City Hall

Weeping Alligator Tears the Whole Way, City Hall Will Erase South Dallas

At the far eastern end of The Cedars-South Dallas federal opportunity zone is Jim's Car Wash, closed by the city. At the eastern end is Matthews Southwest, South Side on Lamar, Gilley's and police headquarters.
At the far eastern end of The Cedars-South Dallas federal opportunity zone is Jim's Car Wash, closed by the city. At the eastern end is Matthews Southwest, South Side on Lamar, Gilley's and police headquarters. Jim Schutze
Soaring property values in one of the city’s poorest neighborhoods should not have to be bad news. Especially when we take into account the decades of racial oppression and red-lining that have kept a neighborhood poor, we ought to rejoice when it rebounds. Unless.

Unless the people who live there now get hammered, dispossessed, displaced, tossed onto streets that may kill them. Then, no, that’s not a thing to celebrate.

Yet that’s exactly how the story of South Dallas is progressing, behind closed doors, with all of the big shots assembled, conspiring to keep what lies ahead secret, hidden from the people who will be most powerfully affected.

Over the last week or so, I have been writing about the stunning escalation of property values in old South Dallas, a traditionally black neighborhood a mile and a half east/southeast of downtown, roughly centered on Fair Park, where the State Fair takes place every year. Values on small unimproved houses, some of which are over 100 years old, have shot up as much as 100% to 200% in only one or two years.

The forces driving this escalation in value probably have little to do so far with big development schemes. As I reported Monday, people familiar with the area are more likely to attribute the growth in value to gradual inroads by Hispanics. They say Hispanics are replacing a pauperized black population left behind by the out-migration of upwardly mobile black families to the suburbs over the last three decades.

“Some of them are pushed out of the city. Some are pushed in. They double up. And some of them die. They wind up on the street and die.” — John Fullinwider

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But scattered over these blocks are elderly, poor, law-abiding homeowners and renters who have called South Dallas home for generations. As longtime community organizer and activist John Fullinwider told me last week, these are the people who will feel the cruelest bite of displacement:

“Some of them are pushed out of the city,” he said. “Some are pushed in. They double up. And some of them die. They wind up on the street and die.”

A mile due southwest from South Dallas lies the area now called the Cedars, across I-30 and south of downtown, where a development company called Matthews Southwest has created a sprawling, rented-up, fashionable new residential district in what were once abandoned warehouses and industrial buildings. Matthews Southwest is looking purposefully back east toward South Dallas.

Last week, I told you about a meeting I attended in the offices of a nonprofit organization made up of Matthews Southwest employees, designated by the city to operate something called a public improvement district or PID. The South Dallas Fair Park PID extends from the doorstep of the Matthews Southwest properties in the Cedars east along Martin Luther King Jr. Boulevard to the doorstep of Fair Park in South Dallas.

I wanted to know why Matthews Southwest was taking such an interest in South Dallas. I was not invited to the meeting. I heard about it. When I got there I was told that it was not a public meeting. I stayed anyway. While I sat there, the subject matter was confined to picking up litter.

I attempted afterward to reach Jack Matthews, CEO of Matthews Southwest, or anybody else at Matthews who would talk to me, to ask why they have their fingers in South Dallas. In a week, no one has replied, and, sorry, this may be unfair, but after covering this sort of thing in Dallas for more than 40 years, I always take silence in a case like this as ominous. When they have a good story to tell, they tend to tell it.

Over this previous weekend, I learned that Democratic Congresswoman Eddie Bernice Johnson, who for 27 years has represented the 30th District in southern Dallas, DeSoto and Lancaster, has convened what she is calling a roundtable of officials and stakeholders to discuss federally designated “opportunity zones” in Dallas.

The meeting is Thursday in the offices of the Greater Dallas Chamber of Commerce. In addition to the PID connecting Matthews Southwest with South Dallas, one of these potentially lucrative federal opportunity zones also connects the two places like a red carpet.

I got my bootlegged copy of the roundtable invitation indirectly from a group of small business owners who told me they were upset about what they called “a closed door discussion on opportunity zones when it should have been a town hall.” I wrote immediately to Johnson’s staff and to the Greater Dallas Chamber to find out if I would be welcomed with open arms or just arms.

The Chamber told me this was the Congressperson's meeting and they will defer to her on whether it will be open to the public.  I told Johnson’s staff that I intend to attend. As of Wednesday morning I have not heard back from them. I will give you a ticktock on how long it takes me to get kicked out, always the high point of the week for me.

