Friday, April 6, 2012

CCR 04-06-12: Can You Hear Us Now?

the Controversial Committee Report

“We don’t raise sacred cows...we just butcher them.”

Full steam ahead! Damn the torpedos! Staff of the CCR can hear Forest Gump shouting from the steps of the Irving city hall: “Stupid is what stupid does!”

It appears that the city council’s Doddering ½Dozen (D½D)* has again taken the bait. The Las Colinas Group’s (LCG) hired mouthpiece dangled the enticing “go for the bond rating, you’ve got the votes” lure and sure enough, the D½D is moving towards stepping off the dock for what might amount to the largest financial blunder the city has ever witnessed. This exercise in fiscal mismanagement by the D½D makes the recent $34 million McDougal payoff-fiasco-bungle look like chump change.

Once again, the D½D has bowed to the whims of the LCG. The developer stands to gain and has very little to lose at this point while utilizing the city’s ATM card. Additionally, the LCG has yet to provide the required contractual documentation reflecting that they have the entire $80 million on hand for their portion of the $250 million Entertainment Center. The D½D must consider this a minor inconvenience. After all, do you think the D½D’s plan could be to wrap up this deal and snag tax payers on the hook before there might be any changes on the council as a result of the upcoming election?

Going forward with the $170 million bond rating indicates that the D½D still isn’t listening to their hired bond and financial consultants. How many times does the city’s bond and financial consultants -- plus Standard & Poor’s -- have to state that in order to achieve ‘investment grade’ bonds on $170 million the property tax payers must be on the hook? Also, the HOT taxes must be double pledged to cover any revenue shortfalls. And the probability of the city losing their AAA bond rating by financing a $170 million bond package is still on the table by going forward...even on investment grade bonds.

The weak, tepid and highly spun recent comments by Cannaday and Santoscoy do little to instill confidence that the D½D is merely exploring or ‘testing’ the bond market. As apparent spokespersons for the D½D, it appears their script has been written and approved by LCG and ex-mayor Gears. Either the D½D suffers from ADD or they need to visit one of the hearing centers around town and be fitted with hearing aid devices.

One question the D½D should respond to in a Yes/No fashion is: Will you proceed with this project if HOT taxes are double pledged, or tax payers are placed on the hook, or the city’s AAA bond rating is jeopardized resulting from potential revenue shortfalls of the Entertainment Center? Yes or No? Readers should let staff of the CCR know if they ever hear a response to this question by any member of the D½D.

What makes this potential financial-catastrophe saga sadder is tax payers were always assured at the outset of this debacle that they would not be placed in a position to absorb any of the cost, debt service or revenue shortfalls of the Entertainment Center venture. (Another prime example of political hacks saying one thing and doing the complete opposite once elected.)

If all of this wasn’t bad enough, what will the D½D do about the current agreement with the LCG? Since it appears that Billy Bob may be squeezed out of this arraignment with new ‘investors’ taking his place, will the current agreement with the LCG stand as is? Will there be any contractual changes before bonds are considered for sale? Why is this important?

Consider the following items in the current agreement with the LCG that the D½D should address. Without changes to these items, the developer will continue to be the driver of the Entertainment Center gravy train at tax payer’s expense. And here’s why:

  • Developer has a 100-year lease on the proposed facility.
  • Developer only remits $1 million/year in revenues to the city for the first 50-years.
  • Developer does not have to comply with the city’s 60/40 alcohol zoning ordinance.
  • Developer would be allowed to build condos on the property that would be exempt from ad valorem taxes.
  • Veracity of the developer’s revenue projections for Entertainment Center operations.
  • Developer has no liability for the city’s bonded debt on the project.

However, tax payers should take heart. The D½D has a gift for you. When you receive your property tax statements next year reflecting significant increases due to the Entertainment Center and McDougal fiasco, you will also be given a box of Forest Gump chocolates that have been allowed to sit on the hot August pavement for a week. Remember, “Life is like a box of chocolates. You never know what you’re going to get.”

Your free box of melted chocolates from the D½D will allow you to feel all warm and runny inside knowing that LCG and McDougal have fresh boxes of Godiva chocolate to munch on at your expense.

  • The D½D includes the following council members. Give them a buzz or send an e-mail. Remember, your chances of receiving a response are enhanced if a generous donation is made to their campaign coffers. They can hear money talking. It’s citizen voices they have difficulty with. 972-790-6478 Lewis Patrick Place 4 2012 972-871-0019 Rose Cannaday Place 5 2014 972-586-1490 Michael GallawayPlace 1 2013 214-876-7172 Rick Stopher Place 6 2012 214-929-6700 Roy Santoscoy Place 2 2013 214-490-9749 Dennis Webb Place 3 2014