The Great Wolf Swindle

The City must have stayed up late figuring out how to swindle the taxpayers with that new Great Wolf Lodge.

Remember back in November of 2016, when City Representative Cortney Niland said that building the
“arena” within 1,000 feet of the Convention Center would be worth an extra $25 million?

Here’s the story from the El Paso Inc.

Despite pressure to reconsider the site for a Downtown arena, El Paso City Council members are committed to the controversial Union Plaza location – and now want build a more expensive arena with 15,000 seats.

That’s because building the arena within 1,000 feet of the El Paso Convention Center would allow the city to recover about $25 million in sales tax paid to the state, city Rep. Cortney Niland said Friday.

. . .

Niland said an additional $25 million is an important reason for sticking with the Union Plaza site immediately south of the convention center.

“We would lose it if we picked the other site,” she said.

El Chuqueño and the El Paso Inc. debunked that tale. Here’s David Crowder in the Inc.

When El Paso Inc. asked for an explanation last week, the city made four people available for a telephone interview: the city attorney, Sylvia Firth, deputy city manager Cary Westin, chief financial officer Mark Sutter, and interim economic development director Jessica Herrera.

They said that while the arena isn’t needed for participation in the state program, building it close to the convention center would greatly enhance the city’s application and could increase the amount of the rebates.

“Projects like the multipurpose center are considered amenities that are in support of the convention center campus,” Herrera said. “So, amenities such as the multipurpose center are what would give us an opportunity to prequalify this and submit it to the state.”

Firth said the comptroller’s office will also want to know what the city intends to do with the money from the state, and linking the city’s stake in the hotels with the convention center and arena would help make the city’s case.

“It’s all in support of convention center activity,” she said. “We’re not saying it necessarily needs to be within 1,000 feet. But we need to be able to say in good faith to the comptroller’s office and to the community … this is part of an enhancement to the convention center site.”

See, if near or adjacent facilities are amenities to a Convention Center, then the City can retain some of the state sales tax generated by those facilities.

And the City, in their agreement with Great Wolf Resorts, is proposing that the West Towne Market Place Shopping Center is an enhancement to the Great Wolf Resorts convention center hotel.

It’s all there in legalese on page 13 of the 88 pages of the Agenda Item Summary Form. Try to wade through this:

(11) Destination Tourism Grant
(a) If the SCCHP [State Convention Center Hotel Program] does not apply to the Project, then the City will provide a grant (each, a Destination Tourism Grant) to Great Wolf Resorts for each of the Ten SCCHP Years equal to $4,000,000 (for a total of $40,000,000 over the Ten SCCHP Years).

(b) If the SCCHP applies to the Project and the entire West Towne Market Place Shopping Center is treated as an ancillary facility pursuant to the SCCHP with respect to the project, then the Destination Tourism Grant shall be zero dollars each year.

(c) If (i) the SCCHP applies to the Project but less than the entire West Towne Market Place Shopping Center is treated as an ancillary facility pursuant to the SCCHP with respect to the Project, and (ii) for a particular one of the Ten SCCHP Years the aggregate West Towne Market Place Grant Amount is $4,000,000 or more, then the Destination Tourism Grant for such particular year shall be zero dollars.

“Less than the entire West Towne Market Place Shopping Center” means that, like if the Comptroller decides Pet Smart, or TJ Maxx, isn’t a contributing amenity to the Convention Center at Great Wolf Lodge, then the City’s on the hook to make sure that Great Wolf receives $4 million a year for ten years.

(d) If (i) the SCCHP applies to the Project but less than the entire West Towne Market Place Shopping Center is treated as an ancillary facility pursuant to the SCCHP with respect to the Project, and (ii) for a particular one of the Ten SCCHP Years the aggregate West Towne Market Place Grant Amount is less than $4,000,000, then the destination Tourism Grant for such particular year shall be equal to (A) $4,000,000 minus (B) the aggregate West Towne Market Place Grant Amount actually received by Great Wolf Resorts for such particular year.

What that means is that if the State Comptroller decides that the existing West Towne Market Place Shopping Center is not some amenity to the Great Wolf Lodge, then the the City of El Paso is out $40,000,000 cash over ten years.

Forty. Million. Dollars.

Or maybe the State Comptroller will decide that a water park hotel with meeting spaces isn’t a Convention Center at all, no matter what you call it. In that case, the City of El Paso is out $40,000,000.

But don’t worry about it. The taxpayers can afford it.

3 comments

  1. There is so much flim-flam in this deal that it’s hard to know where to start. OK. The two articles in the Times and the El Paso Inc about this resort say that it could have 500,000 visitors a year. That is roughly 1320 people PER DAY, every day, holidays included. Is that realistic?

    The claimed possible economic impact is $680 million over ten years. How exactly will that happen? Surel the wages that will be paid to the staff won’t total that much…is the analysis presuming that all these resort visitors will abandon the resort and go somewhere else to eat? What DOES the analysis say? Is this claimed $680 million AFTER the tax and other incentives are deducted from the economic impact?

    If Great Wolf has decided now that El Paso is a good venue, not least for proximity to Mexico, why do we have to hand over such huge incentives?

  2. The City guarantees Great Wolf $40 million over ten years. The rebates are predicated on the West Towne Market Place getting treated as an “ancillary” project to the Great Wolf “Convention Center.” That is a ridiculous proposition. I can’t imagine the Texas State Comptroller agreeing to that. We’ll end up paying the $40 million.

  3. It’s a bad deal for the city, for us who live in El Paso, just like the ballpark deal. It was stated that Great Wolf is a philanthropic oRganization, what they need to do is pay their taxes like we do.

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