MountainStar Sports Group offers to commit additional $12.1 million toward construction of El Paso’s Downtown Ballpark
On May 28, 2013, El Paso City Council directed City staff to limit the City’s financial commitments required to construct the Downtown Ballpark. Since receiving council’s direction, City staff has met with representatives of MountainStar Sports Group, LLC – the local ownership group bringing Triple-A Baseball to El Paso – to discuss the status of the project and changes needed to bring the budget in line with Council’s directive.
As a result of these discussions, MountainStar is prepared to commit $12.1 million in additional revenues to fund the construction of El Paso’s new Downtown Ballpark. This allows the city to construct the state-of-the-art facility, including all envisioned amenities, without burdening El Paso property taxpayers or substantially increasing the City’s direct contribution beyond the original commitment. The additional revenues would be generated by the following:
o Doubling MountainStar’s annual lease payment to the City of El Paso from $200,000 to $400,000 a year.
o Extending the term of MountainStar’s lease from 25 to 30 years.
o Extending the term of MountainStar’s non-relocation agreement from 25 to 30 years.
In order to formalize this commitment, Mayor John Cook will ask City Council to consider approval of the following items at the June 18, 2013, City Council Meeting:
Amending the Bond Authorization Parameters Resolution: If City Council approves, the City of El Paso Downtown Development Corporation would be authorized to increase its borrowing capacity from $52.8 million to $60.8 million. This would allow construction of the ballpark as presently designed and envisioned. Some of the project cost would be funded through revenue generated by favorable interest rates on the bond market. Sources of funding to repay those bonds include the following:
o $48.7 million would be repaid through Hotel Occupancy (HOT) Tax Revenues, as approved by voters in November 2012.
o $12.1 million would be repaid with MountainStar’s additional funding commitment.
o $0 would be repaid by El Paso property taxpayers.
§ Amending the Lease Agreement to extend the term and non-relocation clause: Over the 30-year-term of the lease, these provisions would generate the additional $12.1 million from the following:
o Additional Rent due to annual increase: $7,715,610.
o Additional Rent due to 5-year lease extension: $1,610,510.
o Parking: $1,057,377.
o Ticket Surcharges: $1,742,374.
Amending the Development Agreement: This amends the development agreement to be more precisely aligned with the final construction plans and documents.
Amending the Construction-Manager-at-Risk contract: This allows the city to align the construction budget with MountainStar’s increased financial commitment.
Amending the Design contract: This allows for the increased level of effort of the designers to align with MountainStar’s increased financial commitment.