Integrity

05/16/02 Is it a detriment at City Hall?

This Palladium thing gets more weird each day, but it basically boils down to if you are broke -- and Dallas is absolutely broke right now -- you don't give away millions to Billionaires or spend millions on an entertainment center that will be mostly utilized by millionaires and their friends and kin.

Of the Dallas citizens who bothered to vote, 67% voted against the pay referendum that would have raised the salaries of our cops and firefighters to a competitive level in the metroplex. City Hall claims it would have cost $63 million to give them their 17% raise. Guess what number you get if you add $23 million (performance hall) and $43 million (Palladium tax abatement)? You get $3 million more than it would take to raise our cops and firefighters to a competitive salary level.

All of that aside, this is a very bad deal!

At no level does this Palladium deal work for Dallas taxpayers. We were assured the arena would generate development -- even though Reunion did not stimulate development and neither has there been development around Texas Stadium. The reality is that had the area been left alone, it was already being redeveloped. The JPI apartments at Field on the South end of the project was built way before Ross, Jr. set his sites on that location for his arena/real estate deal. Intervest had a great project planned that would have preserved the two silos for lofts. Had there been no arena, no car rental sales tax or hotel/motel tax, the area would have been developed.

Not only did the arena not stimulate development, our misspent investment in it is more of the leverage being used to justify this latest Perot/Hicks extortion plot. It is particularly painful that Dr. Elba Garcia has bought into the scam. She knows better!

There are many interesting stories available from different perspectives, but let's start with one from D Magazine's May issue:

Virginia Postrel -- Why the Fixation on Downtown is Wrong

The idea that Dallas needs a great downtown to be a great city is total nonsense. A vibrant downtown would be nice, but only as one among many great neighborhoods.

. . . Dallas movers and shakers are always trying to fix downtown. All right-thinking Dallasites must affirm that downtown is as central to the city?s fate as it is to its geography, that in some real and important way downtown is Dallas. No one can suggest in polite company that the city?s strength, vitality, or urban image might lie somewhere outside the bounds of the freeways that ring those skyscrapers and civic monuments. It?s an unchallenged assumption that with the right plan and enough subsidies from the rest of Dallas, downtown will reassume its rightful place as the center of metropolitan life.

Her basic premise is that Downtown is just one neighborhood of many that make up the city. She compares Dallas to other "great" cities like San Francisco, Los Angeles. She says Downtown SF is dark at night, too -- that it is just a bunch of office buildings surrounded by great neighborhoods.

We have spent a ton of money on Downtown. Some of the money went to the very things that have been so devastating for the CBD -- sky bridges and tunnels. We have allowed street bums to terrorize office workers and conventioneers. We have allowed do-gooders to concentrate feeding stations Downtown to service the street bums, but we don't have adequate emergency housing for women with children. We spent millions on a beautiful library, but have let it become the bathroom and hang out for street bums. We have let a handful of rich bums -- robber barons -- skim all the goodies off the top Downtown -- like Ray Hunt with his Hyatt Hotel and Tom Hicks and Ross, Jr. with Victory.

Compare their greed to what Tom Taylor of Datum Engineering is doing with his Downtown project, Stone Street Gardens:

Stone Street Gardens nearing completion; Just a year after downtown's Stone Street Gardens retail project was announced, tenants are making it

05/15/2002 by STEVE BROWN / The Dallas Morning News

. . . The 30,000-square-foot project that connects Main and Elm streets is the biggest new retail development in the neighborhood in more than two decades.

Even more significant, just a year after it was announced, retail space in the complex of restored buildings is fully rented, says Jill Tiernan, the Weitzman Group agent who leased the project.

"The great news is this was done without any national tenants," Ms. Tiernan said. "It's all leased to local people, which I think says a lot about the development."

. . . Datum Engineers Inc., an engineering firm that developed Stone Street Gardens, is finishing up renovation of the historic F.W. Woolworth Co. building at Elm and Stone Place and the adjoining 1525 Main building. The project also includes elaborate landscaping and improvements to the pedestrian mall.

