Higher-than-anticipated interest rates on city-backed bonds is raising the long-term cost of a new El Paso ballpark by $17 million, as the City Council approved the deal yesterday.
City officials had anticipated a rate of 5 percent for nontaxable bonds and and 5.75 percent for taxable bonds. That didn’t attract any bond buyers, so the city was forced to accept terms of 6.5 percent for nontaxable bonds and and 7.25 percent for taxable bonds. That’s based on a project cost of $60.8 million and a maturity date of December 2045.
No one, including those who ended up voting for a new bond rates, was happy. From the El Paso Times:
Mayor Oscar Leeser, acting as chairman of the El Paso Downtown Development Corp., voted in favor of the change along with city Reps. Cortney Niland, Ann Morgan Lilly, Michiel Noe, Larry Romero and Emma Acosta. Leeser has the authority to vote as a member of the corporation, unlike in his role of mayor where he can only vote to break ties.
“I hated the process,” Leeser said about the way the previous City Council handled the development of the $60.2 million Triple-A baseball stadium now under construction where the former City Hall building once stood. “It’s the worst process I’ve ever seen in my life. (But) it’s time to move forward, and unfortunately, we’re where we are at.”
Niland, saying she was disappointed the market isn’t what was expected just a few months ago, said the deal had to get done to complete the ballpark.
The increased costs may have ripple effects throughout the city budget, as general funds may be used to cover debt service in coming years.
The new ballpark is slated to open next season as home of the relocated Tucson Padres (Class AAA; Pacific Coast League).
Rendering courtesy Populous.
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