The federal opportunity zones were created by a little-noticed provision of the 2017 Republican tax-cut legislation. By dishing huge capital gains tax breaks to investors, opportunity zones are intended to draw investment into poor, previously red-lined areas.

At the end of last week, The New York Times published a national report on how the zones are working out. Under a headline “How a Trump Tax Break to Help Poor Communities Became a Windfall for the Rich,” the Times story tells how opportunity zone or OZ projects often have little to do with helping poor areas and more to do with enriching already rich developers.

OZ tax breaks are helping former Trump buddy turned critic, Anthony Scaramucci, develop a fancy hotel in the already booming warehouse district of New Orleans; in Houston and Portland, Oregon, developers are collecting fat OZ tax breaks on luxury hotels. The story mentions the family of Trump son-in-law Jared Kushner as eyeing OZs in Dallas. It says billionaire basketball team owner Mark Cuban already owns a property in a Dallas OZ.

The Trump-Republican legislation creating the OZs requires almost no reporting on who is making what investment in an OZ and offers local communities no control over what is done, where or by whom. Last March, a briefing on OZs by city staff to the City Council painted a cautionary picture:

“Unlike other federal programs,” the briefing said, “local governments do not have control of or approval rights over Opportunity Fund investments. There are no reporting requirements in the federal regulations, so there is no way to track Opportunity Fund investments in our community. Therefore, the city may have no awareness of or influence on an Opportunity Fund project. ...”

So what could go wrong? A lot. First, look at who the players are. The point of the Times piece was that, perhaps unsurprisingly, the kind of people who need big breaks on capital gains are not often do-gooders. That becomes especially pertinent when an OZ has been drawn to include a safe end and a dicey end — exactly what The Cedars-Fair Park OZ is.

Guess where the money goes? Given the option, OZ investors will collect their tax breaks at the safe end of an OZ, where things are already hopping and payback guaranteed, and leave the dicey end to better angels or maybe no angels.

The Cedars-Fair Park OZ has Cuban and Matthews Southwest at its western end and South Dallas at the eastern end. And here is how that works. In order to qualify as an OZ, the designated area must meet certain measurements of poverty and historically low investment. But those numbers are an average for the entire district.

click to enlarge South Dallas, on the eastern end of the so-called opportunity zone, is separated by almost an entire census tract from the lucrative western end. - DALLASCITYHALL.COM
South Dallas, on the eastern end of the so-called opportunity zone, is separated by almost an entire census tract from the lucrative western end.
If the income and investment levels are too high at the end that’s already happening, those numbers will get shaved down a lot when the dicey end is figured into the average. That can even be viewed as a clear incentive not to put money in at the dicey end.

"How a Trump Tax Break to Help Poor Communities Became a Windfall for the Rich." — New York Times headline

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OZs have to be reauthorized by Congress at regular intervals. If too much action occurs at the dicey end and that area actually becomes less poor and more active, then the averages may no longer work for the whole district. The whole OZ could lose its lucrative designation.

The incentive, then, is to pile everything into the safe end and starve the other end. And that’s exactly what the Times story found going on in some places.

Even if the Cedars-South Dallas OZ works out that way and the South Dallas end gets cut out of the good stuff, the presence of the OZ and the activity at the rich end could accelerate the escalation of values and property taxes at the South Dallas end. Those values started out so low — $12,000 for a lot with a house on it just two and three years ago — that even a 200 % jump doesn’t put enough money into the pocket of a seller to pay for anything anywhere else. But the higher property taxes that come with higher values might be enough to put poor owners and renters on the street.

I was told by the staffs of Mayor Eric Johnson and City Council member Adam Bazaldua, who represents South Dallas, that both men knew of the OZ meeting but will be traveling and unable to attend. Maybe once they know they’re missing a chance to see me get kicked out, they will at least send somebody with a phone camera.

This whole picture argues that the people of South Dallas, all of them, need to know exactly what is coming and what role their elected representatives intend to play. Instead, we see already unfolding the time-honored Dallas tradition of high-end closed-door meetings and secrecy. That can mean only one thing, the same thing it has always meant before.

From State Thomas to Little Mexico, from Short North Dallas to West Dallas, we see it uncoiling like a snake slithering across the pages of our history. Poor neighborhoods simply disappear in a puff of construction dust. No one ever asks what happens to the people. But that’s because something always happens to the people.
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Jim Schutze has been the city columnist for the Dallas Observer since 1998. He has been a recipient of the Association of Alternative Newsweeklies’ national award for best commentary and Lincoln University’s national Unity Award for writing on civil rights and racial issues. In 2011 he was admitted to the Texas Institute of Letters.
Contact: Jim Schutze