Datum Engineers received more than $600,000 from the Main Street tax-increment financing to make the improvements.

Datum needed less than $600,000 from the Main Street TIF to create this new retail in Downtown, and it's all local people. That's a good deal!

Now, you need to stop and go right to Jim Schutze's story in The Dallas Observer on the secrecy behind this Palladium deal and Mayor PreTend Poss being Perot's champion in this mess:

The Scarlet Letter

The Dallas City Council is about to mark itself for life with its vote on the Palladium deal

BY JIM SCHUTZE

. . . The basic bloc pushing for the Palladium deal on the council is made up of Mary Poss, who should not be voting on or even talking about this because of her family's close business ties over the years to the Perots but who does it anyway, and you have minority council members, especially African-American members, who have been promised substantial deals for contractors and for affordable housing initiatives, both of which are legitimate political goals.

There is real reason to be concerned about why Palladium is hiding its numbers. Obviously, their numbers don't work and they have something to hide. Schutze writes:

Terry Margerum, senior managing director of Sedway, said he thinks it's possible Palladium won't turn over its numbers because there may be something wrong with them. "One reason I think Palladium has not been willing to share the numbers is the numbers are ludicrous," he said on the phone at the end of last week.

He gave me an example: Palladium says it will spend $160 million developing half a million square feet of retail space, not including parking. That comes to a cost of $320 per square foot without parking.

"Ken Hughes built Mockingbird Station with parking for less than half that," Margerum said.

I checked with Hughes. He said Margerum was right. Less than half. Mockingbird Station is close-in, high-end, very successful and cool.

Margerum said the numbers Palladium is pushing are crazy. "Three hundred and twenty dollars is a laughable number. You might see that in downtown Manhattan or downtown San Francisco."

Hughes is a former backer of MPT Poss, but they sure don't see eye-to-eye on this Palladium deal.

This Sedway report is really pretty damning for any council member who votes for Palladium. Yet, there is no mention of the report or even the Sedway Group at all in Dave Michaels' DMN story. Do you think some editorial scissors got hold of the story after Michaels turned it in?

Victory project vote is still up in the air; 1 more council member's backing needed to secure $43 million from city

05/16/2002 by DAVE MICHAELS / The Dallas Morning News

With one week to go, the Palladium Co. is one vote shy of the eight needed to secure the $43 million reimbursement it is seeking on the Victory project.

. . . Two of the three undecideds appear to be leaning against the proposal.

Council member Sandy Greyson . . . Council member Mark Housewright . . . Ed Oakley, said he would not discuss his vote "until I push my button next Wednesday."

Michaels effectively catches the politics of this deal and did mention the concern about the conflict of interest issue for MPT Poss.   Poss is completely oblivious to how wrong it is for her to be even part of these discussions -- because she is completely lacking in even one iota of integrity. She talks as if she has some understanding of financial issues and thinks her one-year stint as a junior officer at some bank makes her a banker. No banker would ever loan out $43 Million to a debtor without a thorough review of the project pro forma with a couple of second opinions.

Michaels has an interesting quote from Alan Walne. He's going to oppose the tax abatement because they are setting aside part of the TIF funds for affordable housing to be built in Don Hill and Beat that Indictment Fantroy's districts. That's a valid reason to oppose the $43 million tax abatement, but Walne should be voting against it because he doesn't have enough information to be making an intelligent decision. There is no way he would lend out $43,000 of Herb's Paint & Body funds based on a contract that he was not allowed to read in advance.

So, this new Bad Deal comes down to a decision by Sandy Greyson or Mark Housewright or Ed Oakley.   Here's hoping all 3 vote NO, particularly Ed Oakley..

A "yes" vote will be a complete shot in the dark, and will brand any council member voting "yes" as bought or stupid or both.

A "yes" vote will also brand that council member as totaling lacking in Integrity