Arena games

City Hall finds $35 million--and toys with turning Reunion into a reflecting pool

Finlan and Venable went down to the courthouse and made copies, then faxed them to us. Those 26 pages dovetail nicely with the ream of documents we reviewed last week, providing the first detailed explanation of where the taxpayers' $35 million will come from.

It's a figure, by the way, that many City Hall staffers have been marveling about all summer--especially since it's budget time, and department heads are being given their annual lectures about how there's not enough money for libraries, pools, potholes, animal control, landscaping, playground equipment, rec centers, or salaries.

The basic arena game plan, of course, is to rob Peter to pay Paul--find money earmarked for some other public purpose and divert it to a pet project, preferably without the council's knowledge. This is a favorite trick of the Ware regime--one it employed last year by siphoning $50,000 for the secret arena study out of the construction contract for the Dallas Convention Center expansion.

Well, guess what? That's the same game plan--on a vastly expanded scale--that's now on the table to produce $35-$48 million to help build the arena.

What it amounts to, quite frankly, is a willingness on the part of Ware--and the majority of the city council, which approved this lame-brained idea two months ago--to strip the Dallas Convention Center. The plan would foolishly jeopardize the center's future, when we've just spent $112 million upgrading the facility to assure its viability as a long-term tourist and business draw for Dallas.

The first thing Ware is proposing to do is refinance all the convention center debt--which includes Reunion Arena and its money-losing parking garage; the city rolled those projects into the convention center debt package in a previous refinancing.

Interest rates are lower now than when we refinanced last time. So if we refinanced today, it would lower our annual debt payments, allowing us to run out and borrow more money. (It would also allow us to simply save some money, instead of borrowing more--but we're certainly not about to do that.)

The plan is to borrow $35 million of the city's contribution on the $141 million arena, boosting our total convention center debt to a whopping $371.6 million.

The annual debt service on that $35 million would be $4.9 million a year, city staffers advised the council in the executive-session briefing packet; as is now the case with Reunion, if revenues from the new arena didn't cover the debt service, hotel-motel and alcoholic-beverage taxes would do so.

There are several problems with this scenario.
For one thing, if we do this, our borrowing capacity on the convention center will be maxed out. In other words, the city will not be able to obtain money to further expand or upgrade the center until at least 2010. This is a big problem. That's because large convention groups, now booking for the late '90s, are already turning up their noses at our place because only half the building is spiffy and new. The other half is comparatively old, dingy and outdated, and nobody wants to be in it.

"As you are aware, we are receiving a growing number of customer complaints on the condition of the existing facility," Frank Poe, director of Convention and Event Services, wrote in a March 7 memo to Assistant City Manager Mary Suhm, reviewed last week by the Observer. "The general tone of these expressions of concern is that significant renovations are a must if the center wants to maintain its current volume of business." Poe then proceeded, in no uncertain terms, to list the "most pressing items requiring action" at the convention center. "Priority One" items included $1.8 million in roof replacements, $668,520 in seat repair, $325,000 in leak repairs, and $194,000 in ballroom wall replacement.

Poe had a way to pay for all this. He wanted to use leftover construction funds from the 1994 convention center expansion. Poe knew that these monies are available; he also knew that they were in imminent jeopardy of being spent for the arena.

Poe knew his bosses were eyeing the convention center money because back in December, Ware's arena project director asked the public works department to report how much money was left over from the expansion. The answer: $3.75 million, according to a December 21 memo.

Poe had other requests, too.
He wanted about $2 million from the city's capital reserve fund for some "Priority Two" projects, including an upgrade of the meeting rooms, corridors, and restrooms in the old part of the convention center. He also told Ware that beyond all those immediate, urgent needs, it would take $15 million more to bring the entire center up to the standard of the 1994 expansion.

On March 3, public works interim director Jill Jordan weighed in on the issue. In a memo, she reminded Assistant City Manager Ted Benavides that, while City Hall arena promoters were licking their chops about the unspent money, the convention center "could be in jeopardy" if the funds weren't saved for finishing the needed improvements there.

Silly department heads.
Ware has clearly made the call that the convention center's future success is worth risking for the new arena. Because in the June 14 executive briefing packet, Ware claims that--on top of the $35 million--$2.5 million in "remaining convention center construction funds" is available for the arena, as is $10.4 million in "capital improvement funds."

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