(C) El Paso Matters.org This story was originally published by El Paso Matters.org and is unaltered. . . . . . . . . . . Northeast El Paso amphitheater agreement approved by City Council [1] ['Elida S. Perez', 'More Elida S. Perez', 'El Paso Matters', '.Wp-Block-Co-Authors-Plus-Coauthors.Is-Layout-Flow', 'Class', 'Wp-Block-Co-Authors-Plus', 'Display Inline', '.Wp-Block-Co-Authors-Plus-Avatar', 'Where Img', 'Height Auto Max-Width'] Date: 2024-07-02 The City Council on Tuesday narrowly approved a 20-year incentive deal that gives 17 acres of city-owned land and provides $31 million in incentives to the entertainment development company that plans to build a 12,500-seat amphitheater in Northeast El Paso After more than an hour of discussion, the council voted 4 to 3 to approve the deal with Venu, formerly named Notes Live, a 6-year-old company based in Colorado Springs that plans to build amphitheaters nationwide through public-private partnerships. City Rep. Henry Rivera was absent from the meeting. City Reps. Cassandra Hernandez, Josh Acevedo and Isabel Salcido voted against the agreement, raising questions about contract clauses relating to competing venues and an $8 million loan to the company. The city agreed to not develop any new city-owned entertainment venues with a capacity of more than 4,000 people within 60 miles of the amphitheater or that would compete against it for events – with the exception of voter-approved projects such as the Downtown arena. The clause does not apply to private developers or other local government entities. Under the contract, Venu also has a “first right of refusal” – or the first opportunity – to develop and/or operate any voter-approved project depending on the procurement process. “I have never been informed that there would be a first right of refusal that they would have the opportunity first to develop a voter-approved project,” Hernandez said. Karina Brasgalla, interim director for the Economic and International Development, said the city would still have to abide by state and bidding laws. If a bid was required for the future project, Venu would have to enter the bidding process and the clause would not apply. “I think it’s actually in the city’s best interest when you have a venue like Notes Live coming in with this amphitheater and at the city constructs a multipurpose center and you have continuity of operators – it actually is to the benefit of the city,” interim City Manager Cary Westin said. City leaders have been silent on the future of the long-stalled $180 million Downtown arena – the 2012 voter-approved bond project that in February was proposed as an indoor-outdoor amphitheater with an 8,000-person capacity in Union Depot Downtown. Those talks included considering a public/private partnership to build and operate it. Why a non-compete clause? Acevedo took issue with the competing venue clause not being included in incentive agreements the company has entered into with other cities. “I think that that’s really important to highlight – and the confirmation that this noncompete is not in any other agreements is really kind of shocking to hear at this point,” Acevedo said. “I was under the impression up until today that this noncompete was a standard thing that you have used in all of your agreements and we have been singled out.” Robert “Bob” Mudd, president and chief operating officer for Venu, during the meeting said that El Paso was the only market so far to have the competing venue clause. Mudd said having a potential competitor of a similar-sized venue would compromise both the private amphitheater and city-owned project. “There has to be a promoter that would come along with it (the contract),” Mudd said. “Promoters will come into these, but not in the event that there is an oversaturation of assets.” Fierro said he did not have concerns about the clauses in the agreement, adding they had been previously discussed. “Just to make it clear – there was nothing that was sprung on us today at this meeting that we have not talked about prior to this,” Fierro said. A 12,500-seat amphitheater at the Cohen Entertainment District in Northeast El Paso is being planned under a partnership with the city of El Paso and entertainment venue developer Notes Live. (Courtesy city of El Paso) Under the agreement, Venu will develop and own the amphitheater. That’s unlike the Downtown ballpark, which is owned by the city and leased to MountainStar Sports, owners of the El Paso Chihuahuas Triple-A baseball team and the El Paso Locomotive FC soccer team. The ballpark is financed using hotel occupancy taxes as approved by voters in 2012, as well as lease payments, ticket surcharges, sales taxes and other revenues. MountainStar contributed about $12 million toward its $78 million construction. The agreement with MountainStar, originally signed in 2012, also includes a clause for competing venues that states that neither the city or an affiliate may “develop, finance, facilitate or otherwise participate in the development