Don't Bet on It
What happens when one of those beat-on-the-car-window street hustlers approaches you while you're stopped at a traffic light? And he starts fast-talking how he ran out of gas and he needs to get to Shreveport and he lost his wallet and his baby needs a prescription for the hole in her heart? I know what I say.
"WARNING. YOU ARE STANDING TOO CLOSE TO THE VEHICLE. WARNING. YOU ARE STANDING TOO CLOSE TO THE VEHICLE."
So imagine this. Pretend you're the Dallas City Council and you're stopped at a light. I approach and beat on your car window.
Hey. I got an emergency, man. I need you to sell Reunion Arena to Ray Hunt. It's 26 years old, and you still owe $19 million on it. It's worth $30 million. Just, just...don't interrupt. Now look: I want you to sell it to Ray Hunt, only I want you to swap it, actually, for some land nearby that's worth about the same. Then I want you to sell the land you get in the swap to these other guys for $30 million. But in order to get them to develop the land, I want you to give them $20 million in tax money. Then I want you to pay off the $19 million you still owe on Reunion.
You're gonna be rich!
What do you mean, you don't understand? It's simple. It's 30 for 30 even, then get 30 in the sale, give 20 in the incentive, pay off 19. You're rich! Hurry up! Sign the paper. This deal's walkin' if we ain't talkin'.
Believe it or not, this is exactly what they're telling your stalwart representatives on the council. It's all about this proposed entertainment district, rodeo, racetrack, polo field, nightclub and other hilarities that somebody--not sure who--is supposed to build near the Dallas Convention Center downtown. They're calling it "Dallas City Limits."
It's not that the basic idea is bad. Building an entertainment attraction of some kind next to the convention center might be right. At least one person involved in the project, Billy Bob Barnett, has a track record as an entertainment promoter. If that's a good thing.
But there is another even more inscrutably complex theme in the deal, along with the already overcomplicated real estate stuff and the pea-under-the-shell business with the money: legalized gambling! Barnett's main profile in recent years has been as front man for a million-dollar lobbying team in Austin that, so far, has been unsuccessful in getting a gambling law from the Legislature.
The gambling aspect is even murkier than the rest of it. Barnett's group wants to build a horse-racing track right across the freeway from the convention center with pari-mutuel wagering. The lobbying effort he has helped to captain in Austin is seeking a law to allow slot machines at horse tracks. A slot casino across from the convention center could pour hundreds of millions of dollars into somebody's pockets, even billions, according to people close to this deal.
Mayor Laura Miller is all for gambling. In fact, she has been saying the city should hold off until it sees whether a new law might allow something much classier on the property. Instead of a depressing tin-building slot shack next to a track, she asks, what if the city could land a full-fledged five-star Vegas-style casino/hotel? Think what that might do for the convention center.
And wait: We're not done getting complicated yet. Ray Hunt's people have said that Mr. Hunt absolutely doesn't want any gambling next to his own hotel, the Hyatt Regency at Reunion Tower. But he wouldn't try to stop someone from putting a casino closer to the convention center with a sky bridge to the Hyatt.
The quintessential Dallas approach to sin: "Get thee behind me, Satan, but remember to leave the back door unlocked."
Can you tell what's really going on? Nobody can. But last week your stalwarts on the council were ready to sign anyway.
Oh, oh, are you sure? OK, give me the pen. But it's worth 30, and then we get some land worth 30, and then somebody pays us 30, but we give them 20, but we owe 19 and...uh...what is it for again? It's for the gambling that's not legal, the slot machines or the casinos, nobody knows, but something might become legal, but we have to keep whatever it is away from Mr. Hunt, but we want to keep it close to us, and Mr. Hunt gets a sky bridge.
Uh...sure, we'll sign.
Do you ever wonder how we could have so many potholes, not enough cops, park department crews driving trucks that can't even pass inspection, and they have an annual budget down there of $2 billion? Do you think it could be because the city council chamber is a grifter's paradise?
