Demanding Answers as the Dallas Convention Center Hotel Moves Forward

The day after the meeting, Harlan Crow sent Kirk a letter saying he opposed any deal that would use public money to subsidize the project. In an attempt at damage control, DHP hired political consultant Carol Reed, who also had helped Kirk in his campaign. Almost three months later on November 25, 1995, The Dallas Morning News published an editorial, which said a new convention center hotel would benefit the city. The council ultimately balked at giving DHP the $40 million in subsidies, and the deal disintegrated.

On March 12, 2003, Miller took seven council members to Austin to lobby for the legislation, but the bill seemed all but doomed. Then in the waning hours of the session, Wolens tacked it on as an amendment to another bill, which was enacted into law.

Armed with the legislation, the city offered to lease property next to the A. Maceo Smith Federal Building on Griffin Street, and proposed including a $20 million moving walkway from the Hyatt Regency hotel and Reunion Arena to the new hotel. The Hyatt and the air rights over Reunion Parking Center are owned by local billionaire Ray Hunt, who also owns Woodbine Development Corp.—one of three developers who bid on the exclusive negotiating rights to develop a hotel. After the city council endorsed the plan, The Dallas Morning News followed suit, publishing an October 20, 2004, editorial saying a convention center hotel was a good investment in Dallas' future.

Miller says that she and Wolens rejoiced at their legislative coup, thinking that the tax revenue would be enough to cover the city's portion of a privately owned hotel deal. But when the three developers offered their proposals, they found that wasn't the case. "We had sticker shock," she says. Developers were estimating that the project would cost taxpayers between $50 and $100 million, "which was way too expensive for us at the time," she says. Although the city selected Woodbine in December 2004 to build the hotel, the developer's exclusive rights expired without consummating the deal.

Miller would still like to see a convention center hotel built but wants any public subsidy limited to $50 million in addition to the estimated $50.6 million in tax breaks that Wolens' legislation would still generate for a hotel developer. "If the new administration can figure out how to subsidize a convention center hotel that is privately owned for less than $50 million in tax monies, then I think it's terrific, and my hat is off to them."

After his election in June 2007, it became Mayor Leppert's turn to pick up the hotel torch. In his June 25 inauguration speech, Leppert mentioned building a convention center hotel as a "key to our economic and competitive success tomorrow." The day after the city council returned from its July recess, members were presented with a convention center hotel status briefing. In this briefing, city staff told the council that one of the key site selection criteria (similar to a factor that was part of the city's lease proposal under Miller) was that the hotel be located in a place where the convention center could be linked to the Hyatt Regency and the Reunion Parking Center owned by Woodbine—one of the six developers to submit a proposal to build the hotel.

Before the February 13 city council meeting, a last-minute item was added to the council's agenda: a vote on whether the council should approve using $500,000 from the Dallas Convention Center & Visitors Bureau to pay for an option to purchase the Chavez property as a possible site for the hotel. The city commissioned two independent appraisers, who had each valued the property at $40.1 million or $110 per square foot. The economic development committee selected the site in a closed session despite there being no public briefings to the council. The council, however, voted to approve the option, with only council members Hunt and Rasansky dissenting. Both felt the council had little information upon which to move forward; Rasansky, a real estate developer himself, called the option "extremely flawed" and was amazed that the two appraisals came in for the exact same amount to the dollar. Hunt pointed out that the gap between the Dallas Central Appraisal District's taxable value of approximately $7.3 million and the city appraisals of more than $40 million was "remarkable." Assistant city manager A.C. Gonzalez says after he showed the two appraisals to DCAD, its staff admitted the property was undervalued.