So, then, back to Memorial Auditorium for a moment. But only because council member Ron Natinsky shares with Mayor Pro Tem Dwaine Caraway the hope that sooner than later, the city can and will give the venerable arena a makeover and begin marketing it as an alternative to the Nokia Theatre in Grand Prairie and other similarly sized venues. If it was Caraway who pushed for Memorial's makeover during discussions about demolishing Reunion Arena, it was Natinsky who, as chair of the council's Economic Development Committee, kept pushing for it as a way to generate revenue and add new life to downtown.
"I think it's one of those overlooked assets, which we have a lot of in Dallas," says Natinsky. "Structurally a really good facility. The sight lines are good. What it lacks is an up-to-date sound and lighting system and some minor stuff to do with dressing rooms necessary to bring them up to current standards."
Says Natinsky, Reunion's adios makes this possible, because Reunion wasn't allowed to compete with the American Airlines Center, which is owned by the city but operated by Center Operating Co. and has dibs on major concerts. Memorial, which only holds 10,000 at capacity, has no such restrictions.
"The city is prohibited from building anything new that competes with the AA Center, and what popped up in those discussions was, Memorial, at 10,000 seats, that doesn't conflict with the non-compete the city sort of has with itself for the AA Center. Then we talked about, well, why can't we get some of those acts to come to Memorial, and what would it take to do this, and is there a market for a venue of that size?' ...
"We felt like there was an opportunity in there, and with some remodeling -- and, if I remember, it was between $20 and $30 million, depending on how much spit and polish we use -- we can go out and market it. We can say, 'You'll be in downtown Dallas with parking at the convention center and the excitement of downtown.'"
At which point the conversation, as it did Wednesday during my chat with Caraway, turned to: How will the city afford such a pricey overhaul when budgets are being slashed, services are being cut and city workers are being laid off? Natinsky, like Caraway, points toward revenue-generators he hopes will pave the way. Spoiler alert: Natinsky, unlike the mayor pro tem, does not want to see a tax increase. Not at all. Jump for it.
Obviously, you and Caraway see Memorial as something than can make money for the city, but how ?
First we need to finish the HKS study. They're looking at the convention center, and I was at a walk-through of the convention center, since I am on the DCVB board, just three weeks ago. And as we walked through the convention center, we looked at the unused third floor. We looked at what HKS was studying and went to Memorial Auditorium and talked about some of these issues and sight lines and capacity and not only how it could be used as an entertainment venue, but also an additional piece of our convention business. It's also speakers too -- big names who want to come in and do seminars. All those things rolled in together make a great addition to an actively marketed and usable part of the convention center, as opposed to, 'Oh, we have this round thing at the end and if you want to use it for your rah-rah session go ahead but oh by the way the sound's not very good.'
But where, during these painfully lean budget years, do we come up with $20 to $30 million to overhaul an arena we hope people will use?
We can wipe that out with beer and wine sales. I'm referring to the beer and wine petition coming up. Let's assume they collect the signatures they need, we have an election, and it passes. As chair of the Economic Development Committee, I had economic development staff run the numbers, depending on how conservative you want to be about it, it could generate $15 to $30 million in sales tax revenue alone on an annual basis.
And on top of that you have a whole economic door that opens. Costco -- we don't have one in Dallas. We lost the one in Prestonwood to Plano because they can't sell beer and wine. There are probably three locations in Dallas we could attract a Costco, and that's hundreds of million in investment added to the tax base. That's Costco alone. Then there all those restaurants we as a city aren't getting because they're running off to 'burbs.
Why is everything in DeSoto and Lancaster and just across the city line? Because if you're a restaurant, you don't want to deal with UNICARD. It costs them $20,000 a year a restaurant to manage the UNICARD business out of their own pockets, and it's an inconvenience for customers too. I was at Hacienda with a friend of ours the other day, and the guy said, 'Give me your drivers license,' and his wife said, 'Don't, they'll scan it.' And the waiter gets it, comes back, says, 'Sign this,' and 10 minutes later comes the beer. You said budget shortfall. That alone could knock that out, much less other ideas for being more economical.
When I spoke with Caraway the other day, he said the days of cutting have to stop -- that we have to fix and market what we've got and start selling the city ...
I agree with that. Having lived through a previous city manager who said, 'We'll save ourselves to prosperity by cutting and cutting and cutting,' that doesn't work. We had to rebuild and repair. That doesn't mean we don't have to be more efficient. We're not the most perfectly run organization. When you have 13,000 employees, things don't always run smoothly and efficiently. There are opportunities within the city to be more efficient, and there are more revenue ideas that will pan out.
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What a lot of people don't understand is the city gets its money from two sources: sales tax revenue and property taxes. The money from the kiosk program and other things we do around the city in the grand scheme of things aren't keeping us afloat. A milion here and there is real money. If we can come up with a few million in the scheme of a $1 billion budget, that isn't much, but if can avoid a tax increase or save hours and staff we would have otherwise laid off, that's a way to do it and not put it on the backs of the taxpayers.
The other side of the coin is, [Caraway] said he'd entertain a tax increase, and some others on the council have talked about that. But every penny we hike in property tax we raise $8 million. Let's say we want to raise $24 million. That's three cents. You can only raise it a certain amount till you have a tax-rate rollback election, and it's not going to get us there. And then we cutback hours at rec center and lay off people. I don't have the answer. But now you're raising people's taxes in a bad economy and cutting services, so now you have everyone unhappy.
I know we're getting off-topic here, but, you know, people think when we charge $10 for a dog license or $50 for a permit for something else, they think we make money. Under state law we can't. It's 100 percent cost recovery. None of these things end up being a revenue source for the general fund, so we have to find things that are really out of the box. Let's say an event permit runs $150. We can't make it $300. That doesn't work You can't charge more for a certificate of occupancy than it costs to push the paper aorund. Same with zoning permits. That's a common thing people don't realize. They think every time they write a check they're paying into the city's pot of cash.
So then, back to Memorial. You turn it into a venue you can rent for, let's say $10,000 a night, and then rent it X times a year. Then you have revenues from vendors and concessions. Then, suddenly, there's income to it, where now there's little to no income. I am excited about the possibility with Memorial Auditorium. When you look in the paper that some act is coming to town, and it's at Nokia, I ain't going out there. I'd rather go downtown and wander into Memorial and see what's there and then go get something to eat. Yeah, sure, it's on the southern edge of downtown, but you've got Gilley's, Lee Harvey's and all the stuff in the Cedars. Hell, we got complaints there's too much traffic downtown these days. Never thought that would happen.