El Paso staff outline strategy to pursue Texas project finance zone despite eligibility, border hurdles
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Summary
City staff briefed the Financial Oversight and Audit Committee on project finance zones under Texas law, saying El Paso currently does not qualify and that a 3‑mile zone around the convention center would fall largely in Mexico; staff said they will draft legislative language to seek eligibility and flexibility.
City staff told the Financial Oversight and Audit Committee on Jan. 15 that a little‑used state economic development tool — a project finance zone under Texas law — could provide decades of incremental state tax revenue for large projects such as a convention center expansion without raising local taxes.
Robert Cortinas, the city presenter, said the program would rebate the state’s portion of hotel occupancy tax, sales tax and mixed‑beverage tax collected in a three‑mile radius around an identified project back to the city for 30 years. “This presentation is really gonna focus on a potential revenue opportunity,” Cortinas said, adding the rebate would be the incremental state portion over a base year, not the full state share.
The city faces two barriers to using the tool, Cortinas told the committee. First, eligibility in state statute is narrowly bracketed by population and other conditions; “right now, the city of El Paso does not qualify,” he said. Second, drawing a three‑mile radius around the convention center would place more than half the zone in Mexico — limiting the amount of taxable hotel revenue the city could capture.
Committee members pressed staff on next steps. Representative Maldonado Rocha asked whether a project must be identified before applying; Cortinas replied the city must first secure a bill in the legislature to make El Paso eligible, and only afterward would the council define a specific project and submit required documentation to the state. Representative Medina asked for revenue projections over 10, 20 or 30 years; Cortinas said staff are preparing those numbers but declined to provide estimates before eligibility is obtained.
Cortinas said staff and the city’s legislative team are drafting language for the next session that would (1) make El Paso eligible under population criteria and (2) seek flexibility so the statute’s three‑mile focal point does not penalize border cities whose zones cross international lines. He cited examples of other Texas cities that have used project finance zones for convention center or arena projects, including Dallas, Fort Worth and San Antonio.
Staff also told the committee they will present early renderings and cost estimates for the convention center in about a month to provide context for funding decisions and outreach planning. A staff member said community engagement would begin later in the design process when funding options and timelines are clearer.
Next procedural steps: staff will continue drafting legislative language and prepare fiscal estimates; the item at FOAC was informational with no committee action.
