Demanding Answers as the Dallas Convention Center Hotel Moves Forward

A month earlier, the city council by a 10-2 vote approved spending $500,000 on an option to acquire 8.375 acres of land in front of the convention center for $42 million, which would presumably be the site for the hotel. The city's chief financial officer Dave Cook explained that the property, owned by Cincinnati-based Chavez Properties Ltd., could also be used for more convention center parking or meeting room space. The city, however, commissioned two appraisals for the property (View one appraisal in its entirety). Both valued the land—over the doubts of council members Mitchell Rasansky and Angela Hunt—at $40.1 million. And on March 7, the city issued a Request for Proposals from real estate developers to submit "a full detailed proposal for a hotel development on the Chavez parcel." Proposals for alternative sites would be considered, the RFP stated, but only if a proposal was submitted for the "Chavez parcel." Because the proposals are confidential, it is unknown whether the six developers, who are each bidding on the project, will insist that the city give them the land as part of their development deal, or require other public subsidies to build and operate the hotel.

Despite unanswered questions on such hot-button issues as taxpayer involvement, questionable appraised values, voter approval and the economic viability of the project, the mayor seems hell-bent on pushing a convention center hotel through the council. And a council vote is scheduled on April 23 to approve financing for the purchase of the Chavez parcel, which for all practical purposes will seal the deal.

The mayor's enthusiasm for the hotel is shared by one of his most ardent supporters, the Belo Corp. One of its holdings, The Dallas Morning News, has for many years thrown its editorial endorsement behind a convention center hotel. And yet the local media conglomerate's large real estate holdings around the convention center give it a vested interest in seeing this project become reality.

But there are other political forces in play. Council members Mitchell Rasansky and Angela Hunt, who represent adjacent districts, voted against optioning the Chavez land. Both spoke out against the deal, at least until they were given more information about how much the hotel would cost, how much public subsidy would be required and how similar hotels in other cities have influenced convention business and economic development. But as of April 7, Rasansky is done speaking out. The city attorney claims Rasansky has a conflict of interest in the project because of some of his stock holdings, and he has been banned from voting on the issue or speaking about it publicly.

This leaves Hunt as the only vocal critic on the council. "[Rasansky's] removal from this debate is very crippling for me," she says. "We can no longer bounce ideas off each other, and I can't analyze the data in the way he does because of his experience in real estate."

Veteran real estate developer Harlan Crow also opposes the hotel as proposed. He too is concerned about the use of public money and the haste with which the mayor seems to be railroading this project past the council. Crow is not without his own self-interest. His company, Crow Holdings, owns the Hilton Anatole Hotel, which would be in direct competition with a convention center hotel.

Despite his head-cheerleader role, Leppert would not answer questions from the Dallas Observer about the project. His chief of staff Chris Heinbaugh said, "As I mentioned before, [Leppert] is not ready to discuss it until things have firmed up and we know which direction the city is heading."

But for those who oppose the project or wish to slow it down, that's not hard to figure out. There is only one direction the mayor is taking the city: full-speed ahead.

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This isn't the first time that the city has grappled with the issue of a convention center hotel. Discussions for adding a hotel were fanned by additions to the Dallas Convention Center. Originally named the Dallas Memorial Auditorium, it was built in 1957 with 70,000 square feet of exhibition space until it was expanded four times to its present size of around 1 million square feet, making it only one of nine U.S. convention centers of comparable size. But the idea of a hotel didn't gain much traction until early 1995 when former Mayor Steve Bartlett encouraged a proposal for a hotel using tax abatements.

Months later, when former Mayor Ron Kirk took office in May 1995, he put some of his newly acquired political capital behind a hotel. DHP Ltd. Partnership of Utah came to the table and met with the council's Business and Commerce Committee. It proposed converting the former Employers Insurance Building on Young Street, now an office building, into a 1,000-room convention center hotel at an estimated cost of $100 million. DHP's request included $40 million in tax abatements and other financial subsidies.