By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
By Anna Merlan
By Lee Escobedo
By Eric Nicholson
Other people think they know the reason. Councilman Larry Duncan says, "This is all too typical of what happens when the council has decided to do something and the [city manager's] staff doesn't like it. It gets bogged down in the bowels of City Hall."
Mike Daniel agrees. A civil rights attorney who is representing the United Front in a breach of contract suit against the SDDC, Daniel says, "It's clearly part of the city's long-standing problem of not spending money--Community Development Block Grants and Neighborhood Renaissance funds--on minorities and poor people in a timely fashion."
What does the city manager's office have against a skating rink in South Dallas? The answer to the question is a little complicated.
In 1993, City Manager John Ware and then-Mayor Steve Bartlett hatched a plan to revitalize downtown Dallas. Calling the plan Intown Housing, the council voted to borrow $25 million in HUD funds for developers to create pricey inner-city lofts. Neighborhood and housing activists were outraged that the city wasn't seeking any federal money to help low-income people with pressing housing and economic development needs.
So Councilman Duncan and former Councilman Domingo Garcia, in Duncan's words, held the Intown Housing issue "hostage" until the city staff and council agreed to apply for another $25 million in HUD money to be used in a Neighborhood Renaissance Program to stem the deterioration in several poor neighborhoods.
The city staff wasted no time on the downtown housing project, but the Neighborhood Renaissance program languished. In fact, many of the downtown lofts were built and opened before the city even applied for the second pot of $25 million. HUD approved those funds in December, ostensibly clearing the way for the city to draw down on the loan and get the myriad projects--including Southern Skates--off the ground.
Gene Shipman, assistant city manager over the Neighborhood Renaissance program, blames the skating rink delays on the bank, not the city. "I think Mr. Minkah's bank loan wasn't in place until recently. I'm certain that was the problem."
Minkah vehemently disagrees. He says the bank was committed from day one. Texas Chase Bank representatives did not return calls for this story.
Shortly after the city council voted to loan the United Front $500,000 last August, a meeting was held with Minkah, the bank, and a member of the city's economic development staff. The bank and city said they wanted an updated business plan, which had originally cost the SDDC $13,000.
The person who originally did the plan--who was recommended by the SDDC and who Minkah believes charged too much--refused to update the plan at no charge. Next, he turned to the Bill Priest Institute, a small business-development outfit that is part of the Dallas County Community College District. The plan provided by an employee of the institute was substandard, Minkah says.
He found someone else to do it. But the city took so long to release the funds to pay the consultant, he got miffed and took on other jobs. Minkah finally located yet another person to do it, but almost three months had elapsed.
The city staff then had questions about the revised plan, particularly concerning the project's financial viability. "The financial projections seemed too good to be true to them," Minkah says. "Any formula we used showed that the project would cash-flow and make a profit the first year. They didn't think the neighborhood income level was high enough to support the rink. They said the people here don't spend much money on kids. I told them I thought that was an insult."
Then the city and bank brought up some other problems. The bank was concerned that the suit Minkah had filed against the SDDC would lead a judge to delay the whole project.
"There's nothing in the suit to possibly lead them to that conclusion," says Daniel, who quickly put to rest the bank officials' concerns.
The city said that it and the bank wanted the United Front to hire an experienced inner-city roller rink manager. "They were manufacturing pretexts and excuses to keep the city from spending money they're supposed to be spending," Daniel says. "It's not there to hoard."
Once the manager issue was resolved--Minkah eventually located someone who fit the bill to run Southern Skates--the city had a problem with the way the deal was structured. Minkah wanted to use the money from the city first, during construction, because interest payments would be delayed. "That way we wouldn't be burdened with interest payments during construction," he says.
But the city wanted Minkah to use the bank money first, because it had been promised the first lien on the project. "The point is that providing preferential terms and city money entices the private market into helping," Daniel says. "That's what the city wants to happen. Having gotten the bank in by promising that their money would be the last used, the city snookered Fahim and said, 'Oops.'
"It's the city's job to spend community development money. It's not in a bank drawing interest, so spending it last doesn't gain anything."
The latest obstacle the city staff put in Minkah's way came just a few weeks ago. They told him the project must have an updated appraisal--something he could have gotten months ago, had he known about it. Meanwhile, the builder says that if the city doesn't sign off on the contract soon, the prices he originally quoted on materials will go up, and so will the cost of the project.