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What The Twenty-Year Battle For The Plaza Theater Teaches Us About The Downtown Arena

As we discussed in our previous article, public policy in El Paso is driven by a small group of individuals who use wealth to control the city’s politics. In recent years, Paul Foster and Woody Hunt have driven the city’s public policy agenda using philanthropy to speak for El Paso. In particular, Woody Hunt uses the El Paso Community Foundation (EPCF) as the lynchpin to build a narrative around taxpayer-funded investment for the city’s economic development. The EPCF was founded in 1977. [2]

The Burkitt Foundation gave the El Paso Community Foundation its first endowment. El Paso attorney Carl Ryan, who was one of the organizers of the El Paso foundation, [1] was also on the Burkitt board. [2] In 2002, the Burkitt Foundation had a $12.9 million fund which it used to fund Catholic causes. The Burkitt Foundation was formed in 1962 by Elizabeth Burkitt Crane. [2]

The El Paso Community Foundation was created “to serve as a non-profit, tax exempt organization to receive gifts, bequests and donations which are held in trust.” [3] The EPCF was designed to be a clearing house for philanthropic money in El Paso. According to the founding directors, the community foundation takes advantage of the 1969 Tax Reform Act which allows philanthropists to leverage their charity donations up to 50% through the EPCF with the ability to carry over excess tax benefits over a period of five years, instead of the 20% over one year through traditional charity donations. [3]

The goal of the Community Foundation for the first year was to educate the public about what it is. “The public needs to recognize our name and understand our purpose and be aware that we are not conflicting with United Way.” The El Paso Community Foundation established itself as an administrator of charitable donations in El Paso by offering administrative overhead such as handling funds and office expenses “to keep (philanthropy) money in El Paso.” [3]

The foundation was established on February 1, 1977 with an initial $2,000 in funding. [5] On April 12, 1977, the non-profit announced that its first donations were $34,000 for office overhead and a $20,000 permanent endowment from the Houston-based Burkitt Foundation. [4] By 1979, the El Paso Community Foundation was “called the fastest growing public trust in the country.” It was one of 250 public trusts in the country at the time. [5] A non-profit public trust, in essence, is a non-profit organization that encourages charity by building trust that the donation will be delivered to its intended recipient years later and that administrative costs will be leveraged across several charities to keep costs down. Tax reform encouraged the growth of community foundations across the country. The El Paso Community Foundation looked to focus charity in the El Paso community.

By 1984, the Advisory Board of Trustees for the EPCF included J. A. Cardwell, Roy T. Chapman, Guadalupe A. De La Vega, Leonard A. Goodman, Jr., Hector Holguin and other well-known El Paso leaders. [6] Guadalupe De La Vega is Alejandra De La Vega’s mother. Alejandra De La Vega is married to Paul Foster.

By 2008, the El Paso Community Foundation was one of the two largest non-profits in El Paso. The other was the Paso del Norte Health Foundation. The Paso del Norte Health Foundation had about $447.5 million in assets and the EPCF had about $195.2 million in 2007. [8] The assets for both organizations were a combination of assets, investments and grants.

Foundation Lawyer Sued By El Paso Community Foundation

Buried in the foundation’s financial statements is a curious accounting note that reads “The Burkitt Foundation, an ‘Affiliate’, entered into a Mediated Settlement Agreement dated September 17, 2009.” [8] The EPFC uses the term “affiliate” to label organizations that it manages charitable funds for. The affiliate can be an entity that it raises funds for, like Bob Moore’s El Paso Matters, or the defunct Newspaper Tree that the foundation tried to form as a non-profit, or an organization like the Burkitt Foundation that the EPCF manages charity funds for. Burkitt, which was the first charitable organization to entrust its donations to the EPCF in 1977, was now embroiled in a legal dispute with the El Paso non-profit.

