DALLAS — El Paso, Texas, will use proceeds from $60.8 million of 30-year revenue bonds to build a downtown minor league ballpark under a financial plan the City Council
The adopted proposal increased design and construction costs, and required raising the debt cap for the project from the limit of $52.8 million of 25-year bonds the council set in late May.
The cost of building the stadium was increased to $52.5 million from $40 million in the original construction contract. Design and architectural costs were raised to $3.8 million, an increase of $725,000.
Proceeds will reimburse the city for April's demolition of City Hall and a science museum to make way for the 9,000-seat baseball stadium.
The Council also adopted a new 30-year lease agreement that doubles the original rent paid by MountainStar Sports Group, which is moving its Class AAA baseball team from Arizona to El Paso next year.
MountainStar offered last week to increase its initial rent to $400,000 a year, with regular increases, to support the additional bonds.
The bonds mainly will be supported by a 2% increase in El Paso's hotel occupancy tax approved by voters in November 2012 and other stadium revenues. The hotel tax is projected to support $48.7 million of the debt, with $12.1 million backed by the additional rent and other revenue and fees at the stadium.
The additional costs will allow the city to build an attractive stadium with more amenities than the earlier plan, Deputy City Manager William Studer Jr. told the Council.
The project now includes a building along the right-field fence with a team gift shop and party suites suitable for other functions as well, Studer said, and a water play area in center field.
A fourth tier of seating will be added between first and third bases to provide more premium seating closer to the action on the field, Studer said.
The total pledged revenue to the downtown stadium of $150 million over 30 years is $27.8 million more than projected debt service on the $60.8 million of bonds, he said.
"That money will be available to the general fund or to retire the debt early," Studer said.
The bonds will be issued by the City of El Paso Downtown Development Corp., which was formed by the council in December 2012 to finance and oversee the stadium project.
Underwriters for the special revenue bonds are Morgan Stanley & Co. LLC and Citi.
Fulbright & Jaworski LLC is bond counsel. First Southwest Co. is the city's financial advisor.
El Paso's $564.1 million of general obligation debt is rated AA by Fitch and Standard & Poor's, and Aa2 by Moody's Investors Service.
The 25-year special revenue bonds have been rated AA-minus by Standard & Poor's and A-plus by Fitch.
Josh Hunt, an investor in the ownership group, said the additional debt will provide a more versatile stadium that can accommodate concerts and other events.
"El Pasoans are finally looking forward, not backward," he said.
