Local NewsTaxes & Spending$33 Million Cameron County Arena Bond Placed on May Ballot Months After Failure by 55 Votes

Cameron County officials are asking voters to approve $33 million in spending six months after it was rejected initially.
April 28, 2022
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Approval of partial financing for a $100 million arena in Cameron County will be on the May 7 ballot six months after it failed by 55 votes last year.

The 10,000-seat arena, which would be located a few miles north of Brownsville, is intended to host concerts, festivals, sporting events, and other large events. Supporters of the project estimate it will create 600 “direct jobs.”

According to the arena’s supporting website, the bond would pay for one-third of the arena’s construction cost. Another third is promised by the developer, while the final will allegedly be financed by private and public grants.

Per the ballot proposition language, 2 percent of the county’s current hotel occupancy tax and 5 percent of its current vehicle rental tax would be authorized to pay for this project. Admissions to the arena would also come with a 10 percent tax. If approved, the total hotel occupancy tax rate in Cameron County would be 17 percent.

Last November, the proposition faltered at the ballot box — losing 4,842 votes to 4,776.

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When constructed, the arena would be owned by the county, and thus all future debt for it owned by the county, too. The arena’s operations will be overseen by an arena management company yet to be determined.

Cameron County Judge Eddie Treviño Jr. told Valley Central, “There is no plan at all to utilize any type of general fund or property tax revenues for this project.”

He further told the Brownsville Herald on Monday, “The arena itself may not ever be a big money generator, but what it does, especially in conjunction with the Madeira planned development out there, it’s just going to be a huge magnet for economic development. It’ll help the development out at Madeira. It’ll help bring tourism to Cameron County.”

And in a Wednesday statement, Treviño said, “We hope and anticipate that our Venue tax will be able to allow us to issue revenue bonds of between $15-30 million. This still leaves us $50-60 million short so we have much work to do to make up this shortfall.”

According to Treviño, the developer has fronted the arena’s land and infrastructure costs — one-third of the arena’s $100 million expense. Texas law has a competitive bidding requirement for projects, but Madeira has owned the land since 2020 and is effectively donating the land to the county for the arena’s construction.

The situation creates a strange gray area marked by a private entity earmarking a plot of its own land on which the county will build its own piece of infrastructure using another private company.

But the developer hopes the arena will serve as a centerpiece of its massive housing development.

“I love to see entertainment in our home county,” said restaurant owner Mark Perez, a supporter of the project. “Not having to drive to San Antonio or Houston is awesome. And it works the other way around too — if we have great entertainment, I believe some of our people that have grown up in Brownsville will come for a concert and visit their family…and spend money back here in Cameron County.”

Hotel occupancy and vehicle rental taxes flow into the Cameron County Venue Fund, which then finances various visitor attractions — which reached $4.1 million in Fiscal Year 2021.

That fund posted a $126,617 surplus, with the rest of the revenues all accounted for. But the rough monthly bill to pay off the $33 million over 20 years is $137,500.

Contingent upon visitors to pay the taxes, supporters of the arena say they estimate the venue will host 60 events per year with 70 percent occupancy. A PowerPoint from the county estimates a net $2.5 million loss in the arena’s operating income annually.

Of the attendance projection, Cameron County estimates 30 percent will come from out-of-town visitors — those likeliest to pay the hotel occupancy and vehicle rental taxes.

The levy would authorize the county to take out $33.33 million in debt to finance that third of the project, to be paid off over 20 years through the visitor’s tax increase.

“There’s nothing to prevent a future commission from raising property taxes for this,” Carlos Cascos, a former Texas Secretary of State and current GOP challenger to Treviño for Cameron County judge, told The Texan. Cascos is also a certified public accountant.

“This world is paved with good intentions, but that’s not a substitute for sound fiscal decisions.”

He also called the attendance and show projections “impractical.”

Cascos and his fellow opponents of the arena levy say there is neither the population nor revenue available to support the project. Hidalgo County, which has a population double that of Cameron County, has two arenas within its boundaries and both are smaller than this proposal.

“The pro-county arena side expects a $2.5 million shortfall annually even in the unlikely event they hit their metric of 60 shows and 70 percent attendance,” Cameron County GOP vice-chair Roman Pérez told The Texan. “Hidalgo County with twice the population and a stronger economy has two smaller arenas that have difficulty meeting this sellout metric.”

They worry that on top of paying for the capital expenditure — the $33 million in debt to finance one-third of the project — Cameron County taxpayers will be eventually saddled with making up the operations shortfall, too.

The local political fight over the arena is bringing out all the big players. Dennis Sanchez, a local developer whose property surrounding the stadium plot stands to jump in value, has been one of the biggest advocates of the bond. Sanchez’s 1,300-acre Madeira development surrounding the prospective arena stands to gain or lose a lot in value based on the arena’s construction.

Screenshots obtained by The Texan show the Friends of Cameron County Arena PAC is framing the levy as an opportunity to study the project. 

“We want to find out if building a multipurpose arena in Cameron County would be feasible,” reads a campaign text message from the PAC. “At this point, the county wants to know if you would vote in favor of starting to study the matter.”

In a video posted to Facebook, sitting alongside Treviño, Sanchez frames the levy similarly. “Basically, what we’re asking the voters to do is give the county the opportunity to do an extensive feasibility study, an extensive investigation into the feasibility of building this [arena].”

“It [would] contemplate a whole lot — how much is it going to cost, how big is it going to be, where’s it going to be, what kind of activities would it support, and how is it going to be paid for?”

That PAC has faced scrutiny on its financials, spearheaded by the Cameron County Republican Party.

Morgan Graham, chair of the Cameron County GOP, announced the party filed an ethics complaint against the Friends of Cameron County Arena PAC, which reported zero money raised or spent from March 1 to March 28.

“[D]uring this time, Friends of Cameron County Arena SPAC maintained a Facebook page and website that both included information indicating that [both] were managed by Imagine It Studios, a McAllen digital marketing firm,” the release reads.

Graham added, “The proponents of this project have made plenty of lofty promises but have not provided any objective data demonstrating the economic viability of this project.”

The county GOP’s complaint was accepted by the Texas Ethics Commission, which will now evaluate it.

With Treviño and Cascos falling on opposite sides of the issue, the arena fight is a precursor to the November clash for the county’s top executive position — an election backdropped by a burgeoning political shift in South Texas.

Cameron County had the twelfth-largest electoral swing among counties across the United States — swinging 19 points toward Republicans.

In both instances, voters will have the final say.

The Friends of Cameron County Arena PAC did not respond to an interview request.

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Brad Johnson

Brad Johnson is an Ohio native who graduated from the University of Cincinnati in 2017. He is an avid sports fan who most enjoys watching his favorite teams continue their title drought throughout his cognizant lifetime. In his free time, you may find Brad quoting Monty Python productions and trying to calculate the airspeed velocity of an unladen swallow.

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