or approval of any outdoor concert venue in downtown El Paso” that competes with the ballpark – with the exception of a United Soccer League stadium. Questions of the ballpark agreement arose when the city revealed plans to change the Downtown arena to an indoor/outdoor amphitheater instead of an arena-style facility earlier this year. “There is a noncompete with the operators of the ballpark where we can’t build a facility that competes with that facility because they’re the operators,” Kennedy said. “The noncompete is more to protect the operators than it is to protect the people that are building it. So, if we have a noncompete for the operator of the ballpark, why would we not have a noncompete for the operator of this venue? That just makes sense.” What incentives are included in the amphitheater deal? The El Paso Sunset Amphitheater agreement calls for $31 million in Chapter 380 incentives, a program which allows municipalities to offer loans and grants to private companies at little or no cost to promote state and local economic development. Acevedo also raised questions about the qualifications of the project to be partially funded with an 8-year, $8 million development loan backed by the Texas Economic Development Fund established as part of the acquisition of El Paso Electric. The loan is part of the total $31 million incentive deal. The loan may be forgiven if the company completes construction within 36 months from entitlement and produces a minimum of 25 events per year in the third, fourth and fifth year of the rebate period, according to the agreement. “That is directly for economic development projects and that does include tourism and destination entertainment projects, so this project qualifies,” Brasgalla said, adding it is money the utility provides and cannot be passed on to ratepayers. The incentive package with Venu also includes a real and business personal property tax rebate, a sales and use tax rebate, a mixed beverage and gross receipts tax rebate, a development fee waiver, and a construction materials sales tax rebate. The setting sun illuminates clouds over the Cohen Entertainment District in Northeast El Paso, where a proposed amphitheater could be built with a combination of public and private funds, June 19, 2024. (Corrie Boudreaux/El Paso Matters) The amphitheater will be built on a 50-acre plot of city-owned land in the Cohen Entertainment District the city has been wanting to develop around the former location of a Minor League Baseball stadium. The incentive agreement requires a minimum investment of $80 million by Venu and requires the company to secure an operator for a minimum of 40 national touring acts per year. The amphitheater is set to open in 2026, according to the agreement. The development clause in the agreement stipulates that Venu must secure the operator before it can receive a temporary certificate of occupancy. Although the development contract has time frames for when the company needs to obtain a certificate of occupancy, it allows the city to grant extensions if Venu is unable to meet deadlines, but “has made a good faith effort to fulfill its obligations.” The City Council last month postponed the public hearings it voted on Tuesday for a parking and traffic study for the site to be finalized, but the contract shows the developer now has until Aug. 15 to submit a final study – which may be extended if both the city and company agree to it. Aside from the perks in the contract, Venu has to reach its benchmarks or risk going into default. Some of the other provisions aimed at protecting the city include clauses related to insolvency, false representations and failure to pay property taxes, but the company has an opportunity to address any defaults within 90 days of any notice. The 90-day period may be extended if the developer “has made a diligent effort” to address the issue. If the developer is unable to address the default, Venu would have to pay back the rebates provided for the five years prior to the date of the default within 180 days. The company also has to allow the city access to its operating records, accounting books and any other records related to the economic development considerations and incentives for qualified expenditures and auditing purposes, city documents show. The city has recently been involved in a battle with the non-profit El Paso Zoological Society over money collected by the group. The city in March opted out of renewing a longtime agreement with the group which has, in part, led to questions about whether the city has the right to review the nonprofit’s financial records now that the contract is no longer in place. [END] --- [1] Url: https://elpasomatters.org/2024/07/02/northeast-el-paso-amphitheater-contract-approved-notes-live-venu/ Published and (C) by El Paso Matters.org Content appears here under this condition or license: Creative Commons CC BY-ND 4.0 International. via Magical.Fish Gopher News Feeds: gopher://magical.fish/1/feeds/news/elpasomatters/