Demanding Answers as the Dallas Convention Center Hotel Moves Forward

As Mayor Tom Leppert pushes for a convention center hotel, critics demand more details and less tax money. At least, those who haven't been silenced do.

Despite unanswered questions on such hot-button issues as taxpayer involvement, questionable appraised values, voter approval and the economic viability of the project, the mayor seems hell-bent on pushing a convention center hotel through the council. And a council vote is scheduled on April 23 to approve financing for the purchase of the Chavez parcel, which for all practical purposes will seal the deal.

The mayor's enthusiasm for the hotel is shared by one of his most ardent supporters, the Belo Corp. One of its holdings, The Dallas Morning News, has for many years thrown its editorial endorsement behind a convention center hotel. And yet the local media conglomerate's large real estate holdings around the convention center give it a vested interest in seeing this project become reality.

But there are other political forces in play. Council members Mitchell Rasansky and Angela Hunt, who represent adjacent districts, voted against optioning the Chavez land. Both spoke out against the deal, at least until they were given more information about how much the hotel would cost, how much public subsidy would be required and how similar hotels in other cities have influenced convention business and economic development. But as of April 7, Rasansky is done speaking out. The city attorney claims Rasansky has a conflict of interest in the project because of some of his stock holdings, and he has been banned from voting on the issue or speaking about it publicly.

The city attorney claims Mitchell Rasansky has a conflict of interest in the convention center hotel project because of some of his stock holdings, and he has been banned from voting on the issue or speaking about it publicly.
Brian Harkin
The city attorney claims Mitchell Rasansky has a conflict of interest in the convention center hotel project because of some of his stock holdings, and he has been banned from voting on the issue or speaking about it publicly.
Council members Angela Hunt and Mitchell Rasansky voted against proceeding with an option to purchase land for a convention center hotel at least until more was known about the hotel's cost and the extent of taxpayer involvement.
Brian Harkin
Council members Angela Hunt and Mitchell Rasansky voted against proceeding with an option to purchase land for a convention center hotel at least until more was known about the hotel's cost and the extent of taxpayer involvement.

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Dallas City Council

1500 Marilla Drive # 5FN
Dallas, TX 75201

Category: Services

Region: Downtown & Deep Ellum

This leaves Hunt as the only vocal critic on the council. "[Rasansky's] removal from this debate is very crippling for me," she says. "We can no longer bounce ideas off each other, and I can't analyze the data in the way he does because of his experience in real estate."

Veteran real estate developer Harlan Crow also opposes the hotel as proposed. He too is concerned about the use of public money and the haste with which the mayor seems to be railroading this project past the council. Crow is not without his own self-interest. His company, Crow Holdings, owns the Hilton Anatole Hotel, which would be in direct competition with a convention center hotel.

Despite his head-cheerleader role, Leppert would not answer questions from the Dallas Observer about the project. His chief of staff Chris Heinbaugh said, "As I mentioned before, [Leppert] is not ready to discuss it until things have firmed up and we know which direction the city is heading."

But for those who oppose the project or wish to slow it down, that's not hard to figure out. There is only one direction the mayor is taking the city: full-speed ahead.

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This isn't the first time that the city has grappled with the issue of a convention center hotel. Discussions for adding a hotel were fanned by additions to the Dallas Convention Center. Originally named the Dallas Memorial Auditorium, it was built in 1957 with 70,000 square feet of exhibition space until it was expanded four times to its present size of around 1 million square feet, making it only one of nine U.S. convention centers of comparable size. But the idea of a hotel didn't gain much traction until early 1995 when former Mayor Steve Bartlett encouraged a proposal for a hotel using tax abatements.

Months later, when former Mayor Ron Kirk took office in May 1995, he put some of his newly acquired political capital behind a hotel. DHP Ltd. Partnership of Utah came to the table and met with the council's Business and Commerce Committee. It proposed converting the former Employers Insurance Building on Young Street, now an office building, into a 1,000-room convention center hotel at an estimated cost of $100 million. DHP's request included $40 million in tax abatements and other financial subsidies.

The day after the meeting, Harlan Crow sent Kirk a letter saying he opposed any deal that would use public money to subsidize the project. In an attempt at damage control, DHP hired political consultant Carol Reed, who also had helped Kirk in his campaign. Almost three months later on November 25, 1995, The Dallas Morning News published an editorial, which said a new convention center hotel would benefit the city. The council ultimately balked at giving DHP the $40 million in subsidies, and the deal disintegrated.

When former Mayor Laura Miller took office in 2002, she tried a different tactic to secure a convention center hotel for Dallas. Because the prior hotel deal broke down over local incentives, Miller partnered with her husband, former Texas Representative Steve Wolens, to pass legislation that would authorize state incentives for the hotel. Wolens wrote the bill, which allowed any hotel built within 1,000 feet of a convention center to be eligible for a rebate of 10 years' worth of state hotel occupancy and sales taxes.

On March 12, 2003, Miller took seven council members to Austin to lobby for the legislation, but the bill seemed all but doomed. Then in the waning hours of the session, Wolens tacked it on as an amendment to another bill, which was enacted into law.

Armed with the legislation, the city offered to lease property next to the A. Maceo Smith Federal Building on Griffin Street, and proposed including a $20 million moving walkway from the Hyatt Regency hotel and Reunion Arena to the new hotel. The Hyatt and the air rights over Reunion Parking Center are owned by local billionaire Ray Hunt, who also owns Woodbine Development Corp.—one of three developers who bid on the exclusive negotiating rights to develop a hotel. After the city council endorsed the plan, The Dallas Morning News followed suit, publishing an October 20, 2004, editorial saying a convention center hotel was a good investment in Dallas' future.

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