August 1, 2007
The El Paso Public Service Board wants to sell almost 5,000 acres of land in Northeast El Paso to Hunt Communities, the successful bidder in an unprecedented process that will provide almost a generation’s worth of land north of Fort Bliss to a single purchaser.
The sale still must be approved by City Council, of which Mayor John Cook said: “The Council can accept the bid, which was the highest, or reject all bids.”
The PSB is scheduled to consider the bid Wednesday (Aug. 8, 2007) and the City Council is scheduled to consider the sale as an ordinance to be introduced Aug. 21, and possibly voted upon two weeks later.
The bid process was controversial, with the El Paso Association of Builders, of which Hunt is a member, arguing that the sale would prevent smaller builders from participating in the growth expected to occur because of the influx of troops to Fort Bliss.
Proponents of the sale said it would allow for more consistent development, because one master developer would lay out the broad outlines in conjunction with city planners and following a master plan created by the PSB. So, for example, roads would connect, something that has not always happened in piecemeal or under-regulated development in El Paso.
"I think it’s the best thing that ever happened to Northeast El Paso," said El Paso Water Utilities General Manager Ed Archuleta. "I think 20 years from now people will just stand back and say 'Wow, that was a great decision.'"
Also, all the major pieces of a community – the drainage, the schools, fire stations, parks and other public assets – would be carefully placed according to the master plan. [npt background] [master plan background]
“We are pleased the Public Service Board selected our bid in its efforts to bring quality growth to El Paso’s northeast. This is significant to our city, because it means that more single, large areas of land can be developed in a true master-planned sense,” said Gary Sapp, chairman of Hunt Communities, in a prepared statement.
“In our case, this will result in the use of Smart Growth guidelines and ultimately, better, more sustainable neighborhoods and amenities for El Paso. Hunt Communities is pleased to continue our investment in our home town, and we look forward to working with our many local consultants and homebuilders on this great opportunity,” Sapp said.
The sale will net more than $100 million at $27,132 per acre if approved by City Council.
Cook did sound a note of caution.
“My understanding is that there were only two bids, which was a little disappointing. One of the things I’d like to do as member of the PSB and as mayor is sit down and find out why we didn’t get more bids and also make sure Hunt will follow through what we wanted done when we came up with the idea of a master planned community with one developer,” Cook said. “We wanted something El Paso had not had before. Whether we’ll get that, I don’t know.”
However, he said, in a sentiment echoed by other observers and participants, “we should all be happy that an El Paso company got the bid.”
Archuleta said "we got a great price fo the land, it was very competitive. Had it not been for the current downturn in some of the markets in the U.S., we would have had as many as six (bidders)."
Of the ten teams that submitted an RFQ, eight were interviewed in April, and six were determined as qualified. They were Cousins Properties, based in Atlanta; E2M/EPT, based in Dallas and El Paso; Forest City/Covington, based in Cleveland and El Paso, Hunt Communities, based in El Paso; Scarbrough Lane Development, based in Dallas and El Paso; and Southwest Land Development, based in El Paso.
The two bidders were Hunt and E2M/EPT. The bidding started at $20,923.
Doug Schwartz, CEO of Southwest Development, said his company, which considered but did not bid, would watch developments closely.
“It will be important that everybody in the community keeps an eye out to make sure the deal happens the way it was supposed to, and isn’t renegotiated after the bid,” Schwartz said. He said the restrictions placed on the sale, including the requirement to set aside about 1,000 acres of open space, led to the decision not to bid.
“Everybody who either bid or didn’t bid did it with the intentions this deal was laid out and that’s the way it was going to be. It wouldn’t be a good thing to have this renegotiated when everyone went into this on the basis of what was put up,” Schwartz said. “We will be watching to make sure this happens the way it was supposed to.”
The bid RFQ, which lays out the requirements for developers, are attached to the bottom of this story in three parts. The first part is the bid requirements and Exhibit A. The second is Exhibits B to F, and the final part is Exhibits G to H.
"This is a plan. Now they have to drill down and come up with exactly how they’re going to set this thing up. But they cannot deviate (from) the infrastructure, the timetables, etc," Archuleta said. "We’re talking about a plan developed with a lot of input from everybody .. all the stakeholders we could think of, they were all invited."
The project, he said, "will satisfy demand for land in that part of town, it will be well done, it will provide work for local builders and engineers. Hunt will do a good job, and there's no reason to believe they won't follow the covenants."
Ray Adauto, executive director of the El Paso Association of Builders, said that the 4,800 acres is a huge amount of land, equal to a large portion of West El Paso, “from Franklin High School to Sunland Park.”
He said it’s up to Hunt and the community to make the development process work.
“We understand the economics of the situation of the bidders and congratulate those who took parting the bidding process and hope that things work out well,” Adauto said. “Each builder will now have to make the decision to purchase land from them like they do every day, whether it’s with this developer or any other developer.
“The great news about being a capitalist is you can decide to (purchase) or not.”
He did say he wanted to see the provisions for affordable housing carried out and development takes place.
In an Open Letter on the master-planning issue, Woody Hunt wrote that “What has been widely demonstrated elsewhere is that affordable housing and sustainable communities are not in conflict, but rather can be mutually supportive.” [link]
Some of the other large questions to be answered include how the Master Plan approved by the PSB and city will relate to the city’s subdivision ordinance, which now is in the process of being rewritten.