Leppert Pokes Holes in Charter Amendment, Responds to Anti-Hotel Group's Ads and Much, Much More From the Campaign Trail

Mayor Tom Leppert made two stops on his tireless convention center hotel campaign tour Tuesday as he dropped by for "coffee and conversation" with the Dallas County Council of Republican Women shortly before squaring off with anti-hotel group leader Anne Raymond at the Westin Galleria. Leppert addressed the recent TV ads from Citizens Against the Taxpayer-Owned Hotel at both events, and he exposed a potential flaw in the language of the charter amendment while debating Raymond.

"If you watch TV recently, you'd think I'm the only person for it, right?" Leppert said as several of the 50 attendees at Dallas County Republican Headquarters chuckled. "If they would have asked me, I would have given them pictures, and they could forget the grainy ones."

KXAS-Channel 5 news anchor Brendan Higgins referred to the ads as "the elephant in the room" while moderating the debate sponsored by The Real Estate Council. Raymond noted that Harlan Crow called Leppert before both campaigns kicked off and asked him not to make it personal, but Crow was labeled as "a Park Cities billionaire" at the pro-hotel group's initial press conference at City Hall.

"We continue to stick with the issues," she said to a crowd of approximately 500. "Our commercials really aren't about Mayor Leppert. He's a great guy, and he's doing wonderful things for our city."

Raymond then criticized Leppert for dodging key topics such as the financial information and projections related to the hotel and claimed he has withheld critical information, including an apparent updated version of the April 2008 study issued by HVS Convention, Sports & Entertainment Facilities Consulting.

"I didn't make it up," she said about the ad's attack of Leppert for his tactics during Trinity River toll road campaign. "I read it in the newspaper."

Leppert said it's easy to attack individuals, shifting focus away from "the real issues." With the majority of the city council votes on the hotel receiving 11-2 approval and support from nearly 30 hotels and all of the local business chambers, Leppert made it clear he's not the only one rallying for this project to move forward.

"Dallas deserves a lot more than playing grainy pictures on television and playing those attack ads," he said.

Near the end of the debate, Higgins addressed the pro-hotel group's claim that the charter amendment introduced by CATOH prohibits the city from offering economic incentives to future hotel projects. Raymond appeared delighted to hear the question, joking that she hadn't planted this one, and then she read a passage from the amendment.

(c) This section does not prohibit:

(i) the adoption of a tax increment financing district or tax abatement agreement in accordance with state law;

"It says that you can create a TIF district. It didn't say that you could fund one," Leppert responded. "Think of the creative attorneys out there."

Raymond often cites Fort Worth as the example of how Dallas should have proceeded with financing the hotel. However, as the mayor pointed out, the charter amendment proposed by her group would prohibit the direct financial and land subsidies given to the Fort Worth project.

"This is just poorly written," Leppert said.

Although this exchange didn't appear to resonate with the crowd, Leppert raised serious questions about the charter amendment's language. And one of Leppert's advisors tells us the mayor's concerns are much deeper than his comment at Tuesday's debate. Leppert is also concerned that although TIF and tax abatement agreements can be created, the amendment is vague regarding the expenditure of funds resulting from those measures.

Additionally, the source says Leppert is troubled that it would prevent the city from using Chapter 380 grants or any newly created tools in order to spur other hotel development in the city. Chapter 380 grants authorize municipalities to provide assistance for economic development, as outlined in the Texas Local Government Code. We just received a memo (below) from Assistant City Manager A.C. Gonzalez to council member Ron Natinsky, which outlines these concerns. Natinsky, chair of the council's Economic Development Committee, has also spent time campaigning and debating about the issue.

Prior to this discussion, Raymond mentioned Washington, D.C., as not having a convention center hotel, referring to its plans to subsidize one with $137 million as "what our city should do." Much like the Fort Worth comparison, while mentioning these as evidence that deals can be struck without the publicly owning the hotel is valid, her claim that Dallas should follow such patterns is disingenuous when you consider the amendment on the ballot would block such efforts.

At county GOP headquarters, party chair Jonathan Neerman noted that both Leppert and Natinsky were "proud Republicans" as Natinsky and wife Nancy sat up front and Leppert's wife Laura and daughter Catherine (who's in town visiting from the University of St Andrews in Scotland) grabbed seats near the back.

After highlighting his efforts to make good on his campaign promises of reducing crime, impacting education and spurring economic development, Leppert talked about his 30 years of experience in the private sector.

"What I bring from those 30 years is an understanding that you have to make decisions, you have to make investments and those decisions are going to dictate where you you're going to be in the future," he said. "And in today's world, you have to be competitive."

The mayor then painted a bleak picture of the city's future ranking as a convention destination without a convention center hotel, claiming that Dallas will fall out of the Top 10. "It's a little bit like throwing a rock in a pool. It's gonna go straight down."

Leppert said the opposition wants voters to believe the issue is about two things: a hotel and taxes. It's not about a hotel, he emphasized, but it is about taxes. "It's about jobs. It's about economic development, and it's also about taxes from visitors that pull the burden off of you and me. It is about our future, and that's why I'm so passionate about this."

The anti-hotel group uses St. Louis as an example where a convention center hotel didn't work, but Leppert pointed out that its population peaked in 1950 and dropped 60 percent since then, while the population in Dallas spiked 199 percent. He also said while Dallas has brought companies like Comerica and AT&T to its downtown, St. Louis had six major companies relocate.

