Dallas to Get in the Hotel Biz -- And Turndown Service Won't Be an Option
After more than an hour of debate, the Dallas City Council voted today to approve two addendum items that will spend $170,000 of taxpayers' money on a feasibility study to refinance the Dallas Convention Center and $500,000 of Dallas Convention & Visitors Bureau cash on an option to potentially spend $40 million of city money on a parking lot near the convention center. This wasn't a big surprise. Neither was the fact that the only two council members voting in opposition to both items were Angela Hunt and Mitchell Rasansky.
Rasansky came out swinging when the feasibility study was on the table, saying he was very concerned about the convention center and has a problem refinancing the $262 million in remaining debt without knowing what any additional money will be used for. Dave Cook, the city's chief financial officer, said the money could be used to build additional parking or more meeting room space. Oh, and maybe for the land for a potential convention center hotel.
Rasansky asked council member Ron Natinsky, chair of the city's Economic Development Committee and big-time advocate for a hotel, to amend his motion to say any funds had to be used on the existing convention center and not for the land or any costs for a hotel. Natinsky started to tell Rasansky where to stick it until Rasansky pressed him for a simple "yes" or "no." Natinsky said, "No."
After a 10-2 vote approving the refinancing, Rasansky was first to chime in on the land item. He called the item "extremely flawed," citing problems with the cost of the property by two independent appraisers. He was amazed that both of them came up with appraisals of $110 per square foot, and he said property right across the street from City Hall had recently been sold at $20.78 per square foot.
Rasansky went on to say the convention center hotel in Denver has lost $50 million and the one in Houston is off to a bad start. He also read a letter to the city from 2004 saying a convention center hotel presented considerable risk to the city of Dallas.
Then Natinsky fought back, saying this is the smart thing to do. He pointed out that only half of the land will be needed for a potential hotel and the other half could be sold for a profit.
Deputy Mayor Pro Tem Dwaine Caraway said Dallas lost the Cowboys, Lone Star Park, Texas Motor Speedway and games at the Cotton Bowl. What this has to do with the convention center hotel, dunno. "I'm not going to take a chance and wait," Caraway said. "Time is changing and now other cities are defeating us."
Caraway also felt it necessary to point out that he doesn't own land downtown. He made sure to kiss a little ass too. "Mayor, thank you for your leadership on this," Caraway said.
Like Rasansky, Hunt had questions about the appraisal. She said the difference between the Dallas Central Appraisal District's value of the property compared to the amount the two appraisers came up with was remarkable. Look, Angela. It's only $32.5 million. Chill.
She brought up an excellent point. How much in taxes is DCAD costing the city with such out-of-whack appraisals?
Hunt said she wants to support a hotel for the convention center, but she doesn't feel like she has enough information. She urged Assistant City Manager A.C. Gonzalez to do a thorough analysis of the before and after economic impacts of other convention center hotels and what can be learned from hotels that have failed.
Carolyn Davis seemed to be siding with Hunt and Rasansky when she said, "I guess we really want a convention center hotel for this risk." However, she stumbled when she admitted she hadn't made up her mind yet, and she ultimately voted to approve the item despite calling for a record vote.
Sheffie Kadane said the staff has proven to him that a convention center hotel is needed. Linda Koop, not so much. "I'm not completely sold on a convention center hotel," she said. But Koop voted to approve this item because she hopes the moving forward with the process will yield more answers.
Mayor Leppert had the last word, if you don't count an interruption during the vote by Davis. Leppert said the convention center is uncompetitive in today's world and this is the "prudent and normal process" when moving forward with big projects. He also issued a verbal "gold star" to Phillip Jones and the Dallas Convention & Visitors Bureau for putting up the $500,000 and said this will "determine the future of downtown."
So here's the deal. The council and mayor want everyone to believe that this vote doesn't green-light the convention center hotel, which could include a $150 million subsidy from taxpayers. But it really does.
You see, the only people expressing any concern over the hotel were Hunt, Rasansky and Koop (to a certain extent). If the rest of the council is on board with it, given what little information is out there, why would city staff be motivated to provide the appropriate research that could only give more council members concerns?
The pro-Leppert forces -- namely Caraway, Natinsky and Dave Neumann -- made it very clear where they stand. Even someone who seemed worried about the vote, Carolyn Davis, eventually sided with Leppert when the vote came up.
Dallas will get its convention center hotel. The only question left is what it's gonna cost taxpayers. But don't worry about that. They'll figure it out later.
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