The city council debate on the Palladium and City Center-Madison development deals downtown will rise or fall on an issue that has little to do with downtown but everything to do with the votes on the council.
It is the very strong impression of certain key council members that both of these developers are willing to kick out millions of dollars from their deals to put into special programs in certain council districts. In fact, the developers seem to be offering competing amounts to the council members backing their deal, in spite of what the mayor says was an informal agreement not to play this game.
It's not clear where this idea came from: Are the developers trying to dangle it or are city council members trying to wangle it? Palladium is the company seeking a subsidy to build near the new Hicks/Perot arena, and Madison is the company asking for money to open fancy shops downtown. One council member told me he thinks there could be as much as $12 million available from the Palladium deal alone.
He said, "I want my money."
And you know what? If this money really were available, the council members seeking it would be doing exactly the right thing for their constituents. Downtown is being developed entirely for rich people. The yuppie loft thing in the old buildings, which assumes downtown will be vibrant once it has been taken over entirely by infertile cappuccino-heads, was launched on the back of a $25 million subsidy with money hijacked from poor neighborhoods. Downtown owes poor people money.
But none of that is really in the underlying issue I'm trying to excavate here, which is about governance and whether we are going to bribe ourselves with some of our own money to give away the rest of our own money. Here is why this comes up:
The kind of tax subsidy these developers want is provided for in a state law setting up a certain kind of development district. The law says money raised from taxes inside these districts must be spent on improvements inside the districts, with a few exceptions. One is affordable housing, on the theory that you can't build cheap housing inside a high-dollar real estate district. So why not take the money out to an area where the land is cheaper and get more houses for your buck?
The minority caucus on the council has every reason to hold low-income housing as its urgent priority. City Hall has a terrible track record on this issue, once allowing tens of millions of dollars in federal assistance to lapse because it went unused.
Mayor Pro Tem Donald Hill told me that this one issue is his priority Numero Uno in weighing the downtown development proposals. "From my perspective, that stream of income is a benefit that is on par with the construction jobs and the permanent jobs and the economic stimulus that the $600 million [Palladium] development provides.
"It's just that important to me."
I asked about it, because a very interesting thing had happened the week before at the end of a grueling day-long council briefing on Palladium. Mayor Laura Miller had wanted to wait to schedule a vote on the Palladium deal until studies could be completed and documents acquired. Ken Wong, the Palladium point man, badly did not want the vote delayed.
After asking the mayor several times not to delay the Palladium vote beyond May--and being turned down by her--Mayor Pro Tem Hill took the unusual step of getting four other council members to sign a petition overriding the mayor's wishes and forcing a vote in May.
One was Mary Poss. How Poss justifies waving the flag for anything that has to do with the Perot family I cannot imagine. Her husband, lawyer Mike Poss, has worked for the Perots in key roles off and on for decades. He's in, he's out, he's back in, he's back out. If she doesn't have a legal voting conflict at the moment, she might at least pipe down for decency's sake. But instead she makes these speeches about how everybody's being mean to the poor, poor pitiful Perots. It's like the faithful retainer at Windsor Castle shaking her finger at the tabloid press: "It's not roit, izzit, traytin' the monarch like she was a bloody punchin' bag."
The other three who joined Hill in making sure Wong got his way were James Fantroy, Maxine Thornton-Reese and John Loza, all of whom have minority-majority districts.
It rang my bell. Poss I could figure. She just needs to be on television doing right for the boss. But why was the rest of the Palladium constituency on the council all from the minority side of the equation?
Leo Chaney, who represents the South Dallas-Fair Park area, told me he hopes the Palladium deal may yield as much as $12 million for affordable housing. "That's how the Palladium-Victory group got me listening to them, because they agreed to put it in...
"I insisted that...I need something for South Dallas-Fair Park, and I carry a certain bloc of votes."
Chaney said he thinks it will be possible to use the money any number of ways. "I can do home repair. The Legislature left it kind of vague how we address affordable housing. It could be new home development."
The idea of a significant stream of cash for housing development is going to be very attractive to the leadership in Southern Dallas, where the need is great and where clergy and other leaders have banded together in recent years to form their own housing ventures. Mayor Miller says she understands all that and is not unsympathetic, but she had hoped to keep affordable housing out of the downtown debate at least long enough to decide the downtown tax increment financing (TIF) districts on their own merits.
"We were going to do Madison and Palladium on their merits," Miller told me, "and [then later] have a discussion about whether or not we were going to do affordable housing outside of the TIFs as a policy, because we have never spent TIF money outside a TIF ever for anything."
She said the same council bloc pushing for TIF money for affordable housing is also pushing to get an even larger amount for housing from the city's next general obligation bond issue. She said some council members are sympathetic to the idea of using money from the bond issue for affordable housing, but she suggested both ideas--TIF money and bond money--can't fly at the same time. "You pick your horse."
Leo Chaney disagrees.
"I want my money," he told me. "I want my money on top of the monies I get from the city. That's the way I can revitalize and reinvigorate these neighborhoods."
Chaney and Donald Hill are not trying to get this money for their own pockets. They are fighting for help for their constituents against a historical backdrop of malignant neglect.
But here's what gets me. The City Center-Madison TIF had taken the affordable housing thing out of its paperwork to the council. One week after Hill made his end run around the mayor and got Palladium's deal slated for a vote, the board of the City Center-Madison TIF voted to formally put a matching "five percent" offer for affordable housing back on the table in their deal.
I asked Miles Zitmore, chairman of that board, if City Center had seen Palladium getting some traction with Hill and his group on the city council and decided, "Hey, we better get in that housing game, too."
He said, "I don't think anybody actually verbalized that, but, well, yeah, this seems to be what is being requested and we ought to do it."
And here's the bad joke. After some lengthy discussions with city staff, I finally figured out that neither Palladium nor City Center-Madison is offering five percent of their own money. They're offering us our money.
I know. It took me awhile, too, to get this hat on my head, I think because of the sheer gall factor. Let me try to run it down:
The developers don't get to keep 100 percent of their own taxes anyway. Under the proposals, Palladium would keep 95 percent of its taxes and Madison just over 50 percent.
They're telling the council it can use the part that the developers don't get to keep--the portion that is already the city's own money anyway--for affordable housing. Well, duh. It's the council's money. The council can do what it wants with its own tax revenue. Exsqueeze me, but did we not fight a war with the British over this?
Wong of Palladium says it was his understanding all along that it was the council's prerogative to decide whether to spend its own share of the revenue from his project for affordable housing. He says his group never promised anybody it could actually deliver any money for housing. "We said, 'We're open to that, but you guys make that determination, not us.'"
And guess what else? That 5 percent that Chaney thought might produce $12 million from Palladium? Staff says when you take a real sharp pencil to it you should count on more like $3.4 million.
You know, all week long while I worked on this, I kept having this little nightmare daydream in which some guys come to me, and they tell me they intend to rob me at gunpoint in the near future. They say that they don't have a gun yet, so they wonder if they can borrow some money. And when I ask why I would go along with that, they tell me as an incentive they will agree to leave me enough money for dinner and a movie.
And because I have been thinking about this stuff too long, I say, "Any movie I want?"
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