EL PASO, Texas - The city of El Paso rejected an agreement with the nonprofit group trying to raise millions of dollars for the Mexican American Cultural Center.
The Mexican American Cultural Institute was confident, at one point, that it could raise $20 million. But a few months ago, members were operating in the red.
The city and the Institute were unable to come to an agreement on the terms of a second draft of a memorandum of understanding proposed by the institute.
"There were also a lot of requests that were being made, that made the relationship very difficult to move forward," said Tracy Jerome, the director of the city's Museums and Cultural Affairs department.
City Rep. Michiel Noe pointed out the group's fundraising goal had dropped from $20 million to $8 million.
"As far as how much funding they would be able to get, also you have to couple that with how much funding we are going to need to do a project the way they want it done. It just didn't add up. So, we couldn't accept it," Noe said.
The El Paso City Council voted Tuesday to look at alternate ways to deliver the voter-approved cultural center.
Former U.S. Rep. Silvestre Reyes is a member of the nonprofit institute. He said he is disappointed the group was not able to negotiate further with city officials.
In 2012, voters approved $5.7 million in bond money to build the cultural center, but the nonprofit envisioned something much grander.
The plan was to retrofit the Abraham Chavez Theater in downtown El Paso to house the center.
The price tag ballooned to $35 million. The city had pledged 10 million to help cover the cost.
But a recent study done by a consultant hired by the city predicted the nonprofit would fall far short of its goal.
"(There were) questions of programability, there were questions on all kinds of things with being able to maintain it and just the cost of running it. It was all going to fall on the back of the taxpayer. And we just didn't feel that was what we had promised the tax payer when we voted for this. And so we are going back to our original," Noe said.
City officials said they will now return to the original plan of building a cultural center with a budget of $5.7 million. The city is no longer pledging an extra $10 million for the project.
Noe said staff will begin looking at alternate sites, most likely in the downtown area. As of now, there is no timeline.
"Unfortunately, we are starting over again essentially with this because we just weren't able to move forward with the hope of doing it at a grander scale. Just don't have the money," Noe said.
Lee & Associates, the consultant group hired by the city, was blunt in its assessment of the institute's fundraising ability.
The study found a serious and widespread perception problem.
The authors wrote: "The community believes that the current leaders of the MACI have a culture and history of developing adversarial relationships, both internally and externally and do not reflect or communicate well with El Paso's rising Mexican-American leaders. In fundraising, perception is half the battle."
Reyes called the report a "hit piece."
The study was presented to City Council reps. including Cassandra Hernandez-Brown.
"I do not believe that the group is ready to enter an agreement with the city due to financial capacity, sustainability, no board, no board structure, no strong board structure and there is no strategic plan," Hernandez-Brown said.
She also pointed to the study's other findings as well.
Fundraising experts said to successfully raise $20 million, the institute needs a five-year track record of raising an average of $2 million annually.
The consultants found in fiscal year 2016, the group raised $19,626 and $1,630 in 2017 to date.
And even if the nonprofit makes the recommended changes such as coming up with a strategy plan and strengthening its board, the study projects the group will only be able to raise $3 to $7.5 million --- far short of the initial $20 million goal.
"I think it's this council's responsibility including myself, that we find a partner who has a history and a record of sustainability and financial capacity. And without those two main factors it would be a bad decision for the city to move forward," Hernandez-Brown said.