By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
By Anna Merlan
By Lee Escobedo
Despite the mayoral race's accent on fixing neighborhood streets, parks and pools, Dallas is likely to be faced for years to come with major decisions on "public-private partnerships" and "innovative financing arrangements" on projects downtown. Typically, they are designed not to tap the public treasury directly, but they tend to diminish future receipts. (In a TIF district, new taxes collected as a result of rising property values are directed toward developers rather than going into the general fund. Defenders of the system say it's self-funding, because without the new projects, property values don't rise.)
"I'm not against business incentives, but we have to be very careful how they're used," says Councilman Alan Walne, chairman of the business and commerce committee. He is skeptical of both Victory's ideas and what has been done in the core. Walne says the city-center TIF was pitched five years ago as a way to finance parking garages. "So far, we haven't built a space."
Instead, there have been projects like the one the city approved in 1998 to buy the 95-year-old Wilson Building from apartment developer Post Properties, lease it back and exempt the handsome warren of stores and apartments from nearly all property taxes for 13 years. Eighteen months later, Post informed investors in a release that its $15 million investment in the building would yield a solid but not staggering 11 percent annual return. And that assumed it stays leased.
Is that a bad deal for the city? Is it better the building sits empty and derelict? Dallas City Councilman Ed Oakley says those are always the multimillion-dollar questions posed by the high cost of building downtown. "It's popular right now to say you're against incentives and breaks for developers," he says. "The reality is, if you don't give them, nothing gets done."