El Paso Times Carries Water, Looks Foolish

It's day two of the "told you so" tour of El Paso and it looks like our first stop is at the El Paso Times... again.  If you don't think that certain people in this town can make a call and have any story they want written in the El Paso Times at a moment's notice, then this should change your mind. 

Today the El Paso Times dug further into the COMPLETELY LEGAL contract Brian Kennedy's for profit firm has with the nonprofit group that runs the coliseum.  You can read it HERE.  The gist of the article is simple - nothing wrong has been done but Brian Kennedy is an asshole because he out-maneuvered the Paso Del Norte Group.  I'll elaborate.

Anytime the the city or county hands over the day to day operations of one of their facilities or services, they lose control over how that facility or service is operated on a day to day basis.  In this case they handed over control of the County Coliseum to a nonprofit group.  That nonprofit group gets to manage the County Coliseum any way they see fit.  They don't have to put anything out for bid if they don't want to.  Brian Kennedy started a for-profit company to serve the needs of the coliseum and he did it because he could.  Somebody has to do what his for-profit company does for the County Coliseum - why not him? 

What the people whining about this contract don't understand is that when you give away the management of these entities, like the Civic Center or County Coliseum, you no longer have all of those rules that govern how a city or county government must conduct business.  I guarantee a look into the business practices of Bill Blaziek's group will yield similar shocking, but completely legal, goings on.  It's the big problem with the semi-privatization of public facilities and services.  I shouldn't say it's a problem - these guys run their places for a lot less than the government could and turn a better profit for taxpayers. 

If you think Brian Kennedy's deal stinks, I hope you're equally appalled by the $123,000,000 the city and county hope to give away to people whose names you don't even know yet - more on this in a minute.

Here's why the story was written...

The Paso Del Norte Group is livid that they didn't get their way in County Commissioners Court on Monday.  They got out-maneuvered by a slick Brian Kennedy who had long ago lined up his three votes on the court.  They were hoping to eliminate Kennedy and his claim to the Hotel Occupancy Tax (HOT) and take it all for themselves.  Little did they know (because they don't ever do their homework or even ask someone like Jaime Abeytia or me who is scratching whose back behind the scenes) that Kennedy was waiting for this very day to come and was more than ready to defend his deal.  County Judge Escobar was the only one lobbied on the deal and she was unable to convince her colleagues to help out the Paso Del Norte Group.  Haggerty wasn't co-opted, he was just being Haggerty and voting "no" like he always does. 

The Paso Del Norte group planted this story with the El Paso Times in order to try and bring the issue back to commissioners court - or at least save some face by wrecking the reputation of the rogue event promoter who peed on their parade and did so publicly (isn't anything happening during a parade
"public"?). 

You see, the Paso Del Norte Group needed the county to acquiesce first so they could go to city council and say "they said yes, so you should say yes."  This is a setback for the Paso Del Norte Group, but it's not as bad as their hurt egos are making it out to be.  They were planning on getting the $8 million in HOT each year for the next century, or at least for the next four or five years.  This would mean they could depend on roughly $40 million in cash over that span of time.   That lowers what the city and county have to split to around $80 million and that's well within the certificate of obligation range.  Now they might have to put some of they money up to a vote in a "quality of life bond issue."  There are some folks who do not want that to happen, but we can talk more about that later.

Anybody with any common sense is looking at the El Paso Times' willingness to carry the Paso Del Norte Group's sour water on this deal and asking the question - "Why are you upset about $1 million going to a guy who prints tickets when that same local government is about to hand over $123 million to a group of people with no face, no location and no plan for a new arena?"

You have to seriously wonder where the hell the El Paso Times' head is at and just how bad it smells wherever it's located.  The county government is trying to move heaven and earth to give away $123 million in taxpayer dollars to people who don't even have a sketch of what they want to do and they're worried about $1 million dollars spent over three years for a project that is ACTUALLY RETURNING MONEY TO THE COUNTY!   Is anybody with me on this?

I hate to make comparisons, but it is as if two men walk into an airport and one has a shirt with a anti-government slogan on it and the other is wearing a bomb vest with a note attached to it saying "I'm going to blow this place up," and the cops detain the guy with the t-shirt for questioning and let the bomber go.  For Christ's sake, these people want $123,000,000 dollars and nobody is even asking for a sketch of the building on a cocktail napkin!!!!!!!!   Are you kidding me?  Are you people that stupid? 

