the Trustee of the Asarco Texas Custodial Trust that owns the parcel. Over $70 million were spent to remediate the land after the smokestacks were demolished in 2013. The Trust tried and failed to sell it to UTEP and has been seeking a buyer ever since.
The proposal is very expensive and would put the taxpayers on the hook for up to $220 million more bond debt than they were originally told, but here are some even bigger problems:
1. The 2012 quality of life bond ordinance stipulates that the arena must be located in downtown, so the City cannot spend bond money for an arena at the ASARCO site.
2. The County may only bond a maximum of $500 million dollars over the next several years and cannot afford to spend $150-250 million to build an arena. If they proceeded, they would have to use certificates of obligation, which would would be political suicide; and if they put a general obligation bond for such a purpose to a vote, it would go down in flames by a wide margin.
3. There are strict federal and state regulations that would make it difficult to excavate foundations for a gigantic building at a site contaminated with lead, arsenic, cadmium, chromium, copper, iron, selenium, and zinc. Imagine the EPA nightmare!
Clearly, there is a group of elite investors in El Paso who want the public to pay for an arena large enough to accommodate a sports franchise, and the smaller arena the City is planning just won’t do.
How else can one explain this boondoggle of a proposal?
If such an arena would be so profitable, the investors should put up their own funds and assume 100% of the capital risk without asking the public to contribute a nine-figure subsidy.
That is the American way.