Mavs held hostage

Did Ross Perot Jr. strike out when Tom Hicks bought the Rangers?

On January 6, the Dallas Mavericks ended a 15-game losing streak in front of a crowd team officials said hovered around the 9,000 mark--though, in truth, no more than half that number bothered to show up at Reunion Arena for this clash of last-place titans, the Mavs versus the Denver Nuggets. The weather was bad; the basketball, worse. The game had all the excitement of a junior-high playoff tournament. It was so quiet in Reunion, you could hear a player think.

Among those hearty souls in attendance was Mavericks' owner Ross Perot Jr., wearing a "Yes! Let's build it" button on his dark suit and a grim look on his tight face. Perot sat courtside about 30 seats away from Mayor Ron Kirk, with whom he exchanged not a single word, at least in public.

Junior watched the game with blank passion: His team had won, but it was a hollow victory. Even assistant coach Donnie Nelson, son of coach-general manager Don Nelson, said after the game that "it meant nothing." Two days later, the Mavs would begin yet another losing streak, the kind that drowned the senior Nelson's fall playoff talk in cold winter rain.

On January 6, Junior's team had won its insignificant battle on the Reunion Arena hardwood. But earlier that day, the Mavericks owner had come a step closer to losing a much bigger war--the one that was supposed to end with his being awarded a new downtown Dallas arena on the abandoned TU Electric site off Stemmons Freeway. The papers had reported that Dallas Stars owner and media mogul Tom Hicks was buying the Texas Rangers, the lease to the Ballpark in Arlington, and--oh, yeah--270 acres of prime Arlington real estate. Just the kind of fertile land where any self-respecting billionaire would be proud to plant a new arena.

The press conference confirming this came the next day. Rangers president Tom Schieffer passed the baton--in the form of Juan Gonzalez's bat--to Hicks, and the new owner spun cheery World Series promises to a room filled with adoring colleagues and reporters, who wrote how Hicks had turned the Stars into a winner in two short years.

After the Nuggets game, Perot stuck around to shake a few hands and finagle a few votes for the arena, but he seemed to wear the news like a mask. Perhaps he realized that the moment Hicks bought the Rangers and all that beautiful land, he might as well have buried Perot's arena fantasy.

Once upon a time, Tom Hicks thought he would own the Dallas Mavericks--until Junior stole the team not behind his back, but right in front of his face. Once upon a time, Tom Hicks offered to pay for a new arena himself (well, with his and Perot's money)--until Junior demanded the city pay for more than half, forcing Saturday's vote that could demolish Dallas' new-arena future. Once upon a time, Tom Hicks looked like a very good guy--until Junior got greedy.

Now, Tom Hicks gets his revenge.
If, come Saturday, Dallas residents vote not to increase car-rental and hotel taxes, providing the $125 million in bond money that would go toward financing the arena, it seems more than likely that Hicks will build the new arena in Arlington, a home run away from the Ballpark. And if that happens, Perot's dream of building a real estate paradise around his pitiful Mavericks disappears--just...like...that.

Hicks and his people keep denying they want to move to Arlington. Instead, they talk about how difficult the arena negotiations were with Dallas and Perot--Hicks' and Perot's people didn't speak for eight months in 1997--and how dedicated Hicks is to keeping the Dallas in Dallas Stars for the next 30 years.

But just a few days ago, David Deniger--the president and CEO of Hicks' Olympus Realty, a minority owner in the Stars, and one of the brains behind the arena negotiations among the Stars, the Mavericks, and the city--told the Dallas Observer it's very possible that if the vote fails, an arena will be built near the Ballpark.

"It's not unreasonable to assume the teams are going to go elsewhere," Deniger said. "That will be the case. But we haven't threatened anybody. We're not pointing a gun to anyone's head. If this thing is turned down, it's a new ball game. That's an important piece of property [near the Ballpark], and it'd be natural to build an arena there."

Hicks repeatedly said last week that negotiations between himself and the Rangers have been going on for months; Deniger said he thinks the news leak came from someone inside the Rangers, though he isn't sure. Nonetheless, the timing was bad. Last week, a Mavericks employee told the Observer that the teams had done research indicating that voters will make up their minds about the arena between January 6 and voting day.

Hicks must have known there would be a tremendous backlash among voters when they found out this billionaire was paying $250 million for a baseball team--and asking those minimum-wage taxpayers whose votes Perot and Kirk so desperately need to fork over $125-plus million for an arena to house his hockey team.

Or perhaps the timing wasn't so bad after all. Hicks can do nothing but win in this situation: If Dallas votes yes, then he stands to make millions by, essentially, putting up thousands. If the city votes no, then he can consolidate his two teams on one beautiful piece of property in a sports-friendly town ready to welcome a new arena with open wallets.

Hicks has sent the message to Dallas voters that if they drop the ball this Saturday, it lands in right field, somewhere next to Juan Gonzalez.

Which would leave Ross Perot Jr. stranded in the middle of an industrial dump site, where he's optioned 40 acres of nothing.

Which, no doubt, infuriates Perot, who bought the Mavericks because he envisioned moving his basketball team to a new downtown arena and developing the land around it--hotels, restaurants, retail stores, parking lots, the works. Now, only Hicks stands to profit from an Arlington arena, leaving Perot with a handful of desperate, dashed hopes and a worthless basketball team. In time, Perot might even have to sell the Mavericks to Hicks--for nowhere near the $250 million Hicks is paying for a third-place baseball team that always seems to melt in the August heat.

