My sometime employer, longtime hero, and the guy I’d most love to see riding a Segway in the office, Wick Allison, sweeps the leg of the People’s Hotel, and offers a merciless explanation of why, even though we may need a convention hotel, the way the city wants to structure this deal is bad mojo and bad business.
To be blunt, the city is often not very good with numbers. For this fiscal year, it is projecting a $100 million operating deficit. For the hotel site, it paid $42 million to buy land appraised at $7 million (I’m still trying to figure that one out). Its projections for the hotel are so rose-colored that the pro-hotel campaign has not used them. The reason it hasn’t used them is that they don’t make sense.
But that hasn’t stopped the pro-hotel campaign from coming up with numbers of its own. For example, it trumpets the fact that the hotel will create 800 permanent jobs. At a $500 million investment (excluding the $50 million reserve fund), that’s a cost of $625,000 to create each job. If there is a case for such startling extravagance, this is a strange economic time to make it.
The pro-hotel campaign also tells us the hotel will not be paid for by our tax dollars. That is only true if we believe the city’s sunny-day scenario. But after the economic thunderstorms of the last eight months, is there anyone who would forecast that all future days will be sunny? A $50 million reserve fund may sound reasonable, until one remembers that the American Airlines Center was budgeted at $230 million but ended up at $420 million. So when the $50 million reserve runs dry, either from cost overruns or operating losses, where will the bondholders look for their money? To the taxpayers.
Money shot at the end — the bottom line is the bottom line:
It is the wrong deal at the wrong economic time based on the wrong numbers. Pardon me if, like our neighbors in Fort Worth, I don’t salute. I hope you won’t, either. Thank heaven Harlan Crow did not salute, or the bulldozers would already be digging the hole. Vote “Yes” on Proposition 1 – for good governance, fiscal prudence, and a healthy future for Dallas.
Here’s what I came away with after skimming the two articles: Wick talked about the hotel. Leppert talked about the people who were against the hotel. Point goes to Wick.
Wick’s initial sticking point is THE ONE I can’t get past. “We” paid 42M for a property on the books for 7M. Hey, I can understand 10% either way, BUT…
From the first start, this deal STINKS. It looks, acts, and quacks like a loser.
You mean quacking makes me look like a loser? I mean, that’s why I don’t do it, I mean. Quack. Which I don’t do.
But haw haw! Losers do!
[NOTE — This is from John Jay Myers at johnjaymyers.com. It got caught in the spam filter and deleted. I’m putting it back up now. -TG]
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ahh, it’s nice to hear reason. But if that doesn’t work… here is my take from the Dallas News Blog in regards to Rip’s new video:
These videos are so frustrating because they show people who are just sadly missing the point.
“We want! we want! we want!†they sound like spoiled children. Go out and do, and stop trying to force me to buy you a hotel.
Most of the people for the hotel (the ones who are fronting the money) lean Republican.
Hence the hokey weird ads that appear to be touting the fact that they are cool and urban.
Most of the people walking into the polls who were pro hotel, worked in the convention industry. So you are telling me the rest of us have to pay the tab so you might make a little more?
The convention industry is like the Arms Race, everyone running to make the next biggest weapon to gain market share in an ever dwindling market.
But now we have way more ammo then we could ever use. But for some reason were thinking of throwing even more money into the fire.
It is not like investing in a cellular phone, it’s like investing in a 8-track player, and trying to get it to sound a little better.
Enough of this socialist movement. America was not built on this. Somehow we have gotten to the point where we believe if government doesn’t do it, it wont happen.
If people keep believing that, this country is a goner.
Please purchase:
“Economics in one Lesson†by Henry Hazlitt.
Learn about the effects of intervention by government, understand that in order to give to one group you have to take by force from someone else. It actually might be Ft. Worth we are taking from in this instance, it might be other hotels, it might be other little areas of town, trying to make themselves the new hip spot, and it is definitely the tax payer.
But let their be no doubt, Government intervention will adversely effect someone, and who by chance are you to decide their fate, with our dollars?
The free market works. Try it.