Priced to sell out

City Manager John Ware ramrods a patched-together arena deal

There it lay, staring up at me from my front lawn, as appealing as a dead possum.

It was the Saturday front page of The Dallas Morning News--on this day, a truly nauseating sight. It featured a gigantic color photo of Mayor Ron Kirk, Dallas Mavericks owner Ross Perot Jr., and Dallas Stars owner Tom Hicks. All three sported huge grins, expensive silk ties, and those big, frat brother-type shoulder squeezes.

They were clearly happy about something. I figured they'd either bought the winning lottery ticket or finally made their deal with the devil to build a new arena.

Unfortunately, it was the arena.
I should have seen it coming: I'd covered the city's frenzied pursuit of a new sports arena for three and a half years.

I'd watched City Manager John Ware lie and cheat to get an arena deal done. I'd seen him go to embarrassing lengths to cater to the arena dreams of team owners and downtown developer Ray Hunt. I'd seen his staff go through the motions of soliciting bids for a supposedly independent $500,000 arena study, only to let Mavericks owner Don Carter hand-pick the consultants and the consultants and Carter hand-pick a site owned by Ray Hunt.

It had always been about Hunt. Hunt had started this quest for a new arena, and Ware wanted to give it to him. In fact, lest something go awry and Carter's consultants not choose Hunt's property, Ware's top staffers commissioned their own secret arena study to shore up Hunt's position. In order to avoid telling the city council about the study, the city manager's office ordered the surreptitious transfer of $50,000 in leftover convention-center construction money to fund it. Later, when this newspaper discovered the secret study in a box of documents in the city public works department, Ware & Co. panicked.

In a closed-door meeting with the city council in November 1994, Ware and his top assistant city manager falsely accused a low-level public works employee of single-handedly commissioning the study. The lie was quickly exposed, and Ware's assistant took the rap--and "early retirement" from the city.

People who'd go to such lengths to ingratiate themselves with the monied and powerful--people who think nothing of destroying an innocent person's career to suit their own misguided purposes--are not the ideal people to negotiate a major real estate deal with taxpayers' money.

Still, I'd held out hope until the end that common sense would prevail, that city leaders would begin to pay attention to the ever-louder chorus of public dissent about this smelly project and its rich cheerleaders.

Well, leave it to a newspaper columnist to think she has her finger on the pulse of the city.

Instead, the mayor and city manager cut a deal for a $230 million arena, and the city's nonrefundable contribution of $125 million was nearly twice as much as anybody had ever envisioned. (Even Kirk had scoffed when a reporter asked him earlier this year if it were true that the teams wanted as much as $100 million from the city.)

The city's share of construction costs--54 percent--was inexplicably large, especially given the fact that the teams would get to keep all the revenues from the new arena in exchange for their 46 percent participation, or $105 million. True, the teams were committed to stay in Dallas for the next 30 years, and they were obligated to maintain the new arena while paying the city $3.4 million a year in rent. But that was the extent of their pain.

The teams like to point to the generous rental payments they'll be paying, but in truth it's a paltry sum. It's actually less than what the city makes now off of basketball and hockey--and that's in saggy, old, inferior Reunion Arena. For the 1995-'96 season, city records show that the Mavericks and Stars paid $1.2 million in rent; but the city also received an additional $3.2 million from concession sales and parking fees. In a new facility, the city won't get parking and concessions, only the rent, and the amount will never waver over 30 years, no matter how rich the teams get off the deal.

And they'll clearly do extremely well: They'll rake in millions from luxury-suite rentals, club seats, ticket proceeds, restaurant and retail sales, concession stands, parking fees, broadcast rights, and sponsorship deals.

It's a sweet deal, all right--for the teams, at least--and the only consolation is that the citizens of Dallas can single-handedly kill it if they want to. Come January, they'll have to approve some new taxes at the polls, or the deal will fall apart.

But standing on my front lawn last month, staring at that smarmy picture of Our Hometown Rascals, it was too soon to think about the January vote. Right now, all this semi-retired writer wanted to do was head for the house to scrounge through drawers in search of that long-lost key to the office.

Until now, I'd had little interest in returning to column writing.
It was a pleasant surprise to feel that way. Shortly before I left my job last January to spend more time with my husband and three children, I had begun secretly fearing a major identity crisis.

It was more than just the thought of losing my weekly berth in the paper--I was also losing my only opportunity to publicly vent about perceived injustices small and large; I was walking away from a generous, regular paycheck with a matching pension contribution; and I was facing the prospect of being unemployed for the first time since I barked food orders as a waitress in a Greek diner at the age of 14.

Now I was leaving work for motherhood. And it was just a matter of time, I figured, before I found myself wrestling with the poisonous snake that is The Identity Thing, The Pride Thing, The Ego Thing.

