Priced to sell out

City Manager John Ware ramrods a patched-together arena deal

That meeting amounted to the first substantive briefing on the proposed arena in three years. It was a sobering event, particularly if you'd believed the campaign promises of some of our newest council members. A number of them had seized upon this unpopular issue with the voters, feigning extreme nausea at the mere thought of giving taxpayer money to Hicks and Perot.

But on October 6, every single one of them voted to approve the letter of intent between the teams and the city, and they set a January election for voters to consider increasing hotel-room and car-rental taxes by $12 million a year to help pay the city's portion of the arena cost. (The rest of that debt will be paid off by the $3.4 million annual rental fee from the teams.) Such a tax hike would give Dallas the second-highest car-rental tax in the nation and the fourth-highest hotel-room tax.

The fact that we're looking to spike car-rental and hotel-room taxes is a shame; we certainly didn't have to. Under the state legislation that permits cities to levy new taxes for arena construction, there are other types of taxes from which to choose. Indeed, the city could have raised twice as much money if it had left car renters and hotel guests alone--neither of whom have any connection to an arena, mind you--and gone after arena users instead. The city could have hauled in $23 million a year by putting a $3-per-car tax on arena parking; a 10 percent tax on arena tickets; and a $5,000 tax on each player who participates in a game--to be paid, obviously, by the teams.

But the teams refused to allow the city to take advantage of this funding option. Clearly, the teams wanted us to leave their arena alone--they wanted to raise ticket prices and parking fees themselves and pocket those revenues. On this point alone, it's stunningly clear that what Ware does best in negotiations is give the teams exactly what they want.

"The teams would flat-out not agree to that," Ware told council members at the October 6 meeting, referring to the city's option of levying parking, ticket, and player taxes. "As a matter of fact, that was the hangup all the way up to six o'clock Saturday afternoon in regards to the negotiations between the city and the teams."

But if the money situation is troubling in this deal, the timetable is insane. Why the rush? Why aren't our elected officials being given enough time to absorb all this complex information? To weigh the pros and cons of such a massive investment? To maybe cry foul?

Because that's what the teams want, of course. "That's what they asked for," Ware told me last week with his usual shrug. "They want a January time frame [for a referendum]. Which is all tied to getting an arena open by the fall of 2000."

There is no magic about a 2000 opening date, however. The Don Carter-owned Mavericks insisted they had to have a new arena up and running by fall 1997. Today, scanning the downtown Dallas scene from my office window, I see that despite severely blowing such a crucial deadline, the sky is still blue overhead, and there is life--grass, people, light rail--in the central business core.

Think about it: If John Ware couldn't get us a harmless concession such as a little time to mull this over, one need look no further to see how one-sided the rest of the deal is.

And it can only get worse.
Right now, lawyers on both sides of the deal are feverishly trying to cobble together a formal agreement between the teams and the city--it will be the kind of massive, extremely complicated document that is sure to haunt taxpayers for many decades to come. There are big law firms involved on all sides--Hughes & Luce for the Mavericks, Haynes and Boone for the Stars, and Vinson & Elkins for the city. Needless to say, there's plenty of disagreeing under way.

The lawyers are rushing, rushing, rushing--meeting every single night at each other's offices over plates of barbecue and other fast-food delicacies--to get the master agreement to the council by next week's impossible deadline.

One of the things the lawyers are struggling over is this: If the city puts up $125 million and the teams put up $105 million, but the arena actually costs less than $230 million, who gets the surplus? That is not a far-fetched scenario. Perot's development company is overseeing construction of the arena, and there's no competitive bidding required. For all we know, we could be getting a cheaper building--and there's no way we'd ever find out.

The $500,000 arena study three years ago determined that a top-of-the-line arena with every conceivable bell and whistle would cost $170 million. But that amount seemed so high--the consultants' renderings so gold-plated, so Liberace--that city staff, to avoid criticism, quickly pared the figure down to $142 million. How, then, does Ware agree to fund something that costs $230 million?

Ask him, and you get the standard response: "That's the projection the team proposed," he told me last week.

But is it true, I asked Ware, that Perot's $230 million figure includes the cost of underground parking at the new arena?

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