At tomorrow's meeting, the city council is expected to approve a tax abatement estimated at approximately $1.7 million and an economic grant of $250,000 for Dean Foods. Pete Schenkel, a consultant for Dean who previously served as vice chair of its board, says the nation's largest dairy producer will proceed with its plans to add around $85 million to the tax base regardless of whether the council approves the items.
However, Schenkel stresses Dean's decision to renovate property near Mountain Creek Lake instead of building its new manufacturing plant at a site in Virginia was based on conversations he had with city officials and council members.
"Based on maybe a wink of the eye or something, we felt we would be able to get a tax arrangement with the city," he tells Unfair Park.
Schenkel, a member of the Dallas Citizens Council, is the treasurer for mayoral candidate Ron Natinsky. When asked if he discussed the abatement and grant with Natinsky, who chairs the council's Economic Development Committee, Schenkel says he spoke to "every council member."
But that's not what Natinsky says. He claims the first time he heard about the issue was when it reached his committee for a March 7 briefing. Yet the memo about the briefing was sent March 4, and Natinsky mentioned the investment by Dean at a March 3 press conference outside City Hall.
Natinsky refuses to say whether he supports approval of the items, pointing out that he plans to recuse himself because of his relationship with Schenkel. "I could vote, but I'm not going to," he says.
Karl Zavitkovsky, director of the city's Office of Economic Development, doesn't recall detailed conversations about the tax break and subsidy with anyone outside of city staff. He says Dean didn't commit to the Dallas site until negotiations with the city had concluded.
"Dean said, 'OK, we're pregnant. We're going forward with this,'" he says. "They had a handshake."
Zavitkovsky calls the incentives "a good deal" and claims he had no idea Dean would decide to proceed without them.
"You can always ask the question whether someone would come anyway, and you always wonder if you left something on the table," he says, adding, "I have every reason to believe these negotiations were conducted in good faith."
If approved by the council, Dean would receive a 10-year, 90 percent tax abatement on $40 million worth of equipment and other personal property while paying taxes in full for the land and building valued at $45 million.