In March 2009, the foundation sued its former lawyer. At issue was a dispute between Burkitt’s long-time leader and one of El Paso Community Foundation’s founders, Carl E. Ryan. EPCF alleged that Ryan was “damaging the foundation he no longer represents.” Ryan had resigned from the EPCF in 2008. [7] At the time of the lawsuit, the Burkitt Foundation had about $13 million in investments while the El Paso Community Foundation had lost over $90 million of its investment portfolio during the 2009 recession leaving it with about $10 million. [10]

By the time the legal case was settled later in 2009, the Burkitt Foundation endowment was under the control of the El Paso Community Foundation and Carl Ryan had been ousted from both organizations. The case revealed that Ryan came to control Burkitt because his father, an attorney in Houston, was the lawyer for Bess Burkitt Crane. Carl Ryan is the grandson of the Houston lawyer that set up the Burkitt Foundation and served on the boards of both organizations. [10]

The Texas Attorney General began looking at the decisions made by Carl Ryan for the Burkitt Foundation in 2000. Carl Ryan was “self-dealing” according to the Attorney General’s investigation. The Texas Attorney General ended the investigation into Ryan two years later when the Burkitt Foundation agreed to submit itself to the oversight of the El Paso Community Foundation. Under the agreement, Burkitt still had the authority to determine where its money went to, but the EPCF had oversight over its operations. [10]

In 2008, the Burkitt Foundation wrote a letter to the El Paso Community Foundation to let them know that they were leaving the business relationship. Burkitt alleged that the EPCF was diverting its money to use in the Plaza Theater. In the October 2009 settlement agreement, the El Paso Community Foundation agreed not to use any Burkitt money for the Plaza Theater. Carl Ryan was also barred from serving on the Burkitt board. Ryan also agreed to pay $23,000 to the Community Foundation as part of the settlement. Ryan admitted in court to fabricating an EPCF document. The Burkitt Foundation was put under the El Paso Community Foundation as part of the settlement. [10]

The Plaza Theater

In 2004, the EPCF offered the City of El Paso $10 million to renovate the Plaza Theater. [8] Attempts to restore the Plaza Theater go back to 1974 when historical preservationists saved it from the wrecking ball. The theater was going to be demolished to make way for a parking lot downtown. In 1978, city council wanting to revive the downtown area around the theater applied for a $300,000 federal grant to be used to help fund a $3-4 million renovation project for the area. [11]

The theater, which was built in 1929, opened its doors sometime in the early 1930s. The theater closed in 1985. [18] The El Paso Community Foundation started working to preserve the theater in 1986. [26]

In 1982, a Tax Increment Financing (TIF) district was created freezing taxes at the 1982 rate in an 88-block area of downtown. The TIF was to raise $40 million through increases in property valuations in the area to improve the targeted downtown area. [18] By 1990, $6.3 million had been raised by the TIF. In May 1988, the TIF board approved spending $2 million of the TIF money on the Plaza Theater provided that the El Paso Community Foundation could match it with $1.5 million. [13]

On April 17, 1990 city council approved a bond election for June 16. The $101.9 million measure included $5.5 million to renovate the Plaza Theater and add an adjacent office tower for non-profit art-related organizations. [14] The 1990 bond measure was the tenth time that voters would be asked to pay for the Plaza’s renovations. The El Paso Community Foundation had purchased the theater in 1987 after a $1 million fund-raising event. [15]

On June 16, 1990, El Paso voters rejected the request for $5.5 million for the Plaza Theater. As part of the deal with the city to float the bonds, the EPCF had deeded the theater to the city. The foundation had given the city the theater, [18] along with $100,000 of original art purchased by an anonymous donor and the original Wurlitzer organ paid for by the Glyn and Karl O. Wyler Sr. Foundation [17] on the condition that the theater be renovated by the city by 1992. [18] If the city did not complete the renovations by 1992, the theater would revert back to the Community Foundation. [16]

Unable to convince voters to renovate the theater and facing the 1992 deadline to return the theater to the foundation, the city began looking at the downtown TIF funds again. [18] Although downtown revitalization was always part of the narrative for investing in the Plaza Theater, by 1992 it had become a focal point for improving downtown for economic development. City council wanted to use the downtown TIF monies to create weekend festivals clustered around the theater and the El Paso Museum of Art and other museums. [19]

