Arena games

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

It's summertime--and the living for a City Hall reporter is easy. Primarily because we haven't heard much about the new sports arena. But don't get your hopes up. No news is not necessarily good news. It's just that we're in something of a stall mode right now.

The hangup lies with the arena's three main players--Mavs owner Don Carter, Dallas Stars owner Norm Green, and millionaire oilman Ray Hunt. These three hustled the arena onto the city's agenda last year, but now--oh, sweet irony--their greed and egos are getting in the way of the goal line.

Carter says he's willing to loan some of his millions to the project, but he wants his money repaid first, before the city covers its debt--which the city's bond lawyers have said the city can't do.

Carter wants Hunt to relinquish all the parking lots and air rights around Reunion Arena. Hunt, who has them tied up for 100 years in a sweetheart deal he cut with the city two decades ago, likes things the way they are.

Hunt, of course, instructed the city staff to put the new arena on his land last fall, shortly after the taxpayers spent $500,000 picking out a different site. Now, though, he doesn't like the pittance the city is offering to buy it.

Green, meanwhile, has been shopping his financially troubled hockey team for months. Though heavyweights--Carter, Ross Perot Jr., and mega-investor Tom Hicks--are waiting in the wings with open wallets, Green appears to be holding out for some lesser-known financier willing to overspend for the team.

And the folks in charge at City Hall lurch about, tentatively reacting to all three of these goons.

They wait for the Stars to get a fresh life and enough cash to invest in an arena. They make overtures to Hunt, who sits high above downtown in his oil company office, turning down with a wave of his pen the offers he considers insulting. They meet with Carter, who is naturally suspicious of what great deals the city is cutting with Hunt and Green.

With any luck at all, these three rich guys, through their own shortsightedness and self-absorption, will kill their own project. Until that happens, though, we're saddled with the pursuit of this gold-plated, tax-guzzling mother.

Since the news blackout is still in effect throughout City Hall--shut-up orders to city employees, closed-door briefings to the council, documents prepared (occasionally) for council eyes only, though never left in their hands for fear of leaks--the Observer decided to get what new information we could about the arena through the only means available, the Texas Open Records Act. The last time we did this--at the end of last year--we pried loose a boatload of documents, more than 15,000 pages of them, from the oh-so-reluctant hands of city staffers, who, we quickly deduced from our bedtime reading, were wildly out of control in their lust to build something that Hunt, Green, and Carter could easily build themselves.

This time the paper pickings were slimmer--understandable, given that dozens of supposedly "crucial" negotiating deadlines have come and gone, the city council has been busy with elections and summer vacations, and the Three Wise Men are more interested in one-upping each other than building their palace. City Hall also is much more careful about what it commits to paper--after all, last fall's treasure trove of documents ended up costing the city's number-two man, Cliff Keheley, his job.

Still, among the 7,000 pages of arena documents generated since our last sweep of City Hall, we found intriguing material. Some of the stuff was eye-opening, some exasperating, some downright funny.

We share the best of it with you below--for your edification and amusement.
That Ray Hunt. What a card.
He's owned parking Lot E--located between the Reunion Arena parking garage and the convention center--for 23 years.

Last fall, when Hunt demanded that the city trash its consultants' site recommendation in favor of Lot E, he not only got it done immediately, he managed--as he always does--to keep his name out of it.

He did this by persuading the dimwitted city staff, who then easily persuaded the dull-bladed council and The Dallas Morning News, that he simply didn't own that land any more. He had given it to a family trust, he explained, and the non-profit Communities Foundation of Texas was overseeing the trust--totally removing the land from his control.

Right.
Last week, we came across a letter in the City Hall files. Not in City Manager John Ware's files, mind you--where there should have been a copy--but in the files of the city's property management staff, out in the hinterlands of Oak Cliff. The letter, dated May 23, 1995, is written to the city manager.

