EDINBURG, RGV – The new $88 million Bert Ogden Arena in Edinburg will create 1,114 direct jobs in the Rio Grande Valley, according to a new study by UT-Rio Grande Valley.
The study was commissioned by Edinburg Economic Development Corporation. The arena, which is slated to open in late Spring, is owned by the City of Edinburg.
Roughly half of the funds for the project have been provided by the City of Edinburg and half by Cantu Construction and Viper Arena LLC. The arena will be home to the Vipers basketball team and will house live entertainment.
“The economic impact analysis shows the investment in the project will create 1,114 jobs in the region,” the UTRGV study states. “The project will add $43.3 million to the Texas gross state product of $1.3 trillion dollars, and create a total economic impact of $96 million dollars in the local economy.”
The study says that excluding construction expenditures, “the project will create 469 jobs, and generate an economic output of $45 million in the local economy every year.”
These statistics do not take into consideration the expenditures by the public at the arena and the pad sites or the expenditures of the guests at the hotel.
The study was conducted by Sai Mullapudi, business economic research associate in UTRGV’s Division of Research, Innovation, and Economic Development.
Here is the study:
Rene Borrego, controller for Cantu Construction & Development and CEO of Cantu Entertainment Group, was interviewed about the Bert Ogden Arena project immediately after an Edinburg City Council meeting on Tuesday evening.
Borrego and Alonzo Cantu, owner of Cantu Construction and the Vipers, gave testimony at the city council meeting about the project. They were questioned about the cost of the project and delays to it by Edinburg City Council member Gilbert Enriquez.
Borrego told the Rio Grande Guardian:
“This is the kind of project a city goes into when they need partners. There is no way a city of this size can build a $90 million arena. Mr. Cantu came to them with the project. Other cities were asking for this project and yes, there is TIRZ money that is being used to finance the project but those monies will be paid back by the businesses that are inside the TIRZ. So, you stimulate growth in under-developed areas with this type of incentive.”
TIRZ stands for Tax Increment Reinvestment Zone, Under this financing tool a municipality, often working with a private entity, secures bonds for economic development and pays them back through the property taxes and sales taxes generated by new development within the zone.
“It (a TIRZ) is used all over the country,” Borrego told the Rio Grande Guardian. “Jerry Jones used it for the Texas stadium, now it is for practice facilities. Houston Sports Authority did it for the Toyota Center. This is not something unusual. But, I think what happened there (in the council meeting), is you had a councilman (Gilbert Enriquez) trying to make it seem like there is misuse of public funds, which is just an exaggeration. It is really sad and I am really disappointed to hear that.”
If there has been a misunderstanding about the Bert Ogden Arena project, where has that come from, Borrego was asked. He responded:
“They (some Edinburg council members) have not educated themselves. They have just gotten to the Council and they have not educated themselves on how a TIRZ works, how this type of stimulus works, and how these bonds are paid back. The responsibility for paying back the bond issue lies with those people that are in the TIRZ zone. It is going to be up to us, the restaurants and pads that are in front of the Arena, the hotel that is in front of the Arena, up the Walmart and those pad sites, up to the HEB and those pad sites to stimulate growth.
“Ultimately, the pressure goes on them to increase the value of their properties and also to generate sales tax in order to pay back those funds. The burden does not fall on the city. In actuality, the bonds are issued by an LGC, a different corporation that they (Edinburg) created. This project does not even affect the City’s credit rating. I do not think these guys, at least some of the new commissioners, has e educated themselves on how this kind of project works.”
In his remarks to Edinburg City Council, Borrego said that without a TIRZ, Edinburg would not have landed the Bert Ogden Arena. He repeated this claim in his interview with the Rio Grande Guardian.
“Without the TIRZ this arena would not be here. We would be in another municipality. We talked to several of the municipalities here in the Valley that wanted it. Mr. Cantu is investing a lot of money in this and he does not want to go anywhere he is not wanted.”
Editor’s Note: The Rio Grande Guardian has invited Edinburg Economic Development Corporation Chairman Gilbert Enriquez to participate in a livestream conversation about the Bert Ogden Arena and what 2018 has in store for other Edinburg economic development projects.
Editor’s Note: Here is a Facebook Live conversation the Rio Grande Guardian conducted with Borrego and Bert Garcia, president of the Vipers basketball team:
RGG LIVE: We are at Bob's Steak & Chop House Edinburg for a livestream about the City of Edinburg’s $88 million Bert Ogden Arena.
Posted by Rio Grande Guardian on Thursday, February 8, 2018