But it never happened. Not when people asked what I did for a living. Not when I found myself with nothing new or interesting to pass along to anyone about Dallas City Hall, the Dallas schools, or Michael Irvin's always engaging extracurricular activities. Not even when I dug into my husband's wallet for restaurant money or sat in those long, plodding carpool lines with the other moms who have nowhere else to be at 3 in the afternoon.

But what did you do for nine months? people asked. Try this: school lunch-line duty, toddler gymnastics classes, afternoon movies, road trips to Austin, back-yard gardening, homemade desserts. I started my five-year-old down the road to reading. I designed and sewed by hand five lion costumes for my older daughter's first-grade musical. (No small feat considering that the only two crafts I've ever mastered are potholder weaving circa 1965 and button sewing. The day last spring when I realized I'd become a regular at Cloth World was, I assure you, a frightening moment in my life.)

But my greatest accomplishment by far was kids' soccer. Last winter, when I couldn't get my five-year-old onto a popular soccer team because it was full, I hauled off with another similarly frustrated mom, and we created our own team. Now in its second season, ours is one of the few teams at the Town North YMCA coached by women, and I can satisfactorily report that last weekend, when we found ourselves up against the hotshot team we couldn't get our daughters on, we hung in like tigers, pulling off a 0-0 game.

Nonetheless, there have been times when I've found myself missing my column voice.

There was the Paul Fielding trial. And there was the all-too-obvious lack of a trial for Fielding's sidekick, Dallas city councilman Al Lipscomb, who, unlike Fielding, figured out a long time ago how to play silent and dumb while taking people's money for council votes. Then there was the Rudy Kos trial, which The Dallas Morning News covered so tepidly that at times you would have thought it was just a case about a guy with a foot fetish.

And, of course, when Yvonne Gonzalez began gleefully whacking people's heads off in her new role as Dallas schools superintendent, I had wished I was in there with her, rooting out corruption. When she turned out to be the corruption, it was all I could do to stay focused on soccer games.

But the arena deal was not so easily overlooked. Not only was it a shamefully one-sided deal, but nobody seemed willing to say so. Although council members Donna Blumer and Bob Stimson are important exceptions--and a grassroots anti-arena group is starting to show signs of life--The Morning News has barely noted their concerns.

The newspaper appears totally uninterested in disproving the Mayor's No. 1 Fiction--that the hotel and car rental taxes hit only out-of-towners. And despite the fact that the city of Los Angeles just announced that it's building a new arena with virtually 100 percent private funding, The News' arena reporter, Todd Gillman, hasn't written a word about it. "I hope I haven't come across as a booster," Gillman said recently in a roundtable discussion of the Dallas arena proposal on live radio.

Gosh, no, Todd, why would anyone think that? Perhaps it's because your employer has shamelessly editorialized in favor of an arena deal--any arena deal--since early 1994, way before the public had a clue this was going to become the top priority at City Hall.

Sometimes it seems as though everybody's gone mad when it comes to this issue. The council vote three weeks ago to push ahead with the arena deal was ludicrous. There wasn't enough information presented to the council even to make a decision like that. We didn't have so much as a picture of what we were getting for our $125 million. And although we're the owners of the arena, we have no say whatsoever over the design or construction. As of today, we don't even have any idea where it's going to be built (although I understand that Perot is perfectly willing to tell Hunt to go screw himself, which is the one part of this deal that I like).

Shooting in the dark with taxpayers' money doesn't seem to bother our elected officials one bit. The majority of the council is inexplicably brain-dead on this issue. Many didn't even bother asking questions about the current deal before they voted in favor of it at a meeting on October 6.

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?

"They haven't gotten definite on that," Ware said with his usual vagueness.
Well, perhaps we should have demanded some definition. But that's not the taxpayers' problem. If Perot wants underground parking so he has room for more lucrative private development around the arena, he ought to pay for it himself.

Secondly, if Lot E--the much-talked-about, half-Ray-Hunt-owned property located between Reunion Arena and the Dallas Convention Center--is selected, there's already a big, fat parking garage sitting there. We built it for Ray Hunt when he, like Perot, "promised" to develop the land around our sports arena two decades ago. Hunt never lived up to his part of the deal, and we've been losing money on that garage ever since.

Under any scenario you choose here, the taxpayers should not be subsidizing an underground parking garage--or agreeing to a $230 million arena that hasn't been designed yet. So what happens if there's a whopping construction surplus after the arena is built? Who gets to keep the money? Team lawyers, of course, are insisting they do; city lawyers are throwing that point back to Ware to negotiate with Hicks and Perot. Which--if Ware's track record here is any indication--means the teams will get their way.

Last week, I asked Ware if he felt he had any leverage during the negotiations. Considering the miserable deal he'd cut, I figured his answer would be no. But instead, his answer was cocky, his voice jaunty: "Who the hell is going to buy a club seat, or pay $150,000 for a luxury box, in Arlington, Texas?"

A lot of people, one can only hope. Otherwise, Perot and Hicks are laughing harder than we think.

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