The whole pitch last week was one big hurry-up, with city council member Don Hill leading the charge. Hill angrily accused the mayor of endangering a wonderful deal for the city with her weird egomaniacal nitpicking.
So what were her nitpicks? Here's one. She kept saying all week what she has said about the principals in this deal for the last several months: They have no money.
It's true. At a press event last week, the first question from reporters, right out of the box, was: "Do you have the financing for it?"
Bill Beuck, one of the main players in the deal, said, "At this time we do not have closure on financing."
For those of you who do not speak Bizalect, saying "we do not have closure on financing" is the same thing as turning your pockets inside out and saying, "Now, Baby, listen, Baby, don't you treat me this-a-way, 'cause I'll be back on my feet someday."
As you may recall, the proper response is, "Don't care if you do, 'cause it's understood: You got no money, and you just ain't no good."
Somebody wants you to do a $30 million swap, $20 million payout, $19 million dollar payoff deal, and you're required to have all your own assets in play. Well, they need to have a little skin in the game too. Otherwise you could wind up getting your asset kicked.
It's kind of like, "Let's you and me play poker. I'll bring the cards and the sandwiches. You bring the money."
Beuck did say he thinks Dallas City Limits will be able to raise the money, once the city has given him terms committing the property and the tax incentive he's seeking. He said it's difficult to get a commitment from anybody on the deal before he can show them exactly what the deal will be. That makes a certain sense, on the surface.
But on projects like Victory (American Airlines Center) and the Mercantile Building, the city was at the table with people who already had the bucks behind them--billions of bucks.
Don Hill kept telling people all week that the City Limits people will get their money, but he said the deal is very complicated, and timing is urgent.
So the city needs to hurry up and take a chance? Why?
Last week I talked about this deal with several downtown and near-downtown landowners, including Michael Anderson of Chavez Properties. He said he wasn't familiar with the Dallas City Limits deal and didn't want to comment on it directly, but he said in general terms he sees red flags whenever people try to push the timing and complexity too hard.
"I always get in a three-point stance when people tell me that it's very, very complicated and that it must be done very, very quickly," Anderson said. "When they say it's complicated and it has to be done fast, it's been my history that I usually don't have time or energy for those deals, because they usually don't pan."
Luckily for you and me, just as the council was rushing to sign, someone remembered that maybe they ought to pass some of this stuff by the lawyers first. City Attorney Tom Perkins took a look and immediately scheduled a closed-door executive session with the council. Perkins isn't discussing his position on this with reporters, he told me, because it's a confidential legal matter. Hence, the executive session.
And far be it from me to put words in Perkins' mouth, but based on body language alone, and the fact that the council stayed in its session with him for almost four hours, along with a few bits and pieces I have gleaned along the way, I can paraphrase Perkins' position on this deal as: "WARNING. YOU ARE STANDING TOO CLOSE TO THE VEHICLE."
I tried unsuccessfully several times last week to reach Beuck, the main front man for Dallas City Limits. Barnett, I was told by a public relations person, had been "called out of town." Someone else told me, "Billy Bob doesn't like big crowds and dealing with the media."
Yeah, well, how about dealing with the public, when you want the public to deal you into a $30 million poker game with public money?
Or what about this? Nobody knows which way the gambling stuff is going to turn. Real estate activity all over downtown seems to be percolating lately. The city's property is just sitting there, no urgent need to get rid of it right away.
What if we called a halt? "WARNING. YOU ARE STANDING TOO CLOSE TO THE VEHICLE." In fact, why not just put the whole thing out there on the block in a very public way, with lots and lots of lovely daylight? Let's do something not complicated, like an up-and-up auction.
Got an idea? Got some money? Come on down. Instead of rushing to complete a deal nobody can understand, why not start from scratch and do it straight up, open to all comers?
After Perkins' executive session, the council gave Dallas City Limits two weeks to answer the questions he had raised. My question is this: If the principals can't answer Perkins' queries and the deal dies, could that be a good thing? In disguise?
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