Rich Wright is running for District 8 on a platform calling for cutting spending and lowering taxes. He understands that building an “Arena” would be a financial trap. See his latest blog post on the topic.
On September 12 we learned that the City now wants to build a smaller structure, on the order of 8,000-10,000 seats. City Architect Daniela Quesada presented to City Council the best comp she could find: the PPL Center in Allentown, Pennsylvania, built in 2014 with a seating capacity of 8,500 at a cost of $177 million. There is zero doubt that such a venue today would cost well over double, potentially more than $400 million.
The City has only $153 million left of the Quality of Life Bond money, of which $128 million have not yet been issued as debt.
How would the City come up with $250+ million extra?
They cannot issue any more certificates of obligation, because a new state law makes possible the same kind of petition that that the Libre Initiative used to kill the proposed $346 million UMC debt issuance. Make no mistake about it. The citizens of El Paso will not tolerate any more COs from our local taxing entities!
The City cannot put a new general obligation bond to a vote because it would obviously lose.
That leaves a public-private partnership, which would be very difficult to structure legally, and historically our Oligarchs don’t like to risk their own capital on such things when the taxpayers can be made to foot the bill.
Case and point: The Ballpark loses around $3.5 million each year that has to be covered by the Hotel Occupancy Tax and General Fund. There will be no HOT funds for a future Arena, so how much will the City be prepared to pony up from the General Fund to stem the financial hemorrhaging from this massive boondoggle?
Given our absurdly high tax burden, the City should seriously consider not building the Arena at all; and if they must spend the $153 million remaining from the QOL Bond, they should embrace the Mayor’s plan and renovate the Convention Center and Abraham Chavez Theater.
Enjoy your day.