Austin judge rules City can build multi-purpose facility, not a sports arena

An Austin judge has ruled the City of El Paso can build the new $180 million Downtown multi-purpose facility it plans to build in the Duranguito neighborhood, but the facility cannot be built in a way to accommodate sports.

“The City many not lawfully expend proceeds generated from the sale of the bonds to design, construct, improve, renovate or equip the Facility in Downtown El Paso to be suitable for a sports arena,” Judge Amy Clark Meachum stated in her ruling, “No funding from other sources may be used to modify, complete or enhance the Facility to make it suitable for a sports arena.”

EDITOR’S NOTE: The judge did not make an outright decision on whether the City will be able to host sporting events. An earlier version of this article incorrectly stated the judge’s ruling meant no sporting events could be held at the facility.

Meachum also confirmed the validity of the 2012 bond election and allowed the City to move forward with demolition and construction.

“The City is authorized to issue general obligation bonds to finance the construction, improvement, renovation and equipping of the facility, and the acquisition of land right and rights-of-way therefore,” Meachum stated, “The Bonds are legal, valid, enforceable, and incontestable; and the additional Bonds to be issued to finance costs of the Facility … will be legal, valid, enforceable and incontestable.”

Judge Meachum also ruled her final judgment “constitutes a permanent injunction against the filing by any person or entity if any proceeding contesting the validity of the bonds, the authorization of bonds, the expenditure of money relating to the bonds.”

City Attorney Sylvia Borunda Firth told ABC-7 the City is pleased with the judge’s ruling validating the 2012 quality of life bonds. “In her final judgment, however, Judge Meachum chose not to adopt the language that was suggested by Mr. Grossman’s legal team – that would have prohibited the city from ever hosting sporting events in the multipurpose facility,” Borunda Firth said, “Unfortunately, she did not define what she meant by those terms and we are put in the position of having to deal with ambiguity in the final judgment.”

Borunda Firth further stated, “This overly narrow and restrictive interpretation of the contract with the voters is troublesome to us. The legal team will brief Council with regard to its options with regard to the final judgment.”

Meachum also ruled the City will not able to use other funding sources when it builds the arena. “No funding from other sources may be used to modify, complete or enhance the Facility beyond this voter-approved, quality of life project,” Meachum said.

The City of El Paso recently changed its certificates of obligation policy, non-voter approved debt, to allow Council to supplement funding for quality of life projects in the future.

Even though the City can move forward with construction of the arena, an attorney representing those opposed to building the facility in the Duranguito neighborhood claimed victory.

“They can’t build a facility that would be suitable for use for a sports arena and can’t use other funding to modify that down the road,” said attorney Cassandra McRae. “I think it’s a victory for transparency and honesty in local government … Because I feel like the city hid the ball … In that sense, it’s a victory.”

The City argued the arena would primarily be used for performing arts, but could also host entertainment like sporting events.

Opponents argued that voters were misled about the City’s intentions, claiming the City never mentioned the word “sports” in the 2012 ballot describing the project.

“The problem is the use of bond money for a sports facility not approved by the voters,” argued Harriet O’Neill, the attorney for Dr. Max Grossman, who has led the fight against building the facility in Duranguito.

The judge said last month that the City will have the legal authority to build the facility in the Duranguito neighborhood. The only question was whether sports would be allowed.

Scott Incerto, an attorney for the City, argued “sports arena” is the term used by opponents and was never brought up by the City.

“A determined and well-funded opponent can frustrate the will of the majority,” Incerto said, “Grossman’s issue is not sports, it’s the location. This is never going to be over for Mr. Grossman until he is able to prevent this facility from being built in Union Plaza.”

In court documents filed prior to the ruling, opponents of a sports arena proposed several ways to keep sports from creeping back into the picture later. One was to ensure the design does not include locker rooms or other sports specific features. The other was preventing the city from issuing certificates of obligation to pay for enhancements or completion of the facility later on.

City Rep. Michel Noe told ABC-7 the City needs clarification on whether it will be able to host sporting events at the facility. “I don’t want to build something that’s not going to provide a function for what were looking for,” Noe said, “It needs to be a full multi-purpose events center. It has to be. Otherwise, what’s the pupose of building just a smaller version of what isn’t going to provide what were looking for.”

Noe said the judge’s ruling “has to be appealed.”

DOWNTOWN ARENA TIMELINE

Early 2012 – City conducts community meetings to learn what residents want to improve quality of life.

August 2012 – Ballot language approved for $473 million in two bond questions.

November 2012 – Voters overwhelmingly approve both bonds and a HOT tax increase to fund a downtown baseball stadium

October 2016 – Duranguito announced as site for “multi-purpose performing arts and entertainment” venue.

December 15, 2016 – Activist Michael Patino announces attempt to recall District 8 rep. Cortney Niland.

December 16, 2016 – Mayor and City Reps allegedly have “walking quorum” meetings to discuss alternative sites.

December 19, 2016 – Ethics complaint filed for alleged violations of Texas Open Meetings Act.

December 20, 2016 – City council votes to remove Duranguito from list of possible sites.

January 10, 2017 – City approves feasibility study of footprint in a 4-3 vote that once again includes Duranguito

February 7, 2017 – City scraps feasibility study, Council instead votes to move forward with community meetings to share all previous research

February 28, 2017 – An outside legal expert, Attorney Paul Braden, who specializes in bond financing, tells Council the city’s proposition language is clear and the contract with voters calls for the location of the arena to be Downtown El Paso.

April 2017 – Attorney Frank Ainsa threatens City with suit of Duranguito selection.

May 2, 2017 – City attorney confirms city moving forward, says all properties have been bought except for one

May 5, 2017 – City files suit in Austin seeking declaratory judgment and approval to proceed with arena.

August 7, 2017 – Judge allows City to move forward with construction, but rules the arena cannot be designed to host sporting events.