"Dear Mr. Ware:
"I would like to acknowledge receipt of your letter of May 17, 1995 and the draft agreement accompanying the letter relating to Lot E. Unfortunately the draft agreement is not acceptable for a host of reasons, and I feel that providing specific comments on it would be counterproductive to our mutual desire to have the new sports complex located in downtown Dallas.

"I would like to reconfirm that we will play whatever supportive role we can with respect to the sports complex remaining downtown. As I have mentioned in previous correspondence, we have some ideas which we think could have as an end result the City acquiring Lot E in a method which would minimize or eliminate the amount of cash required and also meet various third-party requirements for the facility. We are prepared to meet whenever the City and/or the Mavericks would like to visit further on this subject.

"Sincerely, Ray L. Hunt."
We may, based on 23 years of past pecuniary behavior, assume that Hunt's "idea" goes something like this: "I'll give you Lot E (all of 7.6 acres). In return, you give me all your downtown, city-owned land--including City Hall, the convention center and the J. Erik Jonsson Central Library. Oh, and don't forget all those lovely air rights."

Earth to Hunt: Be like a Bass (as in Fort Worth) and donate your sorry-ass parking lot, pal.

Earth to City Hall: When he doesn't, condemn it.
Georgia A. Hardy, a Children's Medical Center employee and a resident of East Dallas, is some kind of pistol.

Last February 20, the 45-year-old wrote a letter to her councilman, Craig McDaniel, who had just announced publicly that he had no intention of allowing the taxpayers to vote on the arena. It reads:

"McDaniel: I see you have chosen to support the latest City Swindle, this time a $400 million sports arena to replace the one we haven't yet paid for so the lazy rich can hang out in comfort. If you want this, you pay for it. If the rich want this, they can pay for it. If the team wants it, the team can pay for it. Stop swindling me you lazy bum. I'm not in the mood to further your career by footing the bill for your handlers.

Hoping you find yourself unemployed, destitute and homeless in the near future, I remain, Vigilant, Georgia Hardy."

McDaniel, a tepid sort who, in 18 months, has added absolutely nothing to the arena debate, responded:

"Dear Ms. Hardy: Thank you for writing me regarding the proposed new sports arena. I believe you have misinterpreted my position regarding this issue.

"I have not 'chosen to support' the project on the basis you stated. I support private funding of the arena with city participation limited to what we would provide other businesses relocating or expanding in Dallas. Sincerely, Craig McDaniel."

What's the matter, Georgia? Don't you think the city offers every relocating or expanding Dallas business $35 million?

It should be duly noted here that some of our elected officials--unlike McDaniel, who was nice enough to share his nasty constituent letter with us, like to play fast and loose with the Texas Open Records Act.

Either that or they somehow get no constituent mail on the hottest topic of the day. Either that or they find it boring to keep files on a controversial and expensive public project.

"Information found in the files for council members Domingo Garcia and Charlotte Mayes were [sic] duplication of material already submitted by other council members," city council liaison Rhonda Hart wrote in a memo responding to our records request. "Councilman Larry Duncan has no documents related to the sports arena."

The response to my open-records request--for everything pertaining to the arena--also included nothing from the files of former Mayor Steve Bartlett. No surprise there. Over the past year, in response to two other records requests, Bartlett has provided a whopping 26 pages. The notion that Bartlett--the arena's number-one promoter--has nothing in his files on the matter is preposterous. Bartlett similarly turned over nothing when we requested his documents and correspondence on the Pinnacle Park racetrack project, another scheme he was water-boying for Hunt.

Last week, when I asked his former administrative assistant, Kristi Sherrill, now working for Mayor Ron Kirk, why I had received no arena documents from Bartlett on this latest request, covering the period from December 1994 through June 1995, she responded the same way she had in the past: she shrugged. "When we got the request, we looked through the files," Sherrill said, "and we sent you everything we found."

Sure. We also remember Bartlett's favorite motto: "No tax dollars will be used to pay for this arena."

