Officials: Ballpark subsidies to end earlier than anticipated

In early January, El Paso City officials estimated taxpayer money would be needed for at least five more years to subsidize debt payments for Southwest University Park.

City officials now predict they should be able to stop dipping into the general fund by 2021. That is two years earlier than predicted.

City staff members updated council and the mayor on the ballpark financing. During the past four years, the city has paid $2.2 million in general fund subsidies.

City Manager Tommy Gonzalez said the city will repay itself once the ballpark gets out of the red.

The ballpark is generating money through hotel and sales taxes, ticket revenues, rent charged to Mountain Star Sports Group and parking at the convention center during games. But it’s not enough to completely cover the debt payments. At least not yet.

“Yes, we knew that all along. Early years of the program we knew that there was going to be some subsidy needed. But highlighting overall, it’s actually going to be a great benefit to not only the downtown and the whole redevelopment, but we are going to have about $18 million of surplus at the end of 30 years that can go back into maintaining the ballpark and taking care of it,” Robert Cortinas, interim director of municipal finance operations for the city, said.

Cortinas presented the numbers to the council and mayor.

“Between the refinancing, the performance of the hotel occupancy tax, there are a lot more dollars now so, taxpayers are not going to pay for it. We are going to get reimbursed for anything we spent early on. And we are actually going to have a lot more money now to actually take care of the ball park,” Cortinas said.

Under an agreement with Mountain Star Sports Group, $150,000 of fixed rental revenue will be added to the capital repairs reserve fund every year.

Gonzalez isn’t convinced it is enough and said more money may be needed down the line.

Right now the debt modeling shows the city’s subsidy should zero out by 2022 and the ballpark will be able to generate enough revenue through the hotel and sales taxes that are being collected, to generate enough revenue to cover the debt payment.

The city’s hotel occupancy tax, or HOT, is 17.5 percent. It is the highest in the state, and one of the highest in the country.

In 2012, voters approved a 2 percent increase in the HOT for the purpose of financing the ballpark.
The city has started doing audits to ensure hotels are in compliance with reporting the city taxes owed.