Each year when groups like Project Arriba want just a few hundred thousand dollars from the respective local governments, they produce presentations that feature reports on progress, budgets and an outlook for the upcoming fiscal year.  They are tasked with putting together a presentation and pitch that the politicians can use as "cover" for their decision to fund them.  With out that "cover" the politician is left with no way of explaining why they gave the money to the group.   Once they have that "cover" provided by groups like Project Arriba they can say to constituents,"I reviewed Project Arriba's progress and successes. They put 15 newly trained people into the workforce in full time jobs and that translated into tax revenue for the city because these people bought homes. They planon training 20 people this year."  So where's the expectation of a presentation from the Paso Del Norte Group?

And don't tell me that "it's coming and we'll have one when we ask for the money."  Things are happening legislatively right now to clear the way for this project and nobody but the insiders know anything bout it.  If you want to borrow my tax dollars, you owe me at least a proposed location.  Actually - YOU CAN'T BORROW MY TAX DOLLARS!  El Paso County and the City of El Paso are not a bank!  Go ask a bank for the money.  The reason businesses in America have a poor reputation is because people like the Paso Del Norte Group lobby politicians and then force them to give them money.  This is not what the government was setup to do.  Convincing a few elected schlubs to give away Other People's Money (OPM) is a lot easier than selling actual investors; so why not screw a few taxpayers for your own profit?

Quick note - tax abatements are not anywhere near similar to what's happening here.  Tax abatements are deferments of payment that did not exist in the first place.  Nobody is getting a check written to them from the public coffers.  There's a big big big difference between the two.

The El Paso Times needs to be ashamed that they are chasing a $1 million contract that is perfectly legal instead of the $123 million boondoggle staring them right in the face.  Then again, they're only doing what they are told. 

Look forward to the papers on the weekend to continue to carry the water for a project you will know nothing about, but will be paying dearly for. 

Comments

[Carl Starr]

I too wonder about a downtown arena...it may be something were not, I see report that most view downtown as dirty etc and its true to compare our downtown to San Antone or Austin is a joke. Whats needed for us is a more practical socialist approach to downtown, one that does not cater to the fat cats etc but we the people and costs little eg public drinking fountains and toilets, closing some streets and making them public walkways, this is just a low cost start but is very basic and needed and simple socialist, we cannot be Austin or yuppies etc but we can be us and us is we the people, the tired, the homeless, the thirsty. We dont need Glass Beach studies we need toilets and open spaces, not little sidewalks crammed with widgets down the Golden Horseshoe.

[Carl Starr]

its a fairly complex issue re profits and nonprofits and cities and counties, basicly a county can not do indirectly what it can't do directly...it does differ from tax abatements etc eg Texas may have a code like this: "The Legislature shall not authorize any county, city, borough, township or incorporated [**9] district to become a stockholder in any company, association or corporation, [*657] or to obtain or appropriate money for, or to loan its credit to, any corporation, association, institution or individual." ie it may be in essence the county is indirectly "loaning its credit" or even stronger argument "indirectly appropriating money for" to a for profit.

[Tim Collins]

Carl
That sounds pretty much like how Fannie and Freddie operate. :)

[Old Fart]

Thanks David K for there points:

* "They were planning on getting the $8 million in HOT each year for the next century, or at least for the next four or five years. This would mean they could depend on roughly $40 million in cash over that span of time. That lowers what the city and county have to split to around $80 million and that's well within the certificate of obligation range. Now they might have to put some of they money up to a vote in a "quality of life bond issue."

* "when that same local government is about to hand over $123 million to a group of people with no face, no location and no plan for a new arena?"

* "Each year when groups like Project Arriba want just a few hundred thousand dollars from the respective local governments, they produce presentations that feature reports on progress, budgets and an outlook for the upcoming fiscal year."

David K, thanks for putting this downtown arena scheme into such clear, blunt terms. Good work!

[Thomas]

David at the first of the year I asked just for a small park for my rural El Paso community and was told NO because they have no money for an projects.Then again I guess if you are lining your election pot you take care of those ,what were they called fat cats. Let the rural county citizens eat cake.

[Old Fart]

David K, you point out only 1 commissioner was pushing this, i.e. "County Judge Escobar was the only one lobbied on the deal and she was unable to convince her colleagues to help out the Paso Del Norte Group."

Wonder why the Times does not question this one person connection?

David K, have you ever thought about writing a Sunday guest column for the Times? If you did, do you think they would publish it? Or do they just hate you too much because of your disagreement with one reporter?

Since you have made so many good points on this downtown arena, it would be a good article for taxpayers to read and consider.

