City of El Paso arena bond revocation proposal explained

For the first time in the city’s history, voters are being asked whether they want to take back millions of dollars in debt that voters previously approved but haven’t been spent. 

The Nov. 5 ballot will ask voters within the El Paso city limits to vote for or against a proposition to cancel the city’s authority to issue the remaining $128.5 million general obligation bonds for the multipurpose performing arts and entertainment facility – also known as the Downtown arena. The city often refers to the proposition as the MPC (multipurpose center) ballot measure. 

The amount is what’s left of the $180 million for the arena approved by 72% of voters in the November 2012 election. The difference was spent in acquiring properties in the Duranguito neighborhood where a former city leadership planned to build the arena, as well as engineering, design and other costs.

• Voting “for” the proposition means the city can no longer borrow the remainder of the funds to build the arena. 
• Voting “against” the proposition means the city can move forward with borrowing the remaining funds to build it, if the City Council approves the sale of bonds. 

If the revocation passes, any future council may still undertake building an area – either by taking another bond proposal to voters or finding other funding sources. The city could also partner with other governments or private companies to build the facility. And depending on what’s proposed, it would not have to be Downtown.

If it fails, the city could move forward with plans to build an arena – but it would have to be Downtown as stated in the 2012 proposition. The city could also try to partner with other entities to build it or choose not to issue the bonds and leave the project on hold.

The City Council in 2023 voted to prohibit more spending for the arena in the Duranguito neighborhood, and voting against the proposition would not override the vote. If the proposition is defeated, there’s no certainty that the arena project will be completed.

“It’s hard to tell exactly what might happen next,” City Attorney Karla Nieman said, stating that she could not speak to what legal advice she might provide to the council. “We’re in the middle of an election and it’s going to be a new council. … Irrespective of the results, it’s going to be up to the council to decide how to move forward.”

The bond revocation proposition is a rarely used mechanism under state code that allows taxing entities to ask voters whether they want to cancel their authority to issue debt. State code also allows voters to petition for a bond revocation election for any bonds that have gone unsold for 10 years or more after they were authorized to be issued.

Paul Braden, head of public finance with the city’s bond advisers Norton Rose Fullbright, said he could not discuss active client matters as a matter of the firm’s policy. Braden also served as the city’s bond advisor in 2012.

Because the $128.5 million in debt has not been issued, taxpayer dollars have not been used to pay it. That also means that taxpayers would not see any type of refund or tax reduction if the revocation is approved. However, if the revocation is voted down, the city at a later time could issue the bonds to be repaid by taxpayers.

Nieman said the remaining bonds could only be used for an arena in Downtown. After years of litigation over its allowed uses, the Texas Supreme Court has upheld that the multipurpose center could be used for entertainment and sports events, she added.

The city has put up for sale buildings it bought in the Duranguito neighborhood, and city leaders have indicated those funds would be used to pay down the $51.5 million from the arena bond that have already been spent.

Complicating matters, however, is the city’s contract with Venu, the entertainment venue company that’s supposed to build an amphitheater in Northeast. The agreement approved by the City Council this summer includes a no-compete clause that prohibits the city from building any other venue with a capacity of 4,000 or more people within 60 miles of the amphitheater – with the exception of the voter-approved Downtown arena. 

Arena part of Downtown revitalization

The arena was pitched by supporters more than a decade ago as part of a larger quality of life bond and Downtown revitalization plan that included building a children’s museum and a Mexican American culture and history center. 

Two bond proposals totaling $473 million were presented to voters in 2012: $245 million for parks and recreation, senior centers, aquatic centers and zoo improvements. and $228 million for the children’s museum, cultural center, interactive digital wall, library expansions and the arena. A third proposal asked voters whether to use hotel occupancy taxes to build the ballpark. Voters approved all three.

Community leaders who advocated for the arena have expressed disappointment that construction of the facility has not moved forward – and frustration that current city leaders are painting their efforts as misleading.

“When a project like this is delayed this long it’s because of a lack of leadership,” said El Paso businessman Leonard “Tripper” Goodman, who led the El Paso Tomorrow PAC that helped get the 2012 bond approved. “It’s a major community and business opportunity lost if this doesn’t move forward. I believe it can be saved with the right leadership and partnerships.”

Goodman said he’s offended by people who 12 years later say the arena was not properly funded, saying the cost was right for the time and the scope being considered.

“Nobody was lying or being misleading,” Goodman said, adding that the bond revocation sets a bad precedent. “You do this once, and now every time a new mayor or council comes in they can just go against the will of the voters for political gain.”

Steve Ortega, an attorney who was a key supporter of the quality of life bond issue in 2012 while serving on City Council, criticized later councils for failing to act to make the arena a reality. 

“No city has ever found prosperity by saying we ‘re not going to invest in ourselves, and that seems to be the philosophy of this leadership,” Ortega told El Paso Matters. “Communities across the country have modern arenas because the market dictates they have quality of life amenities to help them compete for jobs and talent.”

City Reps. Brian Kennedy, Joe Molinar, Art Fierro, Henry Rivera and Chris Canales in August voted to take the proposal to voters; while city Reps. Josh Acevedo, Cassandra Hernandez and Isabel Salcido voted against it. 

Kennedy, who is now running for mayor, said if the proposition is approved, it leaves the city open to opportunities for a future venue that best suits El Paso. 

Hernandez, also a candidate for mayor, has said she believes the city should honor its contract with voters in 2012 who voted overwhelmingly for the arena and other bond projects.

Aside from the arena, the Mexican American Cultural Center, which is slated to open in Downtown later this year, is the last of the 2012 bond projects to be completed. Renovations to San Jacinto Plaza, also funded largely under the bond, were completed in 2016, while the $97 million state-funded streetcar began operations in 2018.

“There’s no other public projects scheduled for Downtown,” Ortega said. “There’s been no other seeds planted to continue revitalizing Downtown into the future. You have to keep planting seeds.”