June 22, 2018 • Local News
El Paso Inc.: Arena negotiations end with no settlement
For months, Mayor Dee Margo and city staff quietly negotiated with activist Max Grossman and his backer, retired Houston oilman J.P. Bryan. The goal: to end the bitter dispute over the proposed $180-million multipurpose performing arts and entertainment center, better known as the arena.
Bryan, who has helped fund legal challenges to the city’s arena plans, met with the mayor on March 21 to kick off talks on a compromise. Woody Hunt, a heavy-hitter in El Paso business, also joined the discussions.
They talked about the preservation of historical sites in the Duranguito neighborhood and ending the costly legal fights against the arena project.
Over three months, they traded detailed letters by email. There were compromises made by both sides, but by June, it was apparent that neither side would be satisfied, which dashed any hope of a settlement.
“I thought the mayor made a good-hearted effort with the proposal he made initially that indicated there was a willingness to work in some cooperative fashion to construct something that would save a significant amount of the (historic) assets there,” Bryan told El Paso Inc. “We just significantly disagree on this whole issue around the preservation of these assets.”
The negotiations are detailed in emails and documents Grossman shared with El Paso Inc. They include maps showing proposed arena plans, letters and 10 emails between Margo, Hunt and Bryan.
Hunt did not respond to an interview request, and the city provided a statement.
“The city of El Paso is always willing to explore options to resolve disputes related to the master planning area of this signature bond project,” it says. “The city participated in mediation related to the multipurpose performing arts and entertainment center. No agreement was reached.”
The mayor sent an email from his personal email account to Bryan on May 28. It indicates that, in the end, City Council decided to stick with its original plan for the arena and complete purchases for properties in the neighborhood that are already under contract.
El Paso voters approved the arena project in 2012 as part of the quality of life bond initiative. The project became controversial after City Council voted to build the arena in the Duranguito neighborhood, which preservationists argue is historic and are trying to save from demolition.
The city’s efforts to build the arena just south of the El Paso Convention Center in the Duranguito neighborhood have been stalled by protests and lawsuits filed by Grossman.
The first lawsuit resulted in a decision by an Austin judge that the city could not use the bond money to build an arena that hosted sporting events. The city has appealed the decision, saying sporting events need to be part of the project.
In the second lawsuit, Grossman’s lawyers argue the city violated the Texas Antiquities Code, and that case is now in Texas’ Second Court of Appeals.
And last week, Grossman filed a third lawsuit. It challenges the city’s decision last year not to act on two petition drives led by community activists. The petitions would have placed a measure before voters on whether to establish a Duranguito Historic District where the city wants to build the arena.
Looking to end the legal battle, Grossman and the city announced they would go into mediation in January, and since then, little has been released about the results.
The two sides met for private mediation talks for one day on Feb. 28, according to a letter from Bryan to the mayor and city engineer Sam Rodriguez.
What followed were unofficial discussions through email over a three-month period. Hunt sent an email to Bryan and the mayor to schedule the meeting that kicked the discussion off on March 21.
El Paso Inc. reached out to the mayor for an interview and was provided a statement.
“J.P. Bryan initiated a meeting through his attorney,” it says. “J.P. is convinced there are tremendous historical tourism investment opportunities in the area. There has been no interest in outside development in the neighborhood in 30 years, and the (multipurpose center) allows the opportunity to rejuvenate the area and enhance our Downtown.
“73 percent of the voters in the 2012 election overwhelmingly approved the (multipurpose center). I have known J.P. Bryan for many years, a lot longer than he has known Grossman, and it is unfortunate at this time there is still no resolution.”
At first, the sides seemed hopeful a deal could be made to end the dispute.
The earliest proposal rotated the arena footprint 45 degrees to the East, which would have preserved the old firehouse designed by famed architect Henry Trost, a building known as the Mansion, which once housed a brothel, and the Chinese laundry building.
After Bryan said he could not agree to the proposal, the city showed him a second proposal, the emails indicate.
The city proposed preserving additional buildings by moving the arena footprint north so that it abuts the El Paso Convention Center. The city also planned a pedestrian plaza that would encompass a cluster of office buildings, the historic Chinese laundry and a former CalTv store.
Bryan and Grossman’s legal team indicated they liked the plan but wanted the city to support the effort to create a historic district that would preserve the neighborhood. It would make the buildings eligible for state and federal tax credits to help finance their restoration.
“We strongly believe that private entrepreneurs will be incentivized to purchase the properties because of the tax credits,” Bryan wrote to the city.
He continued, “We can assure you that the city stands to earn far better return on the investment plan we are proposing, than continuing to deal with lawsuits.”
Also, they wanted 13 properties protected from demolition, and four buildings that were damaged last September by demolition crews to be repaired.
In return, Bryan and Grossman would dismiss their lawsuits against the city and said they were hopeful the deal could be presented to City Council in April 2018.
The city responded, agreeing to some of the terms, but officials wanted a separate plan created for the preservation and use of the vacant buildings. They asked Bryan “to be part of the solution by providing funds necessary to acquire, restore and provide a use plan for the properties he is interested in preserving,” city engineer Sam Rodriguez wrote.
The city also said it did not want to preserve the Tiradero building and the land behind the Trost Fire House. The city said that area was crucial for its proposed pedestrian plaza.
Margo said he was not sure the city could meet Bryan’s expectations for a compromise in an April 4 email from his personal email account to Bryan, his assistant Melody Donaldson and Hunt. Margo also said sporting events “must be part of the arena.”
By June 7, the talks were dead.
“The fact is that the philosophical gulf between you and me has only widened, especially because our last represents a 180-degree turnaround from the original plan you presented me,” Bryan wrote to the mayor.
He continued: “It appears that any further negotiations will not be productive.”
Margo sent a number of his emails to Bryan and Grossman through his personal email account.
City Council passed an ordinance in 2013 that requires city elected officials, employees, appointees and volunteers to upload messages and communications sent to personal devices to their city account.
It’s not clear if Margo did that, and he declined through a spokesperson to answer questions.
El Paso Inc. filed an open records request in May requesting emails sent by the mayor, city manager or city reps to Bryan, and vice versa, between Feb. 1 and May 18. The city’s response included one email. It did not include three other emails produced by Grossman.
Those include emails from March 22, April 4 and April 10, which would have provided information about the negotiations.
The documents obtained by El Paso Inc. will be posted with this story on Monday at ElPasoInc.com.
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