Nestor Valencia took the leadership for establishing the Arts Festival Plaza. Valencia was a vice-president of the El Paso Community Foundation at the time. On March 24, 1992, city council was set to vote on using $1 million of the TIF money to renovate the theater and spark a downtown renaissance for El Paso. Among the supporters of the festivals, that were to be the catalysts for downtown revitalization, included John Houser and Rosa Guerrero. [20] Houser is the artist behind the controversial equestrian statue at the airport. City council approved $2 million from the TIF monies to fund the arts festival and renovate the theater.

El Paso, who had moved away from attracting private investments for economic development, was now going to use taxpayer funds to stimulate economic development. As the El Paso Times editorial in 1992 labeled it, the city was going to use a “risky revitalization strategy” because it was “the best” and “only” plan the city had. The city was now taking downtown properties off the tax rolls and using tax monies to renovate them. Included among the properties taxpayers were footing renovation bills and that were no longer contributing to the tax base were the Plaza Theater for $3 million, a new art museum that took the Greyhound bus terminal off the tax rolls and other downtown projects. In 1988, when the downtown TIF district was implemented, the tax valuation of the properties in the district were $211 million. In 1990 the valuations were $238 million and by 1992 it had risen to $263 million. According to the El Paso Times, this was the best option for El Paso’s taxpayers even though taking properties off the tax rolls were not sufficiently revitalizing the downtown area with taxable property growth. [21]

Larry Francis Kills Latest The Plan

However, from 1992 through 1994, the Plaza Theater kept coming up in city politics, but it was unable to muster enough votes to move renovations forward. In 1994, the El Paso Community Foundation pledged $3 million to operate and maintain the theater for ten years. In return, the EPCF wanted the city to provide $5.9 million in certificates of obligation to renovate it. [12] Certificates of obligation do not require voter approval. Although city council approved the funding, then-mayor Larry Francis vetoed the funding. Francis objected to the cost. [12]

To entice city council, the Community Foundation again offered $200,000 a year for ten years to run the theater if the city’s taxpayers would pay to renovate it. Larry Francis argued that the Plaza Theater was not essential for downtown revitalization. Francis did not veto two other downtown projects using certificates of obligations totaling $9.8 million – the Arts Festival Plaza and a new El Paso Museum of Art. [22]

From 1994 through 1999 the El Paso Community Foundation kept the issue of the Plaza Theater alive. Several schemes from IMAX movies to the El Paso Independent School District creating a performance center were added to the mix of the city renovating it with tax dollars. Letters to the editor with newspapers editorials and advertisements from the foundation for fundraising and explaining the importance of the theater graced the newspaper pages regularly. The Wurlitzer organ was placed at Sunland Park Mall to raise awareness for the theater.

Carlos Ramirez, the mayor after Francis, made renovating the Plaza Theater his priority for downtown revitalization in January 1999. [23] However, Ramirez dropped the Plaza Theater from his agenda when three competing arena projects came on the scene. Of the three sports arena proposals in 2000, Carlos Ramirez and an Hispanic group of businesspeople were trying to convince the taxpayers to foot the bill for an arena in downtown El Paso.

One of the locations considered for an arena required destroying the theater to make way for the proposed arena. Talk of eradicating the theater soon disappeared.