Speaking of taxes, let's discuss the ones we're going to spend on the arena.
On June 14, the city staff met behind closed doors, as usual, with the city council. During that meeting, council members were informed that City Manager Ware was upping the ante on the arena--offering Carter $35 million in city money to help build it instead of the $12 million that had been on the table previously.

Where would that money come from?
Well, the answer was located in a fat briefing document the staff had prepared for the council--a document the council members didn't get much out of, since they weren't allowed to keep it. The packet was passed out, breezed through, and snatched back up before anybody could digest it.

The following day City Hall activists Rick Finlan and Don Venable filed suit against the city, alleging that the council had violated the Texas Open Meetings Act by discussing, and then authorizing the staff to make, the $35 million offer to Carter during the 2 1/2-hour closed-door session. City attorneys called the suit baseless. "Everything was by the book," City Attorney Sam Lindsay told the Morning News.

Uh-huh.
Two weeks ago, U.S. District Judge Joe Kendall--who had previously rejected a similar Lindsay argument, ruling that a city council committee's closed-door meetings with Carter and Hunt were illegal--took one look at the 113-page briefing packet the council was given during that meeting and declared 26 pages of it an open record that should be shared with the public.

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."

Which would leave no money--and no possibility of borrowing any--for the convention center.

This approach is foolhardy. When the convention center bookings begin to drop--and the only reason we have bookings today is because they were made four and five years ago--so will revenues. And when convention center revenues drop, hotel and drink taxes will have to cover the center's annual debt payments. But if we have fewer conventioneers in town, those taxes will fall off too. And when those taxes decline, it will mean not only debt-payment problems for the center--but for the new arena as well.

Frank Poe, a good company man who nonetheless sees where this arena obsession is going, wrote Suhm in another March 22 memo: "I realize discussions are ongoing regarding the 'new arena' project. However, we need some direction regarding movement on the projects noted with the material attached."

Direction? I think it's called down the tubes.
Former councilman Glenn Box, a big arena proponent, has always been wonderful about returning Observer phone calls and being open and polite to us on the telephone--even though he makes it clear that he disagrees vehemently with the Observer's criticism of plans for a new arena.

Well, now we know how he really feels.
Box sometimes gets letters from people who read this column, which--as you may know--has focused on the arena in some detail over the past year. In fact, Box has gotten so many of these letters, he's developed a standard reply. We found several copies of it in his files.

"Dear So and So: Thank you so very much for your recent letter concerning the proposed new arena. I am afraid that you have your facts completely backwards...

"Unfortunately, you have chosen to believe the distortions, misrepresentations and outright lies of an ultra-liberal Laura Miller regarding this arena..."

John Ware and his deputies have dedicated the resources of their office for 18 months toward getting arena shovels into the dirt--and neither persistence, nor stealth, nor blatant skullduggery has made much headway.

And so they dream.
They lie upon their office couches--or so we imagine--loafers off, eyeglasses pulled down on the bulbs of their noses, and they try to think up ways to make the whole deal work.

Like what to do with the old arena if we build a new one next door.
Consider what they've come up with on that one. On January 11, public works architect Louise Elam sent Mike Marcotte, the arena-project director, a memo. It was soberly written, but for the life of me I don't see how.

"Per your request, I studied the possibility of demolishing Reunion Arena to grade level and the footprint that would be left if the remaining hole was filled with water to make a water element," Elam wrote. "The footprint would be 224 feet by 338 feet at grade level that slopes down 30 feet to a footprint of 124 feet by 238 feet."

An arena-sized reflecting pool. Ray Hunt likes reflecting pools. He's got a little one in front of his hotel right now--on city-owned land that he's leasing from the city for $100 a year for 100 years. Maybe--and this is what the city manager's office must be thinking--he'd be willing to give us $150 a year for a really big pool.

