Texas businessman Paul Foster's company is getting $1.34 million in county tax rebates to help pay for the renovation of the historic Plaza Hotel building in Downtown El Paso and construction of an adjacent parking garage.
The El Paso County Commissioners Court approved the tax rebates Monday -- 10 months after the El Paso City Council approved $23.1 million in city and state tax rebates, city grants, and city property tax abatements over 10 years for the Plaza project.
The project is expected to exceed the $78 million that's required under the city's incentives package, said William Kell, vice president of Franklin Mountain Management, a Foster company that manages many of his properties and other business ventures.
Doing a Downtown renovation project is "extremely expensive and uneconomical," and financial help is needed from the city, county, state and federal governments to help defray costs, Kell said. Historical tax credits come from the state and federal governments. State sales and hotel tax rebates also are being provided for the project.
Foster is a billionaire who made much of his money from Western Refining, the El Paso oil refiner he founded and sold for $5.8 billion in June 2017. Western's three refineries, including one in El Paso, are now owned by Ohio's Marathon Petroleum Corp. after a second sale took place this year.
"It's important that (Foster's company) is refurbishing one of our historic buildings. It's not cheap," El Paso County Judge Ruben Vogt said. "The hotel project will help transform the Downtown landscape" and help attract more meetings and conventions to El Paso.
The Commissioners Court was first approached about providing tax incentives for the project in September 2017, before construction began on the hotel, but it took time to work out the details of the complex project, Vogt said.
The county's $899,584 in property tax rebates are over 15 years, and its $442,053 in hotel tax rebates is over 10 years if all requirements are met.
The long-vacant Plaza Hotel building is being remade into a 131-room, upscale boutique hotel with an adjacent 540-car parking garage.
The parking garage is under construction on two vacant lots. One lot was a parking lot, and the other one was where two buildings were demolished several years ago after they were destroyed by a fire. It is located on San Antonio Avenue and South El Paso Street.
The project is expected to be completed and opened in August, Kell said.
The 19-story, 89-year-old hotel building is located at the corner of Mills Avenue and Oregon Street in the heart of Downtown, and across the street from the Mills office building, which Foster also renovated several years ago.
The Plaza project is eligible for property and hotel tax rebates under the county's capital-intensive projects program, which is for projects of $50 million to $149 million, Vogt said.
The Commissioners Court declined to provide county tax breaks for the $70 million renovation of the Hotel Paso del Norte, which is near the Plaza Hotel. The City Council previously agreed to provide up to $32.6 million in city and state grants and tax abatement to help pay for the renovation of the hotel.
Vogt said he couldn't talk about why the Commissioners Court didn't approve Hotel Paso del Norte's request, which officials with the Meyers Group -- the Miami-based development company that owns the hotel building -- have said is needed to satisfactorily complete the project.
But County Commissioner Vince Perez in January told the El Paso Times that the Hotel Paso del Norte incentives package was not approved by the Commissioners Court because the Meyers Group was not able to justify the need for the incentives.
Construction of the Hotel Paso del Norte has been on hold since mid-October after the Meyers Group fired the renovation project's general contractor because it was not going to meet the completion deadline, company CEO and Chairman Stuart Meyers told the El Paso Times in early November. Company officials have yet to announce whether a new contractor has been found.
