Why Is Leeser Asking to Cancel TVO Contract?

Today’s city council meeting has an item on the agenda asking for the termination of a real estate management contract between the city and TVO North America. This item caught my attention because it was added to the agenda by Oscar Leeser and there is no back up material. It also appears to be calling for the termination of a three year contract about half-way through the contract term. More importantly the possible termination of the contract comes after a change in leadership at the city’s helm and after a real estate portfolio was created asking the city to sell about 40 city-owned properties.

According to the City Council Agenda Department Head’s Summary Form of May 29, 2012, the city’s staff recommended awarding a Real Estate Management Services contract to TVO Management Services. There were two components to the contract. The first was labeled “Brokerage Services” and the second was labeled “Consulting and Support Services”. The brokerage services were expected to be paid on each completed real estate transaction at a 4% commission rate. At this point is unclear whether any property was sold by TVO.

The consulting services were to be paid on an hourly basis for a “recommended annual amount of $300,000”. The contract was for three years. As you know I can’t depend on the city providing me timely and accurate answers to my open records requests therefore I’m left with finding information via other sources. Because of this it is difficult at this point to determine whether TVO sold any property on behalf of the city. However, we do know that TVO compiled a portfolio of city-owned property.

According to the presentation made to city council at the time the contract was awarded, the City of El Paso owned “approximately 4,562 properties”. These properties did not include those properties managed by the El Paso International Airport. Included in the property portfolio were about 104 leases in which the city was either leasing the property or was acting as the landlord.

The motion to award the contract to TVO was made by Emma Acosta and seconded by Cortney Niland. It carried unanimously on May 29, 2012 and it was for three years.

TVO Management’s CEO is Russell Vandenburg. You might remember that his company led the city’s relocation of its administrative offices prior to the demolition of city hall. In August of 2012, Vandenburg stated to city council that his company had looked at 15 buildings before deciding on the three buildings the city moved its operations to. Vandenburg is also a member of the Paso del Norte Group (PDNG). He was also Redco’s leader prior to the merger with the PDNG.

According to an El Paso Inc. article on July 21, 2013 by Robert Gray; TVO had put together a database of city owned property. Gray wrote that the city had identified 92 parcels of downtown property. The article further states that TVO was proposing that the city sell 30 to 40 properties for an anticipated $5 million for the city.

After that I could not find any more mention of any activity taking place in regards to the proposal to sell the 30 to 40 city-owned properties. As far as I can tell, TVO has put together a portfolio of city-owned property that city council has access to and has proposed selling some of the property.

Instead of an agenda item selling unneeded city property, city council instead will be discussing item 10B terminating its property management agreement with TVO. Without any back up material it is difficult to understand what has precipitated this action however I expect more will be revealed at today’s city council meeting.

Keep on eye on this one, it might get interesting.