DALLAS — El Paso, Texas, will buy downtown office space with certificates of obligation as City Hall is demolished to make way for a new
The City Council gave the go-ahead Tuesday to city manager Joyce Wilson to negotiate the purchases with owners of two buildings in downtown El Paso, including one that currently houses the city's daily newspaper.
The price for the El Paso Times building and a nearby structure is expected to total approximately $22 million, including the renovations needed to make them suitable for municipal operations.
The council voted in late June to demolish City Hall to provide a site for a $50 million baseball stadium.
The city will ask voters in November to raise the hotel tax by 2% to 17.5%, the highest rate in Texas, to support $15 million of tax-exempt bonds and $35 million of taxable debt for the public-private stadium project.
El Paso voters also will decide in November on a
The two-part program includes $245 million for park and zoo projects and $223.3 million for a downtown multi-purpose event center as well as library and museum upgrades.
The certificates will require an increase of $5.75 a year in the property tax on an average $123,000 residence, the city said.
Wilson recommended buying the buildings with proceeds of certificates of obligation, which do not require voter approval, rather than GO bond proceeds because of the tight time schedule on the project.
The city agreed to have the stadium completed by April 2014, in time for the baseball season, which means that demolition of El Paso City Hall must begin in March 2013, Wilson said.
Negotiations with property owners need to be wrapped up within 60 days, she said, so employees can begin moving operations in February.
The city first looked into leasing space once City Hall is demolished, Wilson said, but it was determined to more economical to buy property.
The City Council will have the opportunity to review the final purchase agreements, she said.
"If negotiations are not reasonable, then we can cease negotiations," Wilson said.
Mayor John Cook, who was not at the June 26 meeting when the stadium proposal was adopted, said he regretted the decision to raze City Hall.
"We're committed to sacrificing a functional building," he said.
A recent appraisal put the market value of City Hall at $15 million, but Cook does not agree with that assessment. The true value is closer to $40 million, he said.
"I don't care what that appraisal said," Cook said. "I think it is bogus."
MountainStar Sports Group, a group of local investors, said it would bring in a Class AAA minor league baseball team if El Paso agreed to build a stadium.
MountainStar Sports Group received permission last week from Minor League Baseball to buy an unidentified team in the Pacific Coast League.
El Paso is rated AA by Standard & Poor's and Fitch, and Aa2 by Moody's Investors Service.
The city's outstanding debt includes approximately $600 million of GO debt and $217 million of certificates of obligation.
