EL PASO, Texas (KTSM) — The El Paso City Council approved a nearly $5 million capital improvement plan for the Downtown ballpark but will defer pursuing projects until fiscal year 2022.
With the exception of safety and security upgrades for the ballpark, most projects scheduled to upgrade the facility will have to wait. The council voted unanimously for the plan during their Tuesday meeting.
The council also directed the city to find alternative methods to pay for commitments for the ballpark, which belongs to the city.
It was the first day for the renewed council where they faced a big fiscal challenge over how to pay for debt service and capital project commitments for the Downtown ballpark.
A depletion in expected hotel occupancy tax revenue and inability to allow fans to attend events at the park has cost El Paso taxpayers $570,381 to pay debt on the facility this fiscal year. The city faces a contractual obligation with MountainStar Sports Group to make a nearly $5 million capital improvement plan for the facility over the next five years.
City officials say MountainStar Sports Group agreed to deferring the capital plan into fiscal year 2022.
“If we are under contract, I don’t think that looking at different avenues and bringing it back in the future would violate any of the contractual agreements as we didn’t even have a season last year,” said Mayor Oscar Leeser.
Faced with budgetary challenges due to a lack of revenue produced this year from the ballpark and the global pandemic, the El Paso City Council is looking for alternative ways to meet their obligations to maintain the facility.
The City Council conducted its Tuesday meeting with a few fresh faces who won their elections at the end of 2020. Mayor Leeser and District 4 Rep. Joe Molinar attended their first meetings after defeating incumbents. City representatives Alexsandra Annello, Cassandra Hernandez and Henry Rivera continued their service for their districts after winning re-election.
Early in the meeting, the City Council learned about a $1.3 million variance between revenues from 2019 and 2020 through hotel occupancy taxes, sales taxes, ticket revenues and parking, according to city documents.
City financial figures suggest a $1.1 million general fund subsidy was avoided through debt service savings of $581,400. Subsidies to support the ballpark have cost taxpayers more than $3 million since it opened in 2014.
Robert Cortinas, the city’s chief financial officer, said revenues from hotel occupancy taxes, which is a major source of revenue used to pay the ballpark debt, were affected by significant lows in 2020. In April, occupancy dipped to nearly 30 percent.
Cortinas said hotel occupancy has since climbed and is currently at 60 percent. It rivals averages throughout the state at 42.5 percent, he added.
He mentioned there was excitement a year ago that the ballpark would be able to pay itself due to growing revenues from hotel occupancy taxes and thriving teams playing at the stadium. But the health and financial effects of the global pandemic have set back those projections, he added.
“The way the projections were built is all depending on how many fans we are going to have at the ballgames and soccer games coming up this next season,” said Cortinas. “Again, a lot of unknowns right now.”
City officials say the nearly $5 million capital improvement plan is to make interior, structure, food service and retail improvements to the facility over five years. Some of those improvements would include a WestStar Club interior upgrade of $545,000, a $720,000 main video board purchase and $200,000 club level concourse resurfacing, among other items.
Items scheduled for purchase in the fiscal 2021 budget include a $550,000 Tower Light Conversion to LED, a $177,000 video hardware and monitor replacement cost and a $65,195 turf management equipment cost, among other items. In total, the city would pay for nearly $1 million worth of improvements at the ballpark in 2021.
A challenge for the city is many of the listed items come from a contractual agreement with MountainStar Sports Group for the ballpark, according to city officials. The city is tasked with maintaining the facility in its agreement with MountainStar.
But some representatives on the council voiced concern and called for an alternate way to pay for the debt service and improvements.
District 3 City Rep. Hernandez said the city needs to consider not using general fund dollars to meet the city’s obligations to the ballpark. She said she supports the ballpark and its teams, but wants to reassure her constituents that the city is spending tax dollars appropriately.
Hernandez asked if the city can explore other options, including using the city’s Impact Fund, which is funded through a percentage of franchise fees from El Paso Electric, or other economic development funds. Mayor Leeser and Reps. Annello and Svarzbein agreed the city should explore other options.
Hernandez also asked if the city can reach out to MountainStar about the issue.
“It’s too volatile to use those dollars for upgrades to a ballpark,” she said. “At this time we should postpone that and reconsider the dollars we do have.”
City Manager Tommy Gonzalez said his administration could go back and review if there are other ways to pay for the city’s obligations, but cautioned there may be limitations.
Gonzalez mentioned the budget for 2021 is solvent and the reason the city has not brought back some services is due to health orders and concerns. City staff had experienced health challenges with infection over the past few months, he added.
“I think right now, contractually, we might be bound to agree to the terms that we are recommending at this particular time,” he said. “We can certainly bring it back.”