City Hall

Headache Hotel and Other Dallas City Council SUPs and WTFs

I've yet to attend a city council meeting I didn't enjoy, and yesterday's was no exception. How can one not feel satisfied after bearing witness to important votes on the convention center hotel and gas drilling, a council member admitting to witnessing a drug deal in progress and doing nothing about it, tension between a council member and Mayor Tom Leppert, and, um, a racial slur thrown at another council member? All in a day's work at the horseshoe.

Let's hit the ground running with the convention center hotel item. Expectedly, this item was pulled for discussion by Mitchell Rasansky, but it was also pulled by Dave Neumann. This piqued my interest, as Neumann has been very loyal to Leppert and has indicated that he was going along for the ride on this one. Neumann spoke first, and I honestly expected that he'd try to explain what a great thing this is to help out his buddy, Mayor Tom. His first question to CFO Dave Cook seemed to confirm my suspicion, as he asked Cook to walk the council through the city's obligation on this particular item.

Neumann did this because this addendum item was only to approve the "plans" for $42 million in certificates of obligation to purchase land that will be used as a potential convention center hotel site; the "real" vote on this will be April 23. Cook's response to what the obligation would be was, "Essentially, none," and Cook is technically correct. But then Neumann surprised nearly everyone when he said the $42 million was "a significant amount" and he was "anxious to get more specific information."

"I continue to be hesitant about making sure that we don't move forward with investing taxpayers' money on a project until we know the financial dynamics of the investment," Neumann said.

Had Neumann been spending too much time hanging out with Rasansky and Angela Hunt? Nah, this was all prefaced with, "I'm supportive of this." Neumann went on to explain his three main areas of concern: the acquisition of the property, the development of the property and the feasibility of running a hotel on the property. He also said he wants to know how much public investment there will be and what impact a convention center hotel will have on Dallas' hotel and hospitality industry, which Neumann said was struggling, but rebounding, with a 60-plus percent occupancy rate.

I'm glad he brought that up, because I read an article about the reopening of the Stoneleigh Hotel after its $36-million renovation, which points out that Dallas' hotel occupancy rate was 60.3 percent last year -- much, much lower than the average rate of 68.5 percent for the nation's top 25 markets. This is not a number Neumann should be touting. It's one of many reasons why adding another 1,000 hotel rooms in Dallas makes absolutely no sense.

Rasansky highlighted many of the concerns he's been having, most notably the two appraisals for the property, which he called "fraudulent." He said the process had been done backward, was the wrong way of doing business, and he's "vehemently opposed" to the land purchase. Rasansky also addressed an issue brought up in Tuesday's preview of the meeting when I asked, "So, what if a deal doesn't work out?"

"Well, let me tell you something. If we're stuck with that property, we are never going to be able to sell it for $110 per square foot," he said.

Right after I asked that question, I said no one is asking it because the hotel is going to be built no matter what. Angela Hunt agrees. "I think we've essentially made the decision -- although we haven't voted on it -- to go forward with the convention center hotel," she said in the meeting.

Hunt also exposed some misinformation about the appraisals. All along the way, Hunt and Rasansky have said that part of the reason why the appraisals were high is because they were done assuming the convention center hotel was already on the land, which was part of the madness surrounding the appraisals. In fact, Ron Natinsky brought this up in last Tuesday's Economic Development Committee meeting as a way to defend the high appraisal amounts of $110 per square foot. Not one city official in that room (and there were several) corrected Natinsky when he said this.

However, in yesterday's council meeting, Theresa O'Donnell said the appraisals had nothing to do with what would be built on the property. O'Donnell, who is the director of Development Services for the City of Dallas, said the convention center hotel was mentioned in the appraisals, but they were based solely on comparable sales in the area of "similar size and characteristics." She said one of the appraisers found four comparable sales, while the other one found eight. As we haven't yet seen the appraisals, well, we don't know for sure.

Hunt added that she is concerned that a vote by the public was circumvented on this item, and she's is still waiting for an analysis of the economic benefits other cities have seen from building convention center hotels. Council member Linda Koop also said she still needs some information, but she voted to approve the item like a good girl.

The pro-CCH forces were led by Deputy Mayor Pro Tem Dwaine Caraway, who said he appreciated his colleagues' concerns and requested that staff meet with them in private to answer their questions. He said it's time to move forward with excitement and mentioned that a friend of his purchased property in the area for $175 per square foot, so the appraisal amount shouldn't be a concern. "I'm very excited about the convention center hotel," Caraway said. "It's very clear I support it."

Council member Steve Salazar also spoke in favor, saying that the $60 million Mercantile redevelopment from 2005 wasn't voted on by the public. This was also brought up by Caraway, and as I said then, that was a tax incentive deal, not money coming outta voters pockets.