By late 2002, the long-neglected Plaza Theater required emergency roof repairs to stabilize the structure. In August 2002, the El Paso Empowerment Zone approved a $533,000 grant and a $1.15 million loan that would not have to be paid back if the theater was renovated by November 2004. But the empowerment zone did not have the funds to pay for the loan. The city agreed to use parking meter revenues to pay the bonds necessary for the loan. [24]

The grant came from federal funds, and taxpayers outside of El Paso took notice. In a syndicated opinion column in the Tyler Morning Telegraph, a Tyler Texas newspaper, columnist Mona Charen referenced the “$900,000 for the renovation of the Plaza Theater in El Paso,” as an example of federal spending that caused the federal deficit. [25]

The El Paso Community Foundation Gets Its 20-Year Wish

About 20 years after the El Paso Community Foundation started the drive to renovate the Plaza Theater, its efforts came to fruition on March 16, 2006 when it reopened. It cost $38 million to renovate it. Beto O’Rourke took the lead at city council in 2002 to pay for the renovations of the theater. On a six to one vote, city council raised parking meter fees to 50 cents from 25 cents to pay for the loan to renovate it. [26]

It was in the Plaza Theater that Bill Sanders unveiled the Glass Beach Study that maligned Mexican-American culture in El Paso and set forth the plan to erase Segundo Barrio from El Paso’s historical record. It is also the case study of how philanthropy was used to force El Paso taxpayers to pay for something they opposed.

The Lesson for The Downtown Arena

The Plaza Theater became the model for the El Paso Community Foundation for raising funds for projects by using economic development as the catalyst for having the taxpayers foot the bill. After acquiring the theater, in 1994 the EPCF offered $3 million over ten years to operate the theater after the taxpayers spent millions to repair it. The foundation remained steadfast from 1994 through 2002 that the taxpayers would foot the bill and the foundation would run the theater after it was renovated. It took almost a decade, a rejection from El Paso voters and several attempts for city council to pay for the renovations with non-voter approved certificates of obligation until a willing city council, led by Beto O’Rourke, voted to use tax dollars to renovate the theater.

The El Paso Community Foundation became the catalyst for funneling philanthropy dollars to specific projects targeting El Paso neighborhoods for economic development purposes funded by taxpayer dollars. An allegation that the Community Foundation tried to funnel donated money to the Plaza Theater against the wishes of the foundation was made in 2009 and the foundation agreed not use Burkitt Foundation money for the theater as part of a court settlement. But it nonetheless managed to have the taxpayers pay to renovate it.

As El Paso Politics explored in Who Speaks for El Paso, philanthropy has become the preferred vehicle for Woody Hunt, and to a lesser extent, Paul Foster to use for public policy decisions in the city. The El Paso Community Foundation is at the center of gentrification in El Paso.

In our next article we will explore how the El Paso Community Foundation is central to who will narrate the political voices for El Paso voters in 2022. El Paso Matters is now an “affiliate” of the El Paso Community Foundation. We will look closely at Bob Moore and El Paso Matters and how it can easily become the vehicle to frame the political narratives in 2022.

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We are on a mission to deliver the news and information important to you. Information that no one else is covering. We believe that public policy is grounded on an informed citizenry. We provide information based on analytical analysis that is well-sourced to allow readers to understand the policy decisions that affects their lives. We keep our reporting open to give everyone access to our reports. We are self-funded. This allows us to be independent and we are not influenced by stakeholders on how and what we report.

Help us to keep this resource available to everyone. Your support allows us to fund the site and pay for the research we use to bring important topics to your attention. The 2022 Elections are around the corner. We need your support to keep you current about the political scene in El Paso. Support our project by making a small donation today.

We need your Help in 2022

We Bring You News & Information No One Else Reports

We are on a mission to deliver the news and information important to you. Information that no one else is covering. We believe that public policy is grounded on an informed citizenry. We provide information based on analytical analysis that is well-sourced to allow readers to understand the policy decisions that affects their lives. We keep our reporting open to give everyone access to our reports. We are self-funded. This allows us to be independent and we are not influenced by stakeholders on how and what we report.

Help us to keep this resource available to everyone. Your support allows us to fund the site and pay for the research we use to bring important topics to your attention. The 2022 Elections are around the corner. We need your support to keep you current about the political scene in El Paso. Support our project by making a small donation today.

