Another view

What City Hall isn't willing to hear about the new arena

So what's a city to do?
Rosentraub put it succinctly at the end of a two-hour interview over coffee at the Melrose Hotel. "If Dallas is really going to...be crushed by the teams leaving--if everyone has to be on Valium because of it--that's a whole different issue. But if the issue is economic impact, this is a no-brainer. Let them go. You'll make money if they go. Because you'll spend fewer taxes and do something better with the money."

Clearly, no one in Dallas is getting that message. And unless there's a spontaneous taxpayer revolt over this issue--the likes of which this city has never seen--this city council will ignore the economic facts and build an arena.

What, therefore, is Rosentraub's advice to citizens?
Rosentraub told the planning council something he's told lots of other cities that find themselves in arena wars with sports-team owners. Instead of giving away the keys to the vault, like most cities do, he says, they should strike a sensible bargain. Make a good, sound business deal. After all, the private sector does it all the time.

"Categorically, I can tell you that arenas can be built without any public dollars whatsoever," says Rosentraub.

Indeed, after three years of contentious haggling, the owners of Philadelphia's hockey and basketball teams put together a deal late last year for a new $216 million sports arena that will be built with a taxpayer subsidy of only $6.5 million--and that's a loan at 3 percent. There's a state grant of $20 million, too, but the private sector is footing the rest of the bill--$46 million from the hockey team owner who owns the city's current arena, and $145 million from three insurance companies who have clients seeking long-term investments. A local bank has also paid $40 million in a 29-year agreement that will put the bank's name on the building and a bank branch inside.

One other attractive element of that deal--the old arena, located next door, is being preserved and will be used for concerts, circuses and other entertainment shows. Both arenas will be privately owned and operated. (The Dallas City Council has never been briefed on that arrangement--a taxpayer dream.)

But if Dallas officials are determined to make the public foot most of the bill for a new arena, then Rosentraub has some specific advice. Since the value of a sports franchise increases greatly after a new arena is built, Rosentraub suggests that cities offer to pay "50 percent of the cost of the stadium in exchange for 50 percent of the increased value of the sports franchise." That way, if and when Don Carter sells the Mavericks, the city gets half the money--and if and when Don Carter wants the city out of his basketball business, he'll have to pay the city half the value of his team to get them out.

"So if you negotiate with the Mavericks, say 'we'll build you an arena--we'll split it with you--and we'll take half the value.' And that's a deal common in business."

Domingo Garcia was so impressed with Rosentraub's idea that in a closed-door meeting of the city council arena negotiating team earlier this month, he presented the idea to his fellow council members and City Manager John Ware. Who promptly dismissed it. "John looked at me and said, 'Domingo, I tried that, and it dropped like a lead balloon in terms of a response from Carter.'" End of discussion.

Garcia is not giving up. Two weeks ago, he wrote Ware a memo formally asking him to bring Rosentraub back to Dallas to brief the city council directly--if Ware wanted, he could even make it a debate and include another economist with opposing views on the subject.

Rosentraub told me last Sunday that he hasn't been invited yet--so far, he's gotten a call from Assistant City Manager Ted Benavides, who wanted a copy of his planning council speech, which Rosentraub dutifully faxed him. He even turned over the names of other economists who could engage in a spirited debate with him. He hasn't heard back.

Rosentraub's cautionary words are getting out, though. (No thanks to the News, which interviewed Rosentraub at his request--he's collecting material for one of his books--but gave him only six paragraphs at the end of a front-page puff piece on what the loss of the sports teams would do to the West End.)

Councilman Bob Stimson got a videotape of Rosentraub's speech, and he has since loaned it to councilmember Donna Blumer, who viewed it and told me last week, "The numbers Rosentraub used were devastating--I was very impressed."

She was so impressed that she told Mayor Bartlett that she believed the entire council could benefit from a visit from Rosentraub. Bartlett responded to that and other cautionary arena comments, says Blumer, by "calling me Diane Ragsdale"--the former councilwoman. "He said that she used to impede progress with the force of her arguments. That really took the cake."

Bartlett can keep squealing--he's already busy trashing Rosentraub to anyone who will listen, unwilling to give a platform to an intelligent advocate of a view that differs from his own. But one thing is certain.

"If you invite me, I will come," shrugs Dr. Mark Rosentraub.

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