[Carl Starr]

"to obtain or appropriate money for..."

I think fannie and fredie facts are a little differant....I beleive they were once public then qausa privatized

the above is from FL State Constitution...iam not sure if TX constitution has equal...but i know case law says counties cannot do indirectly what they can't do directly...also ive seen cases that says once a corporation gets too in bed with gov then they can be subject to tx open records act, also if found to be acting 'in concert' with gov they can be subject to 42 usc 1983 etc

[dot]

I don't support a new arena for downtown.... but Brain Kennedy is still a giant jerkwad with a perfectly legal and binding contract who flaunts the coliseum as his personal plaything.

[Thomas]

Well said Dot!

[Old Fart]

The one thing that would help downtown, would be to complete the Border Highway throught that area, and hook it to Sunland Park or Transmountain Road.

It is a "pain in the butt" to go downtown, so we do it only if necessary which is not very often.

Right now the Border Highway from Zaragoza to downtown is being upgraded to three lanes. If they could get that Westside area done it would really open up all that area. It's an expensive project and will take time to work out the federal and state funding, plus the local match.

Thanks for all the interesting posts on this arena topic. Glad to see others have serious questions about it too.

[Carl Starr]

Sandra Key, Appellant v. The Commissioners Court Of Marion County, Texas, Appellee COURT OF APPEALS OF TEXAS, Sixth District, Texarkana 727 S.W.2d 667; 1987 Tex. App. LEXIS 6544
March 4, 1987, Decided Tex. Const. art. III, § 52, art. XI, § 3. We quote the pertinent language from these sections: Sec. 52.(a) Except as otherwise provided by this section, the Legislature shall have no power to authorize any county, city, town or other political corporation or subdivision of the State to lend its credit or to grant public money or thing of value in aid of, or to any individual, association or corporation whatsoever, . . . . (Emphasis added.) Sec. 3. No county, city, or other municipal corporation shall hereafter become a subscriber to the capital of any private corporation or association, or make any appropriation or donation to the same, or in any wise loan its credit; . . . . (Emphasis added.) The Commissioners Court points out in its brief that the language was designed to end the use of government money to profit private companies...The Commissioners Court also argues that a "public purpose" exception should be read into the cited constitutional articles. It contends that since the transfer was to a non-profit organization with the same stated goals as the commission, the transfer was in the public interest and therefore does not violate the constitutional ban. It cites cases which show that transfers of money to private corporations are permissible if the public purpose is accomplished through the transfer, even if a private [**5] interest is also benefited. Each case cited is readily distinguishable from the present situation... The Commissioners Court brief quotes from Willatt, Constitutional Restrictions on Use of Public Money and Public Credit, 38 Tex. B. J. 413 (1975), at some length to support its argument that the "public purpose" doctrine properly applies here. However, the article summarizes its discussion of the subject by concluding that "to insure that the political subdivision receives its consideration, [**6] viz., accomplishment of the public purpose, the political subdivision must retain some degree of control over the performance of the contract."

Ralph Barrington et al., Appellants, v. Jimmie P. Cokinos et al., Appellees Court of Civil Appeals of Texas, Beaumont "No county, city, or other municipal corporation shall hereafter become a subscriber to the capital of any private corporation or association, or make any appropriation or donation to the same, or in anywise loan its credit; but this shall not be construed to in any [*334] way affect any obligation heretofore undertaken pursuant to law." It does not, in our opinion, render either of the contracts invalid. A loan of the City's credit is definitely not involved, because neither of the railroad companies has become or is to become indebted to the City or to anyone else as a result of the contracts or of the transaction to which the contracts appertain. And we are just as convinced that the City has not become and is not to become a "subscriber to the capital" of the companies, since it neither owns nor is to own stock [**9] or any interest in either company. We are also of the opinion, of course, but for less succinct reasons, that the City has not made and does not propose to make, within contemplation of the constitutional prohibition, either an appropriation or a donation to or for the benefit of the companies.

[Chris Bailey]

David, I don't often agree with you but you are dead on here. What's more and what the times isn't telling people is that Hotel Tax money is only to be spent on certain things (a ridiculous limitation if you ask me). As such much of the revenue is pumped into the coliseum and is translated back to the county in freed up revenue. The cost to the county is 30 cents on the dollar. So the county is getting back two thirds of the money invested that is free of restriction regarding how that money is spent. That is a monumental return on an investment when compared to what would be earned through returns on bonds from the proposed arena (a gamble to be sure). Way to be on the ball with this, buddy!