DALLAS – El Paso City Council gave the go-ahead Tuesday to a $50 million plan to build a bond-financed ballpark that will replace City Hall in downtown El Paso, Texas.

City Manager Joyce Wilson was given authority to sign a draft agreement with a development group that said it would purchase a Class AAA minor league baseball team and keep it at the stadium for 25 years.

The resolutions approved by the council Tuesday outline a plan to raze City Hall in early 2013 and build a 9,000-seat stadium on the site. Wilson is to determine whether the city should build a City Hall or purchase a building that can be renovated.

The new ballpark is to be ready in 2014 in time for the opening day of the 2014 minor league season in April.

The preliminary financial plan includes $35 million of 25-year tax-exempt bonds and $15 million of taxable debt.

The bonds will be supported by a 2% increase in the city’s hotel occupancy tax if voters approve the increase.

The 2% increase is expected to generate $2.4 million a year. The additional tax would bring El Paso’s hotel tax to 17.5%, the highest rate in Texas. The total includes the state’s 6% tax, the city’s current 7%, and El Paso County’s 2.5%

Deputy City Manager William Studer said the tax would increase the average hotel bill by $1.40 a day due to the state-low average room rate in El Paso.

“This is the best location for the stadium,” Studer said. “There are only a few downtown sites available, and this is the best one with easy access from Interstate 10 and Mexico.”

If the tax increase fails, Plan B calls for the city to support the bonds with lease revenue bonds to be issued by a municipal property corporation.

The team will pay an annual rent of $200,000 over the 25-year span covered by the agreement. After the first two years, $150,000 will be put into a capital repairs reserve for maintenance and improvements.

The council split over a non-compete clause that will force the El Paso Diablos to leave city-owned Cohen Stadium when the lease expires in April 2016.

The Diablos are not affiliated with a Major League Baseball team and competes in an unclassified independent league. The team was purchased by the Tigua Tribe for $500,000 in 2011.

Representatives of the tribe said it has financed $750,000 million of upgrades to Cohen Stadium since they acquired the team, and asked the council to drop the non-compete clause.

Woody Hunt, a local businessman  who along with Paul Foster heads the group seeking to bring a Class AAA team to El Paso, said taking the non-compete clause out of the agreement would kill the deal.

Hunt said negotiations are under way to purchase a team now playing in the Pacific Coast League. He said other owners in the league would be unlikely to approve the sale to the El Paso group if the city continues to allow the Diablos to occupy Cohen Stadium.

“The non-compete clause is very important,” he said.

Councilman Eddie Holguin apologized to tribal representatives.

“You’ve been abused by the federal government and you’ve been abused by the state government,” he said. “Now I guess it is the city government’s turn.”

Chief Financial Officer Carmen Arrieta-Candelaria said it will cost the city $2 million to raze city hall and $3 million to move workers into rented space. She said the city expects to pay $3 million a year in rent until a new City Hall can be built or renovated.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.