Every time the City of El Paso manages a large capital improvement project, it ends up costing between double and triple its projected cost, and the taxpayers always lose.
On November 22, 2022 under agenda item 34, the previous City Council voted to hire Stantec Consulting Services at a cost of $1,321,785 to conduct a feasibility study for the construction of a downtown deck plaza over Interstate 10. The tab was picked up by a federal grant and private funds.
The study was completed several months ago and Tracy Yellen, CEO of the Paso del Norte Community Foundation and chief proponent of the project, has been telling our City and County governments that a five-block, 8.5-acre deck plaza will cost $207 million. Her figure has been repeated with numbing regularity by our feckless media.
After watching the Ballpark, trolleys, and signature Quality of Life Bond projects blow way past their budgets, we decided to investigate the cost of this project ourselves.
We began by filing an open records request with the City of El Paso requesting all documentation of the estimated deck plaza cost. The City initially responded by producing a PowerPoint affirming Yellen’s $207 million figure, but we refused to believe them and pushed harder, making phone calls and writing emails.
The City eventually sent us Stantec’s spreadsheet, which projected a cost of more than $412 million in 2027 dollars.
We then asked the City to produce any presentations associated with this spreadsheet and they finally sent us two different PowerPoints from June 2024 created by Joaquin Rodriguez, Director of Grant-Funded Programs in the Capital Improvements Department. He showed one to the Mayor and the other to the Interim City Manager and his staff.
The bottom line is that Mayor Oscar Leeser and Interim City Manager Cary Westin were told the deck plaza would cost $412 million, but City Council, the County Commissioners Court, media, and public were told it would cost $207 million. (see attachment below)
This past Thursday we spoke to Tracy Yellen to ask for clarification. She claimed that they reduced the price tag to $207 million by eliminating PPPs (public-private partnerships), even though the current renderings seem no different from the original renderings.
Last night she was confronted on ABC-7 XTRA about the potential for costs to spiral out of control and she was evasive and, at times, incoherent.
THE COUNTY WILL “SPONSOR” THE DECK PLAZA BUT TXDOT WILL OWN IT
By the end of next fiscal quarter, the County Commissioners Court will have authorized more than $894 million in general obligation bonds and certificates of obligation. If the voters approve all the bonds and the County issues its $174 million CO as expected, the taxpayers will be obliged to pay more than $1.5 billion in new principal and interest over the next three decades.
Moreover, the County will not be able to issue any new bonds until at least 2030 without risking a downgrade from the three credit-rating agencies: Fitch, Moody’s, and Standard & Poor’s. A downgrade would result in a financial implosion that would certainly result in a massive tax increase.
Nevertheless, the County is planning to serve as “sponsor” for the deck plaza, even though TxDOT will be the owner. The matter was discussed on September 23, agenda item 7B.
Judge Samaniego and Commissioners Leon, Stout, and Coronado have less financial acumen than your average third-grader. What they are doing is so irresponsible and beyond the pale that all four of them should resign for their sheer incompetence.
As always, Commissioner Iliana Holguin is the lone voice of common sense.
Let us be clear. As sponsor, the County will not only be responsible for any cost overruns on the deck plaza but also for annual maintenance costs. Yellen went on the record and confirmed this for us this past Thursday, but added that she hopes other sources of revenue can be identified.
So if the project ends up costing $412 million instead of $207 million, the County will be on the hook for well over $200 million with no source of revenue to pay for it. They would be forced to issue a CO, triggering a credit rating downgrade and significantly higher borrowing rates.
The Klyde Warren deck plaza in Dallas is only three blocks long and costs $5 million per year to maintain and operate. Ours will be five blocks and will have a lot more stuff on top, meaning that M&O will probably be at least double. The County does not have the funds to cover that, nor do TIRZ 5 and Yellen’s Downtown Deck Plaza Foundation.
The fact is that the Dallas-Fort Worth metroplex has a GDP of $700 billion and is home to numerous large corporations while El Paso has a GDP of only $45 billion and is the headquarters for only three publicly traded companies. El Paso is not Dallas!
And then there is the question of what happens if TxDOT decides to demolish part or all of the deck plaza in the future, to fix differential settlement or effect repairs on the structural supports. Well, they could demolish whatever they please whenever they wish and the County and any co-developers would lose any assets standing above.
YELLEN WANTS TO CREATE A NEW TIRZ AROUND THE DECK PLAZA
Desperate to find funds to build and operate the Deck Plaza, Yellen told the County Commissioners Court that she wants to see a new TIRZ (tax increment reinvestment zone) created on either side of the freeway in our downtown.
But there are two problems with that: (1) The County has no authority to create a TIRZ, only the City does; and (2) the City just eliminated TRZ 2 along the I-10 corridor because it was a money loser for the taxpayers!
Creating a TIRZ would capture property tax revenue that would otherwise go to the City and County coffers and could be leveraged for a large bond to cover cost overruns on the deck plaza, but the Mayor and City Council will rightfully reject this idea because it amounts to a public subsidy,
We are not against the construction of a deck plaza in downtown El Paso as long as no historic buildings are demolished for unnecessary frontage roads and we don’t have to pay for it.
As with the arena, if the big developers and their political lackeys want a deck plaza so badly, they should pay for it themselves and then they can build a soccer stadium there for the Locomotives, a unicorn petting zoo, and a ten-story statue of Amigo Man that glows in the dark.