By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
By Anna Merlan
By Lee Escobedo
By Eric Nicholson
"So, is this a good deal for Dallas?" I asked him.
Ware paused--for far too long. "It's the best deal we could get considering the competition out there," he said.
In other words, they didn't cut a deal. They caved.
The master agreement that was adopted by the council last week looks almost exactly like Perot's first offer to Ware, detailed in one of the letters released by the city, dated March 10. Perot wanted a $220 million arena, the cost of which would be split 50-50 between the teams and the city. He wanted total control of the design, construction, and management of the new arena--as well as management of the old arena--and all the revenues from both. He wanted the city's eminent domain rights to commandeer approximately 50 acres of downtown land, and he wanted every conceivable tax exemption the city could give him.
Ware responded to the offer in writing on July 2.
"Regarding our investment...we are not prepared to make an outright gift, be it called equity or otherwise, to ArenaCo, the Stars, the Mavericks or any other party," Ware wrote. "The project must demonstrate quantifiable, specific returns to the taxpayers and the City. Our simple understanding of the concept of equity is that when one invests in a new operation (ArenaCo), most investors get either a stake in the company or guaranteed return on their investment. If this is not in the benefit of the franchise, then we need the specific and quantifiable return that does accrue to the taxpayers."
(Perot's people had no patience for any talk of equity sharing; in a response to Ware the next day, Frank Zaccanelli, the president of Perot's Hillwood Development Corp., replies snottily: "...It is puzzling that anyone would characterize the City's investment as a gift. No request has been made for charity. To the contrary, the City can now seize an opportunity to jump-start a downtown revitalization. The opportunity requires an investment, and, as with any other investment, there is no guaranteed return.")
But Ware made it clear he wanted a piece of the revenue stream--especially the lucrative naming rights, whereby a big corporation will pay an estimated $1.2 million a year to plaster its name all over the inside and outside of the building. "Providing for 100 percent of the naming rights revenues to go to the teams is not in keeping with an equal sharing between the three major parties with a stake in this project," Ware wrote in the July 2 letter.
Way to go, John Ware--thataway to fight for the taxpayers!
Too bad he subsequently dropped that demand, giving Perot and Hicks every dime of the projected $86 million a year in arena revenues, including all proceeds from naming rights.
There was, of course, that $1 billion in private development that Perot promised to do. He addresses this in his March letter to Ware: "Hillwood Development Corporation envisions a revitalization of downtown Dallas spurred by the development of a state-of-the-art sports arena. The development will include offices, residences, shops, hotels and entertainment facilities. A revitalized downtown area will attract investment, thereby expanding and diversifying the City's tax base."
But Ware, who didn't win a Purple Heart fighting the Vietcong for nothing, smelled a rat. "We need to clarify some kind of assurances that the private development build-out will occur on some future schedule, so that we may determine the value of this project," Ware wrote in his July 2 response.
Of course he was right to doubt Perot on this--in the end, we got nothing more from Perot than 43 acres of surface parking and one ugly, abandoned power plant. Gee, Ross, could we keep the old grain elevators too?
But there's more. And it helps explain why Ware and Kirk waited a few weeks after the final deal was cut to tell the council that it would have to pony up another $20 million. Lest anyone believe Kirk's current contention that "we're not going to go a penny higher" than $125 million, just read Perot's original offer. He spelled this all out long ago.
"The $220 million cost estimate for the new arena covers only the land, the arena building, and on-site infrastructure and parking," Zaccanelli wrote to Ware on May 14. "Typical off-site infrastructure and related facilities would be provided separately by the City."
So let's review this extra chunk of money going to the arena.
In the master agreement the council just approved, Perot and Hicks agreed to contribute $7.3 million on top of the city's $11.2 million cost of extending Houston Street past the Texas School Book Depository, through the West End, under Woodall Rodgers, and out to the arena site. (That new road will then merge with Alamo, for which the teams and city will split the cost of widening and improving.)
The teams' contribution to Houston Street is just smoke and mirrors, though--because the city is obligated to pay back the money.
The mayor insists that we don't mind spending those millions one bit because, hell, we were going to do it all anyway. We were going to extend Houston Street out as far as the lovely TU power plant, then veer right onto a little cross street called Wichita and over to Harry Hines and the Dallas North Tollway.