By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
By Anna Merlan
By Lee Escobedo
Here's the thing. People call me up. They abuse me. They ask if I'm an idiot. No. Frankly. I am not an idiot. They ask, "Don't you think it's worthwhile for the city to offer developers tax breaks if doing it encourages development?"
Here's the thing. I don't know. It depends. What developers? Where? You mean always? Give them all tax breaks? Hell no. The city's already $10 billion in the hole on deferred maintenance. What, do you want us to give away the city's whole income so we can go $26 kabillion in the hole?
Figure this. If a developer is building something on prime ground--an area everybody wants to get into already--then why does he need an incentive? This is America. People actually do business here without government subsidies.
A few weeks ago I toured a 31-story luxury condominium tower slated to open next spring in Uptown at Wolf and McKinnon streets, near the Tollway and just south of Reverchon Park. It's called "Azure." Just "Azure."
Condos in Azure will start at $426,000 for a 900-square-foot one-bedroom, up into the multiple millions for something more in the 10,000-square-foot range. Upon completion this building will meet the very highest national construction and architectural standards. Its blue glass skin will gleam on the skyline like the Caribbean Sea. And you know what I really love about it? We're not paying for it.
Not a nickel. They didn't ask the city for one dime to be paid to them from my tax money. I am filled with the pride of non-ownership.
The obvious contrast--and subject of much publicity since its recent opening--is the W, a luxury hotel with condominium units half a mile southwest of Azure in Victory, another coveted locale. Victory is the development of Ross Perot Jr. around the new sports arena north of downtown.
I wrote about how much money you and I are contributing to Victory a couple weeks ago ("Sticker Shock," June 29). I won't bludgeon you with the facts again today.
Here's my point. If Harwood International was willing to pay for some very hot dirt near downtown Dallas and then shoulder the full cost of putting this top-quality building on it--all on its own nickel with no local tax subsidy--why do we assume we have to pay other people to date us?
Julie Morris, director of acquisitions for Harwood, walked me through the Azure sales model. I'm not going to try to write about the kitchen appliances. That's like me trying to write about soccer--at least one guaranteed faux pas per paragraph. But when you slam the doors in the cabinets or the refrigerator or the stove, the doors whoosh right up to the closing point, pause on their own and then close themselves with a kind of quiet dignity, as if in reproach.
The balconies. Wow. High-flying party spaces. Most have fireplaces. And the view. Inside the sales model, one whole wall is glass. They flick a switch, and a full-sized photographic recreation of the nighttime view of downtown lights up. I think if I lived there, I'd become Batman. That's a personal issue.
Harwood put a foot on that edge of Uptown in 1982 with the Rolex Building and then spread its way out McKinnon Street with the Centex Building, then the Jones-Day Building, then the International Center Building completed in 2000. All of their properties are contiguous and joined by paths and skywalks. They call the whole development "International Center."
In the center of International Center is a vast parking structure you can't see from the street, because Harwood dug it down into the ground and then roofed it with a street-level park that looks like a corner of the Tuileries in Paris. Cropped hedges and dense trees form garden "rooms" where you can sit on benches or at tables and feel as if you're in another century.
The park is open to the public. It didn't cost the public a dime. Harwood maintains the park at its own expense.
A spokesperson for the U.S. Green Building Council in Washington confirmed for me that Azure is on track to receive the council's second-highest rating for energy efficiency and environmental design. Only one other structure in Dallas, the city's Hensley Field Operations Center, holds the same rating.
Bill Hillburn, who is in charge of construction for Azure, told me he hopes the building ultimately will earn the Green Building Council's platinum, or highest, rating. The W, I learned, will not be getting any kind of rating at all from the USGBC.
So I guess some people still make their money the old-fashioned way. From business, not politics.
The Harwood people wouldn't talk to me about their competitors or city tax policy. But you and I can figure this out for ourselves. Every time the city grants a major subsidy to one developer, it screws all the other developers who are going into roughly that same niche in the market but don't get a subsidy.
