Documents released yesterday evening by the city reveal that Dallas City Manager Mary Suhm signed a side deal with a gas-drilling company five years ago to help the company win drilling rights on city parkland, even though she had assured the City Council and park board that drilling on parkland would be banned.
That company, Trinity East Energy, comes before the city plan commission today to collect on the deal, which flies in the face of the express will of city elected officials. The deal came to light only yesterday after City Council member Scott Griggs won a long fight to gain access to public documents.
Some of the timing is breathtaking. Suhm signed the deal with Trinity East six months after her own staff had assured the council that "there will be no drilling on the surface of city of Dallas parkland." But the deal states Suhm and her staff were "reasonably confident" they would be able to get Trinity East the right to drill on parkland.
The city's elected officials have acted on multiple occasions with the assumption a ban on park drilling was in place. Two months before Suhm signed her deal, the Dallas Park and Recreation Board passed resolution that said: "The city of Dallas is prohibiting surface level drilling and mineral production on parkland as part of the gas leases."
Five days after Suhm signed her deal with Trinity East, the City Council passed a resolution on subsurface drilling, assuming a ban on surface drilling on parkland. Why, Griggs asked yesterday, did no one stand up at that time to tell the council, "By the way, we signed an agreement five days ago" to help a drilling company achieve the opposite of what the council was voting to do?
Despite that resolution, the council next approved the city's drilling lease agreement with Trinity East, negotiated by Suhm and city lawyers in the same time frame with her side deal. That lease agreement expressly grants Trinity East surface drilling rights on the pieces of parkland coming before the plan commission today. Griggs and council member Angela Hunt said yesterday, however, that the way lease agreement described the places that could be drilled made it hard to tell where exactly the drilling sites might be located -- at least when it came to parkland. Other parcels covered by the lease were described precisely and geographically, but the two parkland parcels were referred to only by the equivalent of nicknames.
Hunt suggested yesterday that Trinity East needed both pieces -- a lease guaranteeing the right to drill on parkland but also Suhm's side-deal promise that staff would lobby for them to win additional "special use permits" to complete the deal. In other words, after the council and park board had voted to give them nothing on parkland, Suhm and city lawyers apparently gave them half of what they wanted and promised to deliver the rest later.
I sent Suhm a detailed email last night with a copy of her deal letter, asking for comment, but she hasn't responded yet.
Dallas Cothrum, executive vice president of Masterplan, a land-use and zoning consulting firm representing Trinity East at City Hall, told me this morning that Trinity East has based major trust and reliance on its side agreement with Suhm.
"I think that's one of the reasons that Trinity East was comfortable in handing over $19 million, that they had something in writing from the city manager," Cothrum said.
He said he thinks the letter should strongly influence today's outcome at the plan commission. "They [Trinity East] got a letter from the leader of that place [City Hall], and now all they are asking for is the benefit of that bargain."
Cothrum said he had not discussed litigation with his client but assumed it's the next step if the city fails to honor the agreement and grant the drilling permits Trinity East is seeking.
"Some people have said the city can just give back the money," he said. "It's not that simple. [Trinity East] hasn't said this -- they haven't told me and I haven't asked -- but they [the city] will get sued for hundreds and hundreds of millions of dollars."
He said the city should not assume Trinity East will behave like Exxon, whose subsidiary recently walked away from a drilling application with the city even though it had paid the city $20 million for the right to drill.
"Exxon just decided I think they were tired of looking bad at the country club," he said, "so they just flushed 20 million down the drain."
Trinity East, he said, is a relatively small independent company that can't afford to walk on its investment: "They've spent many millions more off-site (in surrounding suburbs) wrapping up leases around it."
He said the Dallas wells would be the biggest and the other peripheral sites will not be economic to drill if the Dallas deals fall through. "If they can't drill for the Dallas gas then those smaller eases around it are worthless, too, so there are hundreds of millions of dollars at risk."
"This is a business-killer for them. All these guys lose their jobs and are out of work if they can't drill for this gas."
Considering that Trinity East's side deal with Suhm is so vital to the company's existence, to the council's plans for protecting parkland and to the city taxpayers' pocketbook, one obvious question is why Suhm fought to keep it under wraps for so long, even though it was something of an open secret. Griggs and Hunt reminded me the Observer had reported the rumored existence of a mystery deal between City Hall and Trinity East last May.
"This is that deal," Griggs said.
In a May 15 Q&A piece on Unfair Park with D. Stephen Fort of Trinity East, Leslie Minora quoted Fort as alluding to a "discussion with the city" and certain "documentation that I can't discuss" that Fort said made it "clear that adding that as a permitted use would not be an issue." Fort declined to name the city official or officials with whom he had struck his bargain. On the August 15 deal letter unearthed yesterday by Griggs, the two signatures at the bottom of the page belong to Fort and Suhm.
On signing its lease, Trinity East paid the city more than $19 million for drilling rights and agreed to make additional valuable lease payments for the surface land it would occupy. Griggs pointed out yesterday that Suhm had already included the money in her budget for the next year when the lease was signed.
Suhm's deal letter with Trinity states, "The city staff has advised us that although they can make no guarantees, they are reasonably confident that Trinity East can be granted the right to use the 22-acre are tract referred to as the 'Radio Tower Tract ... as a drill site location.'"
That site is one of two on parkland to be presented to the plan commission today with a recommendation by city staff that Trinity East be granted the right to do surface drilling on both. Community groups and anti-fracking activists have complained bitterly that the staff's support of drilling on parkland is a betrayal of repeated promises to the public that the city would not allow drilling in parks.
But those promises were made by elected officials. Yesterday's revelation shows that staff at the same time was making explicit promises to undermine the will of those officials.
Griggs and Hunt said they had never been informed of the existence of Suhm's agreement. Griggs said the city secretary initially refused to release it to him and relented only when City Attorney Tom Perkins told her it was clearly a public document. In her piece last May, Minora asked Fort point-blank for the name of the person with whom he had struck a deal at City Hall.
"I'm not gonna name names," he told her, "because I'd rather not do that."
Now he doesn't have to.
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