MountainStar Sports Group to commit $12.1 million toward El Paso ballpark
Updated On: Jan 15 2014 09:58:55 PM CST
A couple of weeks after members of City Council chastised the city manager and project engineers for asking for more money for the Downtown ballpark, MountainStar Sports Group announced they are prepared to commit $12.1 million in additional revenues to fund the ballpark construction. City officials said the new formula will make money for the city.
MountainStar Sports Group is the ownership group that will be relocating the Triple-A Tucson Padres to El Paso. The ballpark is being built on the site of the old City Hall with the goal of being ready for the 2014 season.
Mayor John Cook has placed the item and related items on the June 18 City Council agenda to formalize the agreement. He said City Manager Joyce Wilson and city staff worked with MountainStar to come up with an agreement, after the direction of city council to find ways to fund the stadium without extending the city's financial commitment.
City Council, who acts as a corporation when voting on ballpark issues, is going to decide on Tuesday whether to increase the amount of money they borrow for the ballpark from $52.8 million to $60.8 million. This is how the city will pay for that debt: it says $48.7 million is going to come from the hotel occupancy tax visitors pay when they stay in El Paso hotels and $12.1 million would be paid by MountainStar Sports Group. City officials said zero dollars will come from property tax-payers.
The $12.1 million MountainStar has committed to contributing would be secured by doubling their lease payments to the city to occupy the stadium, from $200,000 to $400,000 a year.
They've also agreed to extend the term of MountainStar's lease and non-relocation agreement from 25 to 30 years.
According to the City, this plan will make money because now any sales tax - made at the ballpark - isn't needed to pay for it - so it would go into the city's general fund - which is the city's big pot of money to run the city.
"People are saying this is going to be an increased burden on the local taxpayer. Actually, it's gong to decrease the burden on the taxpayer because we're going to have additional revenues above and beyond," said Mayor John Cook.
City officials said that over the 30-year lease of the ballpark, they estimate an excess in revenue from those sales taxes, ticket surcharges and even rent from MountainStar - that will total $27-million.
All of that, city officials said would go to the city's general fund. Mountain Star's lease increases by 10% every five years. "in the later years of the lease, you're talking about an annual rent in the 700,000s plus range," said Josh Hunt, of MountainStar.
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