El Paso can go ahead with plans to issue $50 million of revenue bonds for a downtown baseball stadium after a favorable ruling in a bond validation lawsuit.
Travis County District Court Judge Tim Sulak said in his declaratory judgment that the city complied with all applicable state laws in asking voters to raise the hotel tax to support the bonds.
"The authority to issue, and the actions taken to obtain, public securities are legal and valid," Sulak said after the two-day trial in Austin.
El Paso filed the suit in January to resolve any questions over the proposed bond financing after several petitions were filed seeking a public vote on the plan to raze City Hall for the project.
Sulak's ruling was a definitive decision that clears the way for the bond-financed ballpark, city manager Joyce Wilson said after the trial.
"The bonds are valid and the stadium is valid," she said. "We have full legal clearance to proceed."
Sulak said his ruling was limited to the bonds and not whether the council could or should put the decision to raze City Hall to voters in May.
Stadium opponents have 30 days to appeal the decision, but Sulak stipulated that an appeal must be accompanied by a $1 million surety bond.
Voters in November approved an increase in the hotel tax to support an estimated $50.4 million of bonds to build a 9,000-seat stadium on the site now occupied by City Hall.
The city council rejected a proposal to put the stadium question on the May 11 ballot, but will consider another request for an election at next week's meeting. Even if it is on the ballot, the city plans to demolish City Hall in April before the vote would be held.
Some municipal departments have already moved from City Hall to other buildings in downtown El Paso. The building is to be closed March 31.
The council has authorized spending $2.5 million to tear down the 10-story City Hall to make way for the ballpark and $3.9 million for the move. The city will also spend $18.5 million to remodel two buildings.
The new ballpark will be the home of the relocated Class AAA Tucson Padres. The team was acquired by a group of El Paso area investors last year and will be renamed after the 2013 season.
The ballpark is to be ready for opening day of the 2014 minor league season.
The bonds backed by the hotel tax will be issued by the City of El Paso Downtown Development Corp., which the council created in December to finance and build the stadium. The debt will be issued as special obligation bonds supported by annual city appropriations to the corporation from the hotel tax collections and a share of stadium revenue.
El Paso is rated AA by Standard & Poor's and Fitch Ratings, and Aa2 by Moody's Investors Service. The city's outstanding debt includes approximately $600 million of GO debt and $217 million of certificates of obligation.