"Dallas epitomizes the Sun Belt -- the growth, the vibrant economy, where you can do things," he said. "St. Louis epitomizes the industrial part of our nation that didn't make the right decisions. Do we want to be St. Louis or do we want to be Dallas?"

When an audience member questioned the city's anticipated $100 million deficit, Leppert described it as "self-inflicted" because of the focus on building top notch police and fire departments.

"You're probably hearing ... [uses high-pitched voice] 'Oh my God, a $100 million deficit down there.' We don't have a $100 million deficit," he said. "They want to confuse you. OK? That's what they want to do."

Leppert also addressed the risk: "I'm not going to tell you there's not a risk. I'm going to walk out of here today and there's a risk that I could get killed in a traffic accident. But I'm not going to stay here because there's something out there that I want to go do. OK? The risk is that we don't go forward."

When a concern was raised regarding the confusing yes and no votes on the ballot (yes to say no to the hotel, and no to say yes to the hotel), Leppert blamed it on the opposition.

"The only reason I'm moving around and I look like I've got ADD is because for a week when the city attorney walked in my office ... his first thing to me was: 'It's not my fault, I don't have a choice,'" he said.

At the Westin Galleria debate, Raymond continued to press Leppert about a revised study on the hotel, but he claimed the April '08 study is the most current one.

"So we haven't updated it since the financial crisis and the world fell apart in the hotel market?" Raymond said. "OK. Just wanted to know."

Although Leppert touted the transparency of the project by citing the "reams of paper taller than he is" that "we're happy to share that with anybody," Raymond said she was left in the dark as a member of the city's task force, as she wasn't involved in the process of evaluating the proposals. She also pointed out that, much like what happened to us, the city sued the Attorney General's Office in an attempt to keep documents requested by the anti-hotel group secret.

When asked by Higgins about the focus of the pro-hotel's television ad campaign, Leppert said they would focus on jobs, economic development and the impact of the tax base on funding city services. He also noted that the ads would include "people you would recognize" like restaurateurs. When pushed on whether the ads would mention Crow or Raymond, Leppert said, "We're talking about the issue."

However, Leppert appears in the first ad saying, "These charter changes won't affect the California agency that made the ads or the billionaire that paid for them."

Raymond appeared to have the audience fully engaged when discussing the difference between the American Airlines Center (used as an example by Leppert of a project that spurred economic development) and the hotel. She noted that the city's subsidy to the AAC was capped and the issue was brought before voters without a petition drive, and Raymond described the venues as much different, with the AAC hosting nearly 20,000 mostly-local attendees for 100 nights a year.

"Who in Dallas is going to say, 'Oh, my gosh. There's a new half a billion dollar hotel. Let's all go down there for the evening,'" she said.

Raymond said hotels are only successful in places where there is already demand and excitement in place. "Hotels don't lead development, hotels follow development."

While attorneys for the anti-hotel group crafted the charter amendment, it was the city attorney's office that wrote the ballot language, which follows the memo referenced earlier below.

A.C. Gonzalez memo to Ron Natinsky

SECTION 2. That electronic and computerized voting systems must be used for voting at and on the date of the special election in compliance with the provisions of the Texas Election Code, as amended, and the vote must be upon an official ballot prepared in such a manner as will permit the voters to vote "Yes" or "No" upon the proposition submitted, with the proposition to be expressed on the official ballot in a form substantially as follows:

PROPOSITION NO. 1 Shall Chapter XI of the Charter of the City of Dallas be amended by adding Section 15 to: (1) prohibit the city from, directly or indirectly, using, lending, or transferring city money or property, or lending the city's credit, for the purpose of siting, financing, constructing, acquiring, leasing, or operating a hotel or other lodging facility; (2) prohibit the city from creating, authorizing, or sponsoring any special-purpose governmental entity or any non-profit corporation (including a local government corporation or a public facility corporation), or authorizing the issuance of bonds, notes, or other debt instruments by such special-purpose governmental entity or non-profit corporation, for the purpose of siting, financing, constructing, acquiring, leasing, or operating a hotel or other lodging facility; (3) require the city to assume the powers and duties of any existing local government corporation previously created or authorized by the city for the purpose of siting, financing, constructing, acquiring, leasing, or operating a hotel or other lodging facility; (4) require the city to alter the structure, organization, programs, and activities of any existing public facility corporation sponsored by the city and to prohibit such corporation from siting, financing, constructing, acquiring, leasing, or operating a hotel or other lodging facility; and (5) provide certain exceptions?

PROPOSITION NO. 2 Shall Chapter XI of the Charter of the City of Dallas be amended by adding Section 16 to: (1) prohibit the city of Dallas (including any special purpose governmental entity, nonprofit corporation, and any other entity created or controlled by the city) from providing more than a total of $1,000,000 in financial assistance (including any grant of tax concessions or relief; any authorization of debt or debt instruments; any expenditure of public funds; and any exchange, grant, or below-market sale or lease of city-owned land) to any private development project (the primary purpose of which is to construct or aid in the construction, renovation, repair, alteration, or remodeling of any hotel, convention center, luxury residential condominium, or retail facility, or the infrastructure of any such facility), unless the city gives at least 65 days' public notice (including posting the notice on the city's website for the entire 65-day notice period) before approving the financial assistance and obtains voter approval for the financial assistance at a regular or special election when voter approval is required by a petition that is signed by at least 500 residents of the city and filed with the city secretary within 60 days after the public notice is posted; (2) exempt from the financial assistance restrictions any retail development of less than 50,000 square feet that serves a subsidized residential development; and (3) provide a severability clause?

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