State Incentives

State Incentives Presentation

January 23, 2017 presentation to City Council on state incentives.


Frequently Asked Questions about State Incentives


Why is the City of El Paso is studying the feasibility of locating the Multipurpose Performing Art and Entertainment Center (MPC) within 1,000 feet of the convention center?

  • The City is interested in taking advantage of state incentives (rebates of the state’s portion of sales taxes) that would serve the convention center and its convention center hotel.  These state incentives are allowed under Texas House Bill 1964 and the state’s Tax Code, Section 351.001
  • Locating the MPC within the 1,000 feet of the convention center would allow the City to incorporate the state portion of the sales tax associated with the MPC in the amount rebated to the City through the 1,000 feet capture component of the State Convention Center Hotel Incentives.
    • The state incentives may be used toward various projects such as the MPC and or any additional public improvements that can enhance the convention center campus, comprised of the convention center and its convention center hotel.

 How would the state incentives be generated?

  •  Revenues, or the state’s portion of sales taxes, would come from the businesses located within the 1,000 feet of the convention center property line.
    • The footprint would include the convention center hotel and any ancillary development that may include a Multipurpose Performing Art and Entertainment Center.
  • The incentives are provided to the City in the form of a rebate. The rebate is generated by the Hotel Occupancy Taxes (HOT) and Sales Taxes associated with the individual projects.
    •  For the Paso del Norte (Camino Redevelopment); the hotel has been designated as a project eligible to receive the 1,000 feet capture of the state portion of the retail sales tax in addition to the above-stated rebate sources. The amounts rebated to the City are to be used by the City on projects (including ancillary facilities) and/or obligations associated with the convention center and the convention center hotel.
  • The law would allow the City to capture the state’s portion of sales tax revenues for up to 10 years.
Why is the proximity of the MPC to the Convention Center important?
  • When the City of El Paso is ready to seek state rebates from the Texas Comptroller’s Office for the convention center hotel, the project would be presented as a convention center campus development featuring a convention hotel and it could include a multipurpose center.
  • Locating the MPC within the 1,000 feet of the convention center would allow the City to incorporate the state portion of the sales tax associated with the MPC in the amount rebated to the City through the 1,000 feet capture component of the State Convention Center Hotel Incentives.
  • In addition, proximity to the convention center will lend credibility to the argument, if made, that the MPC may function to provide direct and indirect benefits to the convention center and the convention center Hotel. 
    • The MPC project would be considered an amenity, or ancillary facility, that is in support of the convention center campus.
  • The proximity of the MPC to the convention center would have to be at a location that is reasonable enough to show the State Comptroller’s office that it is an amenity in support of the convention center campus.

Is there an estimate showing how much money in terms of state’s sales taxes could be captured by El Paso under this proposal? 

  • Extremely conservative preliminary projections based on historical state sales tax data from the Texas Comptroller’s Office indicate El Paso could capture a minimum of $25 million in state sales tax rebates over a period of 10 years to be used on projects that would support the convention center and the convention center hotel. This amount is above and beyond the amounts already earmarked to support the convention center hotel project(s).