Thus far, El Paso has benefited from its decision to refinance bonds for Southwest University Park, according to a recent presentation.
Last year, El Paso officials were reconsidering the financial future of the home of the El Paso Chihuahuas (Class AAA; Pacific Coast League), the bonds for which were originally issued in 2013. In April 2016, the decision was made to restructure some of the remaining debt, with officials looking to avoid a balloon payment of $17 million that was scheduled for 2023.
Refinancing the debt allowed the city to spread out that total, and it hoped at the time that revenues would grow, thus allowing it to avoid allocating general fund revenue to the debt. Chief financial officer Dr. Mark Sutter told the Downtown Development Corporation on Tuesday that the move to refinance may create a savings of roughly $11 million, with certain financial projections favoring the city. More from KVIA:
Thanks to that and the Hotel Occupancy Tax (HOT) going up by approximately ten percent a year, the city projects there will be a surplus by 2020. Sutter said the 2% HOT tax revenue has increased faster than original projections, adding another $6 million dollars to the improved stadium financing projections.
“Before refinancing in 2016, the total excess of revenue over debt service expenditures was projected to be $1,046,000 by the year 2043. With the refinancing of the bonds and the newly projected HOT revenue, the estimated excess of revenue over debt service is now $18,022,000,” said Sutter.
He added that the other benefit of refinancing and revised HOT figures is that the new projections show the last annual general fund subsidy to the debt service should occur in 2022 instead of 2024
Southwest University Park opened in April 2014.