Elam, in diplomatic fashion, did her best to discourage the idea in her memo. "The safety issues of having a thirty-foot deep water element need to be addressed," she said with a straight pen. "...The structural capacity of the retaining walls to withstand the pressure of the water would need to be studied...There is no drain incorporated in case the water would need to be drained... The area under the risers would need to be backfilled, so the the floor does not cave in under the weight of the water."

Details, details.
But perhaps she got her point across. Because two weeks later, the giant minds that are laboring over this deal had a new brainstorm for Elam to go investigate.

We learn this from a copy of some notes taken by Elam at a January 26 meeting. "CVK" is First Assistant City Manager Clifford V. Keheley, who resigned two months later.

"CVK wants to bring Reunion down to grade and do an open air amphitheater. If you have any thoughts--sketch out."

And so she did.
Elam works fast--we assume in direct proportion to the idiocy of the idea. A few days later, she submitted a sketch of the Reunion Arena Amphitheatre.

Luckily for the taxpayers, lopping the top off Reunion Arena and turning the lower seating bowl into an amphitheatre (with soggy wet seats) is not cost-effective. "This scheme would require certain utilities to be relocated..." Elam wrote. "Please find this information attached."

Price tag to relocate utilities (professional fees and arena demolition and renovation not included): $2.3 to $3.6 million.

We've been writing for many months about the incredible gall of the city manager and city attorney, who, week after week, usher the Dallas City Council into closed-door sessions to discuss this giant public project.

City Attorney Sam Lindsay admitted in this column two months ago that if it's not a legal matter, he doesn't bother checking to make sure that what the city staff plans to brief the council on in executive session is legitimate closed-door material, as narrowly specified in the Texas Open Meetings Act.

In other words, closing the doors is simply routine--and since only two members of the city council ever challenge the city attorney's wisdom on this point, it seems likely that this cavalier, ofttimes illegal, behavior will continue.

I just didn't know how likely until last week.
In a May 31 memo we unearthed, sent from new arena-project director David Morgan to John Ware's administrative assistant, Marsha Evans, it becomes painstakingly clear that the arena will remain permanently underground.

"At the request of John Ware...Downtown Sports Development Project (DSDP) briefings should be on future Executive Session agendas every Wednesday," Morgan wrote. "Per your request we will check with the Agenda Office every Friday to verify if the briefings are, in fact, scheduled for Wednesday of the following week. If they are not on the agenda we will contact you to inform you of the status."

And if, for some reason, the briefings are erroneously set for open session for Wednesday of the following week, we will set fire to the briefing packets. With kind regards, etc.

Last February 16, Dallas taxpayer and oil investor Aubrey Black wrote to councilman Glenn Box about this new arena idea.

"Dear Mr. Box: According to an article in The Dallas Morning News, the new arena will generate 340 times as much revenue with only 12.6 percent more seats than a renovation. DO YOU REALLY BELIEVE THIS?

"I ask only two things. 1) Please don't put ANY of the debt on the Dallas taxpayers, either sales tax, ad valorem, or any other tax. 2) Check the original projection on Reunion Arena against actual. (You sure haven't checked DART projections with actual.)

"Very truly yours, Aubrey Black."
Three weeks later, Box replied.
"Dear Mr. Black: Thank you so much for your recent letter concerning the importance of keeping the Dallas Mavericks and the Dallas Stars in downtown Dallas. I completely concur with you, and I have been working toward this goal for over a year now.

"Negotiations are difficult, but I remain committed to do whatever it takes to accomplish the goal of maintaining these sports teams in downtown Dallas.

"Fortunately, the council overwhelmingly fought back an effort to scuttle the process when we defeated a resolution to place a referendum on the May 6 ballot concerning this issue.

"Thanks again for taking the time to write. Sincerely, Glenn Box."
Mr. Black shot the letter back to Box with this handwritten note at the bottom:

"Dear Mr. Box: You should read your mail before answering. It is of little importance to the average citizen (the new arena) and its benefits are greatly exaggerated (except to a very few.)

"Your reply is a good example of what is going on at City Hall."
We couldn't have said it better.

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