Why is Mayor Leppert Putting the Brakes on Dallas' Inland Port Future?
This is a bad story about our city. I am going to tell you that our mayor and other people at City Hall are in the process of screwing around in a potentially damaging way with the biggest, most astonishing opportunity for prosperity ever to come to South Dallas. In the process, they are delivering serious competitive advantages to the Perot family's Alliance Airport complex north of Fort Worth in Tarrant County.
A huge new industry is being created in southern Dallas called the "inland port." We did nothing to bring it here. It is a golden goose that fell to our feet because a business guy from out of town saw an opportunity and took a shot.
The inland port project, which is now many huge private projects, is 5 years old. Eventually it will be a combination of gigantic railyards wedded to huge trucking centers tied to warehouses the size of small towns. Some of it is on the ground already, spread over thousands of acres of old goat pasture.
The project has gone through three years of permitting and planning and politics. People are finally ready to open shop. But now all of a sudden, Dallas has decided to get tighter than San Francisco when it comes to planning and zoning requirements for the project.
All of a sudden we need a whole new governing district and lots of "master planning" to be done over an 18-month-to-two-year period. Dallas—which won't even call its own planning department a planning department because we hate planning so much—has become Professor Planitodeathski with these guys.
There is a chase here. Let me cut to it.
Everything that we do to slow up, sit on or hamstring the inland port tends to deliver a mammoth competitive advantage to the Perot family's Alliance Airport development. Alliance and the inland port are direct competitors in an immensely fluid contest, now especially volatile because of the new instability in world economies.
This is all global stuff—huge container ships too fat to fit through the Panama Canal, carrying goods from China to ports in California and Mexico, off-loading sealed containers that are then double-decked on trains and taken somewhere—somewhere being the key—where they can be broken down into truckloads of cargo.
That's what will happen at the inland port. Trainloads of shipping containers will be opened, warehoused or reloaded on trucks and shipped to suppliers in the northeast or in this region.
Here, we are talking about million-plus square-feet warehouses that will employ tens of thousands of people at entry-level jobs with good wages.
Look at the map. Look at us. We're in the middle of the river of trade that flows up from the Pacific seaports to the urban northeast. That's exactly why both Alliance and the inland port are here.
A key element in understanding this is knowing that this new way of shipping goods is very much in flux. Centers similar to the Dallas inland port and Alliance Airport are being developed in Kansas City, St. Louis, Chicago and Denver. Any venture that gets seriously stalled is in danger of dying on the vine when the river of trade jumps somewhere else.
That could happen in South Dallas. The project could go away and die.
Allen Group came here five years ago and made an investment in southern Dallas that no local investor had been willing to make. CEO Richard Allen bought 6,000 acres of land, most of it southwest of the intersection of Interstates 20 and 45, near Union Pacific Railroad's sprawling new 360-acre, high-tech "intermodal terminal." Allen Group will develop most of its land as warehouses.
Lured by this huge nexus of rail, highway and warehousing, other companies have made major investments in the same area—Trammell Crow Company, Pannatoni, ProLogis, Duke Realty, Argent Property Company and more.
Allen says he made a conscious decision to increase his investment in Dallas County rather than California for a reason: "Because they don't have the regulations. They don't have the high taxes. Why do you think Dallas-Fort Worth is the shining star of what's going on in the United States? Texas is a business-friendly state."
So why is Allen so jacked out of shape at this particular moment? Oh, I can tell you the answer to that one. Because Dallas Mayor Tom Leppert, despite explicit public promises to the contrary, is pushing a plan to impose massive new planning and governmental hamstrings on the inland port.
Look, Leppert and his helpers at City Hall are going to tell you the only thing they want to do is come up with a so-called "interlocal agreement" with the county and the small towns south of us to allow rational planning and a proper public voice in southern Dallas development.
That's a sweet cover story that leaves out a nasty chunk of history: This latest attempt, the "interlocal agreement" that Leppert is pushing, is a close cousin to two failed efforts in the last session of the Legislature to pass laws that would have crippled the inland port and delivered unbelievable advantages to the Perots.
One early version would have given Alliance Airport powers of eminent domain in Dallas County and the authority to buy up chunks of the inland port for itself.
The version before that one would have created a new governmental district with an elected body capable of taxing the inland port to pay for development and infrastructure elsewhere. In Dallas we usually bend over backward to give away tax money to our local guys when they want to do a big development. This bill would have sliced money off from the inland port to put into a general fund, the same way a city does it.
That's not incentive. That's bounty.
I'm not saying that Leppert is trying to kill the inland port. But I am saying that he's willing to gamble on its demise in a way that can only benefit the Perots.
I had a chat with Karl Zavitkovsky, director of the City of Dallas Office of Economic Development, in which he derisively dismissed the idea that anybody in Dallas wants to impose a new "district" of any kind on the inland port. Last October 27, The Dallas Morning News took this same line toward Allen in a frosty editorial, practically calling him paranoid for worrying about the motives of people who want to delay his project with a new 18-month study. "Harder to grasp," the editorial inveighed, "is his significant trust issue with everyone at every level of government."
Well, I've got a good way to grasp it. Zavitkovsky forgot to mention, until I asked him about it, that he himself had written the first failed inland port district bill in Austin in 2007.
He said, "That's right, and that's something that went absolutely nowhere."