That would suit Hicks just fine. After all, two years ago, he was this close to owning the Mavericks--that is, until Perot played both sides of the barbed-wire fence and filched the team at the last minute. Indeed, Hicks has every reason to yank the arena out from under Perot's loafers.

When God-fearin' Don Carter was trying to unload the Mavericks in 1996, Junior attempted to buy the team himself and joined another group of potential buyers, led by none other than Tom Hicks. At the time, it seemed Hicks had the inside track: The broadcast mogul, whose investment firm Hicks, Muse, Tate & Furst owns more than 140 companies worth in excess of $20 billion, had the better offer. He was willing to pay $125 million for the team; Perot and his group were going to pay Carter $110 million.

According to a story that ran in the Fort Worth Star-Telegram in November, Perot originally backed out of the deal and agreed to sign on as a minority partner with Hicks. Hicks then gave Carter a down payment of $10 million on the team a few days before the deal was to be signed.

That was on a Friday. The Star-Telegram reported that the very next day, Hicks called Perot's top henchman, Frank Zaccanelli, to find out whether Perot was still in. Zaccanelli said yes--and he was lying.

On Monday, Hicks went to Carter's office with Perot to close the deal for the Mavericks. Instead, Carter gave him the $10 million back and told Hicks he wasn't getting the team---Perot was. Carter said that his old friendship with Perot forced him to give the team to Junior instead. The newspaper reported that Hicks was furious. He had been betrayed by Perot, his alleged partner.

Hicks told the Star-Telegram he didn't feel "comfortable working" with Zaccanelli anymore. Perot, of course, was proud of his handiwork. "I thought it was a pretty good strike," he told the paper.

The Star-Telegram also reported that Hicks and Perot then met to discuss a new arena. Hicks proposed splitting revenues from the new building, consolidating their franchises, and having Hicks run the whole deal. But that never happened, wrote reporters Mitchell Schnurman and Miles Moffeit. "In August 1996, the Perot team told Hicks that a lease provision at Reunion Arena gave the Mavs the upper hand in any new venue. Rather than splitting revenues, as Perot had discussed from the beginning, Perot sent a contract that called for the Mavs to get two-thirds of the money generated from a new arena."

That was when Hicks stopped talking to Perot, and the two parties began drawing up their own separate plans for the arena. Late last year, they finally came to an agreement to share revenue from the new arena--but not before Hicks and Perot presented to the city two separate proposals that revealed how at odds they were with each other.

In a letter dated February 16, 1997, Hicks sent Kirk and City Manager John Ware a rational list of demands. He proposed that he and Perot would run the arena--as ArenaCo, a joint venture between the Mavericks and Stars--and wanted the city to pay for all infrastructure costs around the arena site, including 8,000 parking spaces.

He figured it would cost $180 million--"not including land, infrastructure, and parking"--to build the arena. Of that, he wrote, the Stars and Mavericks would pay $110 million, and the remaining $70 million would come from a loan made by the city to the teams. The Mavs and Stars wouldn't owe any interest on the loan for the first 10 years, after which the interest would become 6 percent annually.

It seemed like a hell of a deal for the city: The teams would pay for the arena, and the city would take care of any infrastructure development. But that wasn't enough for Perot. He didn't want just an arena; he wanted an arena and all of the land around it to support his grandiose visions of a "Times Square in downtown" Dallas.

A month after Hicks submitted his proposal, Perot told the city he wanted an agreement that allowed for considerable real estate development around the arena--50 acres all told, 10 of which would go to the arena. His Hillwood Development Corp. would own every square inch. Plus, he not only wanted all revenue generated by the arena, but all monies generated by the surrounding land. And, of course, he wanted the city to finance the entire project: fixing roads, cleaning up the land, building his precious new building. He estimated the cost of building a new arena at $220 million and demanded that the city pay half.

When Hicks and Perot couldn't come to an agreement, Perot became so angry, the two parties didn't talk till last fall. During that time, Perot started taking all those helicopter trips with mayors of neighboring suburbs, scaring all hell out of Kirk and Ware.

By October, Perot got his deal.
And now he could lose it to Hicks, the man he screwed over--twice.
Perot has one more problem: The Mavericks have a contract with Dallas that demands the team stay in Reunion until September 30, 2008. The Stars' deal with the city expires five years earlier--about the time it will take to propose a new arena in Arlington, present it to the voters, and then build it. If the Dallas arena passes, then the teams' Reunion contracts are voided; if it fails and the teams opt to go elsewhere, they're stuck, and it will cost the Mavericks if they want out of the deal. How much is hard to say. Neither John Ware nor Assistant City Manager Ramon Miguez returned calls.

David Deniger says both the Mavericks and Stars are going to "fight like hell" to keep the arena in Dallas; he points to the $1.9 million the teams contributed to the Vote Yes! campaign as proof of that. But, he says, if Dallas says it doesn't want the arena, then the teams will have no choice but to move.

"We have had no discussions about the scenario in which this thing loses," he says. "But if it does, we're going to be very disappointed."

No one more than Ross Perot Jr. After all, Deniger reminds us, if the arena vote fails Saturday, "everything is up for grabs." Including, he says like a man making a grab for everything, "real estate development."

And in the end, that's what Saturday's vote is really all about.

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