Since only half of the land will be needed for the hotel, Salazar asked if the remaining property could be used to help offset the cost. First Assistant City Manager Ryan Evans said that is a possibility. The excess land could be either be used in conjunction with the hotel to raise revenues or sold to help with financing. Which, on the face of it, is laughable: The city buys property it can't afford, then offers to sell half of it to help pay for the whole thing? Only in Dallas. Here's a prediction: The land will be part of what the developer will be given as part of building the hotel. The city won't see a dime from it.

The vote was 13-2, with Hunt and Rasansky voting no. Natinsky passed after originally wanting to speak on the item, just what you want to see from the chair of the Economic Development Committee. I guess if you can't say something nice, don't say it at all.

Natinsky was first to chime in on the gas drilling item, making a motion to amend the item to include more land and about $370,000 in extra revenue. He said there were a lot of misconceptions about this item because this was only a lease deal, and SUPs would control any drilling.

Hunt and Rasnasky teamed up again in opposition, with Hunt saying she is upset that there were no public hearings about the issue and she has "grave concerns" about drilling. She said she hoped that the city had learned a lesson from the "kiosks fiasco," which Hunt said has resulted in many calls and complaints from her constituents.

"This is not about coming back to us with every SUP -- it's about philosophical decision making about whether or not our residents want us to do this in general," she said. "It's naïve of us to think the drilling is either not obtrusive or not going to cause any scarring of our public property."

Rasansky said this is not a good deal for the homeowners in areas near potential drilling sites and that the current ordinance of keeping drilling 300 feet away from residences needed to be changed. He also pointed out that the 36-month lease was deceptive because the lease will keep going if gas is found. "If production comes on, it could be for three years or it could be for 60 years. It's forever."

Council member Carolyn Davis voiced her opposition after spending time at a location where she was trained about the drilling process. She said she was concerned about the proximity to homes and the potential for an explosion. "I don't think I want it in my backyard," she said. "I don't care if it's 300 or 1,000 feet."

Steve Salazar, whose district is most impacted by the lease agreement, asked if there was a way for him and Dave Neumann, whose district includes the majority of the other properties, to not have any drilling in other council districts and let them use the proceeds in their districts. He stressed that most of the properties were in heavy industrial or commercial areas, away from neighborhoods. Salazar also said private companies are able to drill on their properties with an SUP, so the city should cash in. He basically told his colleagues to vote in favor of the item if they wanted to be able to spend the money.

Leppert had the last word and said he talked with Fort Worth Mayor Mike Moncrief, who told him that the gas drilling in Forth Worth has been well received by the community. He then told the council that money from this would be used for alleys, swimming pools and other services. What he didn't say is what he was getting at, which is, Umm ...Mary Suhm like already put $20 million of this into our current budget, so we're kinda screwed if you don't vote in favor of this.

It was moved to a vote, and Hunt quickly recognized that Rasansky had left the room. In a panic, she called for a record vote to buy some time, but he never showed. The item passed 12-2 with Hunt and Davis voting no and Rasansky absent.

Now that you've had your fill of the big entrees, you shall be rewarded with dessert. The first item comes from Dave Neumann, who pulled agenda item 13 to give City Attorney Tom Perkins some props for all the blighted properties he's helped get demolished. Then Neumann told a story about how he drove past a rundown property and witnessed a drug deal in progress.

"I didn't get out of my car. I didn't call 311. I didn't call 911," Neumann said. "Maybe I should have."

Holy shit, if our council members are witnessing crimes and not reporting them, the city is in more trouble than we thought. This is one of the dumbest things I've heard in a council meeting.

Next up: Ransansky, who had a few interesting quotes from the day. The first one came after Mayor Leppert interrupted him when he was speaking during the open-microphone session. Agitated, Rasansky said, "Mayor, do me a favor. I have the floor." Shortly afterward, Leppert said he would be keeping the council comments to one round and three minutes each because of the lengthy agenda. "We need to be more transparent around here, and I see we're getting away from that," Rasansky said.

Rasansky was at it again when the council was discussing barricades, and he pressed Assistant City Manager Ramon Miguez about using ones with blinking lights, something Rasansky has been asking about for a long time. Rasansky said a nurse from Presbyterian Hospital was suing the city because of this and "I might be offering my services as a witness."

Finally, what fun is a council day without someone going after Dwaine Caraway? Yesterday, it was William Hopkins, a regular at the council meetings, who referred to Caraway as the council's "house nigger." Caraway said he wasn't going to lose his cool and told Hopkins, who's also African American, that schools were watching the meeting on TV and that it was being broadcast live on the radio. Hopkins kept running his mouth at Caraway, leading to his removal from the chambers.

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Sam Merten
Contact: Sam Merten