EL PASO, Texas - ABC-7 has obtained documents that reveal the terms of the lease for the proposed Great Wolf Lodge.
According to the documents, the City of El Paso will lease the 44 acre proposed site to Great Wolf Lodge for $1,000 a year, for 15 years. The documents state The Great Wolf Lodge will then have the option to buy the hotel land for $5,000 and the convention center land for $5,000 on or after project completion date.
The City acquired the land from businessman Paul Foster in exchange for 2,300 acres of public-owned land in Northeast El Paso valued at $18.6 million.
ABC-7 contacted Jessica Herrera, the Director of Economic Development for El Paso, who confirmed the terms of the lease. Herrera believes this incentive program will have a positive impact on El Paso. "If they (The Great Wolf Lodge) proceed and they move forward to El Paso, at a minimum, they're going to invest $100 to $180 million into the city," Herrera said.
Herrera also said the land is and always has been part of the incentive program for The Great Wolf Lodge, adding "This land is factored in to their incentive package to be able to secure them to come into El Paso."
Herrera told ABC-7 that in order to be eligible for the state incentive program, the City must retain ownership of the land for a period of 10 years, so they plan to inexpensively lease the land to Great Wolf Lodge. "It's a nominal rate because we have to make sure that there is a payment that the city secures," Herrera said, "but keep in mind, that the land is part of the incentive. It's complicated, but it's not unusual."
Herrera told ABC-7 that the lease term is for 15 years, instead of 10, because the City incentives extend for 15 years. The City wants to account for the duration of the City's incentives, to make sure there is some level of "engagement with the company even after the state incentives conclude."
Herrera said the convention center and the hotel must maintain the level of service and the level of standard agreed upon. Should that not happen, Herrera said, there are provisions in the agreement that say Great Wolf Lodge would "have to pay the city what the land is appraised at, which is $14.2 (million)."
Herrera also indicated the proposed site of the Great Wolf Lodge is part of a TIRZ (tax increment reinvestment zone). She said this allows the City, under the state statute, to be able to revert the land back to The Great Wolf Lodge and allows them to not have to "secure any type of rate. It gives you a lot of latitude, as long as the impact exceeds what your factoring in as public investment," she said.
Herrera told ABC-7 that the specific lease amounts were not made public and City Manager Tommy Gonzales did not mention them during an ABC-7 interview because the lease terms may change depending on the State Comptroller.
"That part of the lease term and the rate, and how that's going to be structured is contingent on the state participating," Herrera said, "That's probably why the City Manager didn't mention any thing specifically to what the lease is going to be, or the terms or the rate the reversion, because all of that needs to be discussed with the Comptrollers office."
Herrera told ABC-7 the process has begun, but there will be around a three month period of time before they know what the exact terms of the lease will be.
She did say not a single one of the City's incentives will change. "What's not going to change is the City's local support, the property tax rebates, the city HOT (hotel tax) rebates, the sales tax rebates," she said.
Herrera did say that the newly-released documents revealing the terms of the lease, are not new to the City Council or The Mayor, saying "The mayor and the council have been briefed on this project for the last two years, they understand the parameters."