The basic engine for city subsidies is the Tax Increment Finance District, or TIF, which I would explain except that I have been warned by Dallas Assistant City Manager Ryan Evans that I'm not smart enough. You know, I'm University of Michigan. I think before you're allowed to try to explain TIFs, you have to be at least Stanford, possibly even University of Texas Plan Two. So I modestly demur.
But the basic idea of TIFs when they started was that they would be used to spur development in very risky areas, where sane developers would fear to tread without serious incentives. Here's the problem: The Dallas City Council wants to give all the TIF money to the rich, powerful suck-ups who can invite them to the charity ball, and they're totally gutless half the time when it comes to projects that could really use the help.
In fact, the bigger story over time is probably the stuff the city has refused to help with. Last week I went out with Larry Duncan, a four-term council member who was term-limited out in 1999, to tour the area where the Georgetown II apartments once stood, six miles southwest of downtown, near Bruton Road and Buckner Boulevard.
I went there as a reporter in the late '80s to write about some kind of fracas. Very scary. I remember driving around thinking, "OK, this time I definitely go home in a box."
And Georgetown II only got worse in the '90s. It was owned by Chicago slumlords who defaulted it back to the U.S. Department of Housing and Urban Development. HUD couldn't get a handle on it. Of more than 600 units, 40 percent were occupied by squatters. In 1993, the Washington Post sent a reporter here who did a story that said: "As a symbol of HUD's troubled housing programs, there could be no better example than Georgetown II.
"For six years, HUD watched as a once-comfortable 620-unit housing project turned into a neighborhood eyesore, beset by drugs, gangs, drive-by shootings and murder."
Duncan, who was on the council then, helped put together a consortium of neighborhood groups to buy the place from HUD and redevelop it, along with Habitat for Humanity, a nonprofit, and the community development arm of Bank of America. He toured me around last week, and I don't see how anybody could call the project anything but a brilliant success. Where hundreds of scary-bad apartments once stood, new rolling streets now are lined with tidy brick homes occupied by many first-time homeowners, next to a restored and much smaller apartment complex.
John Ware, who was city manager in the '90s when Duncan was trying to get this deal done, wouldn't touch it with a 10-foot pole, and neither would most of the city council. No subsidy from this city, sister.
Know why? Too risky. But there it is today--a huge success.
So here is what I would say. Sure. The city should use tax subsidies to encourage high-risk, high-value developments that won't get done without subsidies. But it should not give tax subsidies to sure-thing developments that are going to get done, subsidy or not.
What we are missing in all this is a philosophy, some principles, standards, a road map that says, "This is when we do it, and this is when we don't."
What we get from the city instead is a lot of inconsistency, which just creates chaos. Mayor Laura Miller, for example, has been 95 percent steadfast in opposing incentives for people who don't need them. But she supported incentives for Lucy Crow Billingsley's new 7-Eleven headquarters building in the arts district.
That makes everybody crazy. I hated the incentives handed out after the Billingsley deal to kabillionaire oilman Ray Hunt for his new headquarters downtown. But I have to admit: If Ray sees Laura dishing city dough to Lucy, then Ray has a right to want some city dough too.
One of the arguments my more ardent callers are giving me is that it's not right to say no to hometown developers if you gave a big incentive to somebody from Cleveland--a reference to Forest City, the people doing the huge Merc Complex renovation downtown. But, wow, where does that end? I guess it wouldn't be right to turn down wavy-haired developers if you've been generous with bald guys in the past.
I just hope the bridges don't fall down, meanwhile, because we're all going to be living under them before this kind of thinking is over.
So, no. Frankly, I am not an idiot. Thank you very much for your concern. I just think we need to stop handing out this money willy-nilly, take a deep breath and decide what in the hell we're doing. And why.
I wish they'd invent a caller ID where you could administer a mild electric zap to the caller. Just a zing.