Wrong. It did go somewhere. Right after Dallas failed to get the Zavitkovsky's bill off the ground, the same idea went straight to the desks of the Perots, who handed it to District 12 Republican State Senator Jane Nelson, who introduced the super beefed-up version that would have allowed an inland port authority to be created in adjoining counties with broad governmental powers interpreted by some analysts to include eminent domain, with a specific grant of authority to acquire infrastructure. I guess we'll have to excuse Allen if he saw the long shadow of the Perots leaning over him in that one.
All of the witnesses testifying before the Legislature in favor of that bill were representatives of "Hillwood—a Perot Company." That bill also went nowhere.
Now we have a third iteration of this same idea, but it's called an "interlocal agreement," by which Dallas, the southern county cities and the regional council of governments would pool money for an expensive "master plan" for the inland port, pass rules for its development and create a quasi-governmental entity to oversee those rules. Basically the City of Dallas is trying to accomplish at the local level what it and the Perots failed to get done in Austin.
The cities of Wilmer and Hutchins and the Dallas County Commissioners Court all have refused to enter the agreement, saying they and the developers are getting along grandly, and they don't want to risk killing the golden goose.
When Dallas County Commissioners voted not to enter the agreement last month, an exasperated Commissioner John Wiley Price started calling County Judge Jim Foster "Foster Gump" (for Forrest Gump, the mentally challenged movie character). And City Hall keeps pushing it, especially Leppert.
Allen says the imposition of a whole new governmental process will bring the project to a screeching halt. Maybe the News thinks he's a worrywart. But he is the one who's in the business.
He told me he knows what it takes to get a sizable company to make a decision to move its major warehousing center to Dallas. He says he's negotiating with Target right now to come to the inland port. "Today I can answer those questions. Today I can negotiate with Target, which I did this morning."
But the minute Dallas gets traction with this interlocal agreement, or maybe with a rumored third attempt at a law in Austin next year, Allen says all of his answers are no longer operational until this new 18-month study process goes through the mill, to say nothing of what happens if somebody tries another port authority bill in the next Legislature. Until that's all sorted out, he's stuck, because new clients won't commit to deals until they know what the permanent picture will be. It's huge money. People move cautiously.
That doesn't mean Allen is dead. But it's a big setback. And why do we want to set back the guy who's doing this in our own backyard?
What I get from Zavitkovsky and the mayor's office and what I read in the Morning News has this strangely laconic what-me-worry nonchalance about it. The guy will probably be OK. Ah, a little planning never hurt anybody that much.
But this is an Olympic footrace.
And once the game changes, Allen is on shakier ground. "Target is not going to go there," he says. "UPS is not going to go there. Walmart is not going to go there, Best Buy, Ikea. Nobody is going to go there when they don't know what the rules are."
So where will they go instead? How about Alliance?
OK, here is the big question. Why would Leppert be pushing for this initiative—especially given his public stance in favor of South Dallas development? I wrote to Leppert's press person, Chris Heinbaugh, and pointed out that Leppert had promised to back off this whole "interlocal agreement" idea in a speech he made some months ago to the Real Estate Council of Dallas. I asked Heinbaugh why Leppert seemed to be pushing it again.
"I don't think that is accurate," Heinbaugh wrote back, saying the mayor was only working to eliminate the valid concerns of developers.
I wrote back, telling Heinbaugh that more than one person at the real estate council told me that the mayor said the interlocal agreement was "off the table." So he changed his position. "Right?"
Didn't hear back by deadline.
Last December Leppert drew some fairly scathing criticism for allowing Ross Perot Jr. to throw a Christmas party for him, a few council members and top city staff at Perot's penthouse at the W Hotel, which Perot owns. No press allowed.
On November 8, Perot Jr. was one of several hosts for a $250,000 fund-raiser for Leppert, who isn't running for anything.
Don't get me wrong about the Perots. They play hard, but straight. Perot Jr. has stated publicly that Dallas' inland port is a "direct threat" to Alliance.
I had a frank talk last week with David Pelletier, director of corporate communications for Hillwood. He said Hillwood isn't afraid of competing for commercial tenants, but the company knows that public infrastructure money is scarce, and Hillwood worries about how that divvy gets made.
"Our point is that at Alliance we have 30 million square feet developed and 29,000 employees. Alliance is a proven commodity," Pelletier tells me. "Our point is, let's finish Alliance, extend the runway to where it needs to be extended to, get the rail infrastructure completed, the highway infrastructure completed before we start spending infrastructure dollars on a project that hasn't really proven itself yet."
So there you have it. The Perots have solid business reasons to slow down Dallas' inland port. And Tom Leppert is walking arm-in-arm with them.
Why wouldn't we run as hard as we can and risk everything we can to get solid business enterprise up and going in southern Dallas? I recently looked at demographic data that show some parts of South Dallas with an average per capita income of less than $9,000.
And why is John Wiley Price so ardent for planning? I asked him. He says it's crazy to put this much infrastructure on the ground and not have a master plan. He thinks the southern Dallas cities have allowed landowners to get away with lousy land-uses in some cases, like a huge salvage yard right along the freeway.
I said OK. "But what do you get from a plan that could possibly be worth screwing up this huge opportunity for South Dallas and giving Alliance the edge instead?"
He started talking about a 30-inch water pipe.
A water pipe? The inland port is a paradigm-shifting economic opportunity—a whole new tomorrow for South Dallas. It's honest work, solid investment. And these people are willing to jack with all that for a water pipe?
Price is an infrastructure wonk. He tells me he never talks to anybody from Perot. But in Leppert's case, we know better. We don't know what they talk about, because the public is not allowed to attend their parties. But it worries Allen. And me, for that matter.
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