MORE

Omni Hotel Helps Relieve Convention Center Debt? Great. All We Need Is 10 of Them.

When the Omni Dallas Hotel opened next to the convention center in downtown Dallas in 2011, the story was that it would dig the convention center out of its financial hole. That was a big part of the pitch in 2008 when then-Mayor Tom Leppert was selling voters on bonds for a city-owned hotel.

Wow. I don't remember. Did we ever look down in that hole? This week in response to an inquiry from City Council member Philip Kingston, the city's chief financial officer provided an unaudited statement of the convention center's fiscal year ending September 30, 2013. When I looked down into that debt cavern, I couldn't even see the hotel.

Halloooo! Hallooo! Can anybody hear me down there? Do you need water? Are you able to urinate?

In 2013, according to data provided by Dallas Chief Financial Officer Jeanne Chipperfield, the convention center ran at an operating loss of $37 million against operating revenues of 32 million. So basically it was in the hole by 117 percent as a so-called "enterprise fund" or self-sufficient entity.

That's not a hole. It's an impact crater.

It stays in business because taxpayers subsidize it to the tune of $53 million a year. Just for scale, our annual budget for streets is $59 million.

I looked back a year to the previous audited statement. In the fiscal year that ended in September 2012, the convention center had an operating loss of $33 million, so over one year its operating losses increased by 12 percent. If you were the one on the gurney and that was your trend line, your loved ones would already be arguing over who got your lawnmower.

It's not money down a rat-hole. The Convention Center is a kind of loss leader that draws a lot of business to the city, especially to hotels and the entertainment sector. But we never see a sharp pencil: how much should taxpayers pay to help out the hotel business, and how much is it helping exactly? And meanwhile, were we not told that opening the new convention hotel would begin to ease the burden?

The Dallas Morning News keeps telling us that revenues are increasing at the Omni, which is definitely a good thing. What I have not seen them talk about much is the long-term debt for the hotel -- a mortgage you and I have co-signed, dear taxpayer -- which actually increased by about $7 million in the most recently available audited statement from the city, not that that means the hotel is not doing well. By all accounts, it is renting rooms ahead of projection. But that only makes the trend at the convention center more ominous. We're pumping in saline and electrolytes, but the vitals just keep getting worse.

Leppert's pitch back in the day was that a major convention hotel was all Dallas needed to make its convention center boom. At the same time, however, experts like UT-San Antonio's Heywood Sanders were saying the convention industry was in tank mode nationally and nothing was ever going to make it boom again.

I do get that you don't close the doors and deep-six an entire industry just because it's on a long-term trajectory to the toilet. If that were true, not a single daily newspaper in American would still be publishing today. You ride it down, liquidate goodwill, mine it for cash-flow and all those other dismal dragged out garage-sale practices that are keeping so many of my old colleagues at dailies in paychecks these days.

But we don't want to deform downtown and even cheat it of what might otherwise be a bright future just to keep a dead letter alive a little longer. From the early discussions about the hotel to debates on where to put a second rail alignment through downtown, the Morning News has been an adamant promoter of putting all the city's eggs in the convention center basket, because ... let's see ... why would that be? Well, does it have anything to do with the convention center being in the otherwise moribund southwest corner of downtown where the people who own the paper also own a lot of land?

Nah. Sorry. Forget I mentioned that, will you?

Downtown could go so many other ways. Kingston sees the future as mainly residential and walk-to-work office, meaning we should put a lot of our eggs and our rail lines in that basket instead of sticking them all in downtown's deadest corner. In that larger equation, the convention center hotel may not be a bad thing, just not much of anything.

At the very least, would it not be a wise thing for the city to debate some of these questions openly and candidly: 1) Is current downtown development policy tipped too much toward the convention center corner of downtown? 2) Do we know what the future is for convention centers nationally? 3) Are we sure a bet on the convention center is our best bet for downtown?

Just asking.


Sponsor Content

Newsletters

All-access pass to top stories, events and offers around town.

Sign Up >

No Thanks!

Remind Me Later >