April 19, 2018 Dear Mr. Rodriguez: | want to begin by applauding your effort to make a constructive effort to resolve a serious issue facing the City of El Paso. | am pleased the Mayor has passed this responsibility on to you. Much of what you have suggested is sensible, but you are taking some positions that are simply wrong and some that are unacceptable because they reflect the City’s failure to embrace an active investment role in preserving important historic sites. Before we begin to enumerate and discuss the issues, we think it is important for the City to give serious thought to a seminal question. Is the City intending to build a sports arena in the area designated as the MPC on the drawings given to me by Mayor Margo? If not, what type of facility does the City intend to construct? We think it is obvious that a sports arena as described in the RFQ would require far more space than what appears to be available based on the drawing. The point is that a M.P.C that is designed and built as a true performing arts and entertainment center would be far less expensive and much more consistent with the historical character of the Duranguito neighborhood. These are questions that you should ponder. The answers to these questions will clearly define the future of the properties that are identified below as worthy of preservation. Importantly, let's identify the salient points of agreement. First. 1am very familiar with the work of Ford, Powell & Carson. | served on the THC with Chris Carson and many of my good friends have assisted in projects with Mr. Moore’s firm, such as the recent work on the Battlefield of San Jacinto. If permitted, we believe both firms will provide credible insight into how to preserve the archeological assets in Duranguito and feel strongly the 325 S. Santa Fe Street site has the potential to reveal much about the early history of El Paso. Second. As for the Trost Fire House, we are agreed that it can be used for a purpose other than a fire house as long as the restoration complies with the requirements of the THC and National Parks Board and attention is paid to its history as a working fire house of the 1930s.Third. We are gratified by the City’s willingness to explore ways to repair the buildings which were damaged by the contractor hired by the owners. We need to find ways to require the owners to invest in repairs to preserve the value of these properties. Forth: We are also very pleased to learn that the City will join with the County to have Duranguito and other areas designated as a National Register District. Fifth: We agree with all the following as you presented except what happened to 320 San Antonio: 1. 306 W. Overland (The Mansion) - The City owns this building. It should be put up for sale with a minimum bid amount covering the cost of purchase. 2. 311 Chihuahua is a vacant lot that serves as public parking and access to Fire Station 11. The City will need to retain ownership of this lot so long as Fire Station 11 remains operational. 3. 321 Chihuahua is a vacant lot. The lot should be put up for sale with a minimum bid amount covering the cost of the purchase. 4, 325 Chihuahua currently a parking lot. The City could retain this as a parking lot and /or put it up for sale with a minimum bid amount covering the cost of the purchase. 5. Trost Fire House - The City would retain the structure and nominate it for NHRP designation, continuing with a public adaptive re-use. Also, regarding your suggestions on 325 Santa Fe, (adjacent to the Trost Fire House) we agree that this property should be incorporated into the MPC footprint and that the City should move ahead with the demolition of the existing small structure (80% of the property is a parking lot). The City should also include this property into the local H-Overlay to expand the Historic District. This would ensure any future use of the property is in conformance with the Historic District and more importantly that it does not detrimentally impact the Trost Fire House.Sixth. We agree on the response to both Chihuahua Street and Overland, subject to how the closures will function. Now we can deal with the matters on which we differ, the most critical of which is the City’s position on the H-Overlay. We want an H-Overlay imposed on the area described in the citizens’ petition. This area encompasses the whole of Duranguito, west to Durango St. We believe that the discussion about the H- Overlay has become confused. We have always asked that an H-Overlay district be created. In your letter you seem to think that we are suggesting that the City impose an H-Overlay on specific properties. We are not requesting that specific properties be given an H designation. That is not what is needed. Section 20.20 040 of the City Code gives the City Council the authority to designate “districts” as historic landmarks upon compliance with the procedures set out in that section. There are already a number of Historic Districts in El Paso. For example, just drive on Montana Avenue near downtown and you will see the sign for the Montana Historic District near the International Museum of Art. Requests for the imposition of an H-Overlay can be made by the City Council or by any member of the public. Under our plan, the “district” covered by the citizens’ petition would be given an H-Overlay designation. This same area would also be designated as a National Register District in order to enable owners of Duranguito properties to apply for federal and state tax credits. The H-Overlay designation would prevent the demolition of buildings in the district without compliance with the provisions in the H-Overlay ordinance. This is a critical component of our plan and is one that must be implemented by the City Council. Additionally, your statement that the City is not eligible for tax credits is not irrelevant to this discussion. We know the City that cannot use tax credits, but private parties who purchase these properties from the City can use tax credits. We strongly believe that private entrepreneurs will be incentivized to purchase the properties because of the tax credits. A National Register District designation would transform the entire area into a grand opportunity for economic development. Under the County’s plan, nearly ‘one thousand structures in downtown and the adjacent barrios would be eligible for tax credits of up to 45% of the investment, including the Duranguito. Over time this would likely generate hundreds of millions of dollars of investment in El Paso with minimal cost to the City.So the other issue is the properties which the City owns. We are assuming that the $15,000,000 mentioned in your letter is the amount that the City is obligated to pay to acquire properties still under contracts of sale, but that may include costs that exceed just the property purchased. At the outset we want you to remember that the City’s decision to acquire properties in Duranguito with bond money was after it was put on notice in April, 2017 that bond funds could not be used to build a sport arena and after the City filed its bond validation case on May 2, 2017, but before the case was decided by trial appears to be imprudent. The City purchased properties at 301 W. Paisano; 306 W. Overland; 321 Chihuahua; and 224 W. Overland before it knew whether the court in Austin would allow bond money to