We need your Help in 2022

We Bring You News & Information No One Else Reports

We are on a mission to deliver the news and information important to you. Information that no one else is covering. We believe that public policy is grounded on an informed citizenry. We provide information based on analytical analysis that is well-sourced to allow readers to understand the policy decisions that affects their lives. We keep our reporting open to give everyone access to our reports. We are self-funded. This allows us to be independent and we are not influenced by stakeholders on how and what we report.

Help us to keep this resource available to everyone. Your support allows us to fund the site and pay for the research we use to bring important topics to your attention. The 2022 Elections are around the corner. We need your support to keep you current about the political scene in El Paso. Support our project by making a small donation today.

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Footnotes:

  1. Community Foundation El Paso Times advertisement, “Great Gifts To El Paso: Cornelius O’Brien Ryan,” El Paso Times, November 4, 2007.
  2. Adriana Chavez, “Catholic-affiliated charity expands in El Paso,” El Paso Times, May 16, 2002.
  3. Grace Hartger, “EP Community Foundation Too Flexible For Extinction,” El Paso Times, April 3, 1977.
  4. “Good Start,” El Paso Times Editorial, April 13, 1977.
  5. Grace Hartger, “Charities net benefits of foundation’s funds,” El Paso Times, April 27, 1979.
  6. El Paso Community Foundation Advertisement, El Paso Times, November 26, 1984.
  7. Ramon Bracamontes, “Foundation sues its former lawyer,” El Paso Times, June 4, 2009.
  8. El Paso Community Foundation And Affiliates, Combined Financial Statements, December 31, 2020 and 2019 Together With Auditor’s Report.
  9. Vic Kolenc, “Firm foundations, Market struggles affect El Paso groups,” El Paso Times, October 19, 2008.
  10. Timothy Roberts, “AG quashes attempt to quit Community Foundation,” El Paso, Inc., December 14, 2009.
  11. Ed Kimble, “Plaza Prospects Excite Arts Leaders,” El Paso Times, January 27, 1978.
  12. Debra Barron Diaz, “The Plaza Theater…Here to Stay!?,” El Paso Times, May 8, 1994.
  13. Carol Viescas, “Let’s Activate Tax Increment Financing plans now,” El Paso Times Editorial, March 11, 1990.
  14. David Crowder, “Stadium roof tops off city’s bond wish list,” El Paso Times, April 18, 1990.
  15. David Crowder, “Actress joins drive to save the Plaza Theater,” El Paso Times, April 19, 1990.
  16. Jim Conley, “Voters pan Plaza Theater,” El Paso Times, June 17, 1990.
  17. El Paso Community Foundation Advertisement, “EPCF Travels Many Roads for Community Betterment,” El Paso Times, September 23, 1990.
  18. Donna Weeks, “Plaza restoration faces 1992 deadline,” El Paso Times, January 1992.
  19. Joe Olvera, “Council may approve festivals, but money is short,” El Paso Times, March 22, 1992.
  20. Joe Olvera, “Plaza Theater touted as key to revitalization,” El Paso Times, March 24, 1992.
  21. “Risky revitalization strategy the best (only) plan city has,” El Paso Times Editorial, September 24, 1992.
  22. Emily Jauregui, “Plaza renovation not critical part of Downtown plan, Francis says,” El Paso Times, January 29, 1994.
  23. Patrick C. McDonnell, “Reopening Plaza Theater Downtown tops mayor’s to-do list,” El Paso Times, January 23, 1999.
  24. Vic Kolenc, “Plaza Theater gets grant, loan for repairs,” El Paso Times, August 30, 2002.
  25. Mona Charen, “Careless Fed Spending Makes Deficit Sora,” Tyler Morning Telegraph, September 17, 2003.
  26. Maribel Villalva, “Renovated landmark debuts today,” El Paso Times, March 16, 2006.

1 reply »

  1. So are you happy or sad that the Plaza was renovated? Personally, it upsets me when public projects like the Children’s’ museum are co-opted and, effectively, privatized meaning that funds will be directed toward politically favored contractors and operations taken out of the public domain. Right?

    That said, my limited experience with folks at EPCF has been positive. There are some really fine people working there.

    Like

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