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.
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:
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
Compare their greed to what Tom Taylor of Datum Engineering is doing with his
Downtown project, Stone Street Gardens:
Street Gardens nearing completion;
Just a year after downtown's Stone Street Gardens retail project was
announced, tenants are making it
30,000-square-foot project that connects Main and Elm streets is the
biggest new retail development in the neighborhood in more than two
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 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
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:
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?
project vote is still up in the air;
1 more council member's backing needed to secure $43 million from city
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
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
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.
"yes" vote will also brand that council member as totaling lacking