El Paso Seeks Court OK For Stadium Bond Plan

DALLAS – El Paso, Texas, will file a bond validation lawsuit in state district court in response to efforts to halt construction of a bond-financed minor league baseball stadium in downtown.

The west Texas city is seeking an expedited declaratory judgment giving the go-ahead to its plans to issue $50.4 million of bonds supported by its hotel occupancy tax to build the 9,000-seat stadium on the site now occupied by El Paso City Hall.

Paul Braden of Fulbright & Jaworski LLP, the city’s bond counsel, said a favorable ruling by a court in Austin would put an end to petitions and lawsuits trying to stop the city from using bond proceeds for the demolition of City Hall and construction of the stadium.

“State law provides a single, convenient forum under which all the issues relating to these bonds can be addressed by a judge,” Braden told the council. “And it can be addressed in an expedited manner.”

The suit could be filed as early as next week in a Travis County state court, he said, with a trial in February.

The resolution authorizing the lawsuit said El Paso wants “to proceed with confidence that its proposed bond issuance, contracts and actions taken or planned in support of the project are lawful, valid, and enforceable.”

City Attorney Sylvia Borunda Firth said the lawsuit is needed because concerns have been raised over "certain technical aspects of the ballpark financing, including statutory and constitutional law interpretations."

A petition was filed in late December seeking a March election on the Council’s decision in September to raze City Hall, after three previous petition attempts were rejected by the city or failed to obtain enough valid signatures. A court hearing on a request for a permanent injunction preventing the demolition is set for Feb. 22.

"One court proceeding could end all these issues and allow the city to comfortably continue with its plans to issue the necessary bonds," Braden said. “It will give the council comfort that the bond issue can proceed under accordance with state law.”

Braden said the suit will contend state law and El Paso’s city charter do not allow petition initiatives on issues that have been authorized at an election. El Paso voters in November approved an increase in the city’s hotel tax to support the stadium bonds.

The bonds would be issued by the City of El Paso Downtown Development Corp., which the council created in December to finance and build the stadium. The debt will be issued as special obligation bonds supported by annual city appropriations to the corporation from the hotel tax collections and its share of stadium revenues.

The stadium will be home to what are now the Tucson Padres of the Class AAA Pacific Coast League. The team will be renamed before it moves to El Paso after the 2013 season.

The council also awarded a $40 million contract for construction of the stadium, which is to be ready in April 2014.

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