be used to build a sports arena. Now, we know that the outcome of that litigation is a ruling that the City cannot use bond funds to build a sports arena. Even though the case is still in the appellate court, the City’s improvident timing of these purchases has created a problem that the City can resolve by selling these properties for the best prices obtainable on the market. This may take time, but is certainly realistic given development of the MPC. We think that it will be worthwhile to comment on our letter of April, 9 at this point. We have quoted from certain parts of your letter for purposes of clarity: Second Paragraph, page 1: “At this time though, we cannot recommend to you or the City Council that we accept all their terms (referenced as ‘reasonable compromises”) that require the City to spend funds to acquire, restore and operate the proposed preserved buildings. The City is fiscally constrained to spend funds only for a public purpose.” “We are not asking the City to buy these properties, but if it must because it has entered into contracts that cannot be unilaterally terminated, then that obligation should be met. Further, we are not requesting the City to restore or operate the preserved building. That will be the obligation of the new owners. Clearly, the City can spend the money for the purchase of these properties because it would be for a public purpose, especially if this is a historical district and there is a plan for development, which could easily be formulated. It happens frequently in cities across Texas - San Antonio and Galveston are but two examples. We assure you there are many experts who can provide you guidance if needed.”Second paragraph, page 1: “In order to get to the final resolution, we need and are willing to work with a private entity to provide the capital funds and operating funds for the acquisition, preservation and operation of the buildings.” “The City should either terminate the contracts of sale, if it can legally do so, or complete the purchase of these properties and put them up for sale to private parties.” Third paragraph, page 1: “The costs to complete the acquisitions and restoration of those properties could cost the City no less than $15 million dollars, plus the ongoing operating and maintenance costs. These are above and beyond the $180 million dollars approved by the voters for the MPC. Mr. Bryan and his team have established a vision for the neighborhood; there is nobody better to help their vision become a reality.” “There is no reason that 15,000,000 of this bond offering cannot be allocated to historical preservation. It is clearly a public purpose. What we do know is that the language of the bond offering did not mention a sports arena which | am certain has a price tag higher than $15,000,000, but let’s be clear, all the City needs to do is either terminate the contracts, if it can legally do so, or buy the properties. The new buyers will restore, maintain, and operate once the H- Overlay is completed.” This is a good point to visit about the vision part. To clarify, we do not oppose another sports venue for the city of El Paso, if that is what its citizens express their willingness to support, but we do oppose a sports arena in one of the most significant historical areas of El Paso. The city’s downtown needs a revival and the question is what is the best initiative to ensure long-term economic growth, an increased property tax base, and heritage tourism for a city which has the lowest such visitation in the State. It is our judgement, a sporting venue of the type suggested is not a wise City investment, especially when compared to the economic evolution that a historicaldistrict in downtown would produce. It could be transformative. Rather than relying on subsidy from HOT tax, investors would bring the capital, take the risk and share a large measure of the reward with the City. Your HOT tax is one of the very highest in the state. The current baseball field, even though it is an attractive addition to the downtown, is doing little to encourage overnight visitation or fine dining, which is what the HOT tax was designed for. A developing historic district would attract the type of patronage that would translate into increased overnight visitation and meaningful growth in dining and store revenues. It could easily rival the La Villita in San Antonio. The area could become a mecca for those seeking a truly Mexican dining experience, an emerging fashion district and should sponsor a free trade zone and safe corridor for United States day visitors to cross the border. If the City combined the MPC with a designed plan for restoring the historical district, the tax base, would be increased economic rejuvenation to the downtown and in surrounding communities would begin, hotel occupancy and restaurant patronage would rise, and the cost of the entire $180,000,000 bond project would be reduced while the City gained world-wide recognition for blending the unique structural heritage of E| Paso with the inspiration of the High Desert landscape. This is an opportunity that will never knock again, if the City does not open the door, and show the world what El Paso has to offer. A few final reflections: 1, 215 W. Paisano. We have assembled evidence of the historical value of this property and will be pleased to share it with you. The recent County survey identified it as a contributing property because it was erected in 1914, with a later post-war addition. We believe that the City should take a hard look at this evidence before dismissing this property as essentially worthless from an historical viewpoint. 2. The Chinese laundry building at 212 W. Overland plays an important role in El Paso’s history as pointed out in my last letter. Based on reports from experts, it appears that dismantling and reconstructing it in another location is not financially or practically feasible. We are convinced that the City must leave the Chinese laundry building in place, although a solution would be to functionally integrate it into the MPC project, while displaying inside early Chinese historical objects and photos from the period as a tribute to Chinese importance in the early history of El Paso. It would be a worthy attraction toChinese visitors from around the world. The building should be landmarked by the Texas Historical Commission in order for its history to be visible to the public. The City should seriously consider preserving 216, 220 and 224 W. Overland Ave. and perhaps integrating them into the MPC project as well We can assure you that the City stands to earn a far better return on the investment plan we are proposing, than continuing to deal with lawsuits. A settlement will bring order to chaos and allow all the parties to devote time and money to productive endeavor. In our judgment, an investment in El Paso’s incredible historical heritage will yield an enduring return and favorably transform the entire profile and importance of El Paso for tourists and citizens alike. This is a great opportunity for the City to assume a seminal role in historic preservation by partnering with developers to bring important industry to the area as owners of these properties. We cannot imagine that these precious historical resources would not meaningfully complement the MPC. Very truly yours, peor J.P. Bryan cc: Woody Hunt