REDCo wants to put El Paso in the hunt for an automotive plant that would require 1,000 acres, and a consultant agrees that the El Paso Public Service Board controls the perfect site in Northeast El Paso.

The problem is getting the PSB, which oversees the city’s water utilities, to sell the site under a 1965 agreement that allowed the city to acquire PSB land for city use for the original price the city paid for it, plus a 3 percent per year inflation factor. (Download site map below and the 1965 agreement below)

The discussion at today’s City Council meeting about arranging the potential sale of site on short notice elicited the sort of anti-PSB comments that council members have been making on occasion for the last two decades – though the policy for acquiring property from the 56-year-old utility was approved by a City Council years ago.

The 1965 agreement states, "When the city acquires land from the Public Service Board for the purposes of any other city department, the city will pay to the Public Service Board the original cost of the and ... plus interest at 3 percent per annum ... ."

The council approved a measure by a 7-1 vote to initiate the acquisition of the property from the PSB. City Rep. Melina Castro voted against proceeding with the project, which would be in her Northeast district, apparently because she wanted to delay action until after the PSB makes its position clear at its meeting Wednesday.

The PSB has never been asked by the city to sell off a property nearly as large as the 1,000 acres REDCo is suggesting. And, one question that may yet arise is whether the City Council requesting land that will end up in the hands of a private corporation is "for the purposes of any other city department," as the 1965 agreement states.

Bob Cook, president of the El Paso Regional Economic Development Corp., said the selected parcel is west of U.S. 54 and immediately north of Stan Roberts to the New Mexico state line/

It is also 6-1/2 miles from the nearest area designated for residential use in Texas, he said, and the 1,000-acre parcel would provide room for a relatively small plant and parking area in the center and a very large buffer area from any adjacent property owner.

“We are talking to two companies now, but we can’t be aggressive until we do this today,” Cook said referring to the need for a council-approved measure to initiate the property-acquisition process with the PSB.

REDCo is a nonprofit corporation the city helps finance to work with businesses and industries interested in expanding or relocating operations in El Paso. (For more information on REDCo, go to elpasoredco.com.)

He said REDCo has hired what may be the nation's top consulting company, McCallum Sweeny Consulting, and paid $120,000 for a Phase 1 study of what it would take for El Paso to lure an automaker interested in building a new car plant or an engine or drive-train plant. McCallum Sweeny is employed by cities looking for major auto manufacturers and by big car makers looking for new locations.

Cook noted that the El Paso area already has 120,000 automotive workers, most of them in Juarez, working for six of the 10 biggest car makers.

If the city were to attract a major automotive or biomedical manufacturer – two of the city’s targeted industries – it could mean 600 jobs averaging $41,000 a year in wages or $32 million annually, plus more than 500 spin-off jobs paying an additional $22 million a year.

A map Cook displayed of new automotive plants built or planned in recent years by Toyota, Nissan, Volkswagen and Tesla shows them spread across the South and Southwest, while plants in the nation’s Northeast are being shut down.

Cook said companies are will only consider locations that have access to rail and interstate highways, in attainment for ozone, not close to other major plants and that are in right-to-work states – criteria El Paso meets.

He said a lease for the property would probably not work because a company intending to make a $1 billion investment will want to own the site.

Kathy Dodson, the city’s economic development director, said she understood PSB is more interested in leasing property than in selling it.

But Mayor John Cook, one of the PSB’s five members, corrected her, saying the board is willing to sell or lease land the city needs.

With that, city Rep. Steve Ortega said the original policy for the acquisition of PSB land allows the city to buy it at the original 1950s or 1960s purchase price if the utility declares the requested land unnecessary to its operation.

Ortega said the PSB’s apparent reluctance to do so validates some of the recent criticism of the agency.

City Rep. Eddie Holguin, a frequent critic of the PSB, joined in.

“I don’t get it,” he said. “The citizens already paid for it once, and now they want to make us pay for it again. Maybe now is the time to dissolve it (the PSB) and take back the land.”

City Attorney Charles McNabb said the PSB, which controls about 30,000 acres in El Paso County, uses money from land sales to offset major infrastructure costs and the cost of acquiring water.

The mayor explained the longstanding agreement between the city and the PSB, which holds land bought by the city in trust and was given control of it by City Council, has been for the utility to sell the city land it needs for the original purchase price plus an inflation factor.

The mayor noted that “1953 dollars and 2008 dollars are different.”

“We shouldn’t be paying for that land again,” said Holguin, who demanded to know the original purchase price for the property before the end of the meeting and said the utility shouldn’t have a say in the matter.

Mayor Cook came back with a warning to Holguin, saying, “I’ll tell you right now, if you start drawing lines in the sand, you’re going to ruin the whole deal.”

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To reach David Crowder, write to dcrowder@epmediagroup.com.

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