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The City’s VisitDallas Alternatives Aren’t Great

Let's explore the city's options if Council decides not to renew VisitDallas' contract next year.

VisitDallas got slapped around earlier this month when it went before the City Council.

“I think they grasp the changes that need to be made, but I don’t think it was communicated as effectively at that last meeting…” says Preston Hollow Council member Jennifer Staubach Gates, before jumping into a different thought.

Council can be as stern with VisitDallas as it wants, but if there’s no reasonable alternative to take over the operations of a convention and visitors bureau, Council will renew the contract with the troubled organization next year. And that’s regardless of how thing go over the next six months.

Quickly, to bring everyone up to speed: a city audit found that VisitDallas was misusing the public dollars it brought in from a hotel occupancy tax and the revenue share from a public improvement district, or PID. It had nothing in place to prove it was getting a return on those dollars and had a CEO who was buying $300 backpacks and piggybacking triathlons onto his business trips. The City Council demanded changes. That CEO, Philip Jones, resigned, and interim CEO Sam Coates was brought in to bring those about. The meeting two weeks ago was the first time Council got a good look at those changes. It did not go well.

VisitDallas’ contract expires in September 2020.

West Dallas Council member Omar Narvaez likened the next year or so to a stressed relationship between an employer and employee. Dallas has put its worker on notice. “I think it’s time you realized who your boss is,” Narvaez said.

If the city doesn’t renew, it has two options. Put the contract out to bid or create a local government corporation to run it. Neither seem solid.

A problem with the first, says Assistant City Manager Joey Zapata, is it is not tried or tested. A city in California awarded a contract through an RFP earlier this year only after its top candidate was booted out of the running when a reporter found text messages showing a conflict of interest. Zapata says that’s the only example the city found when researching alternatives.

Requesting bids would place it in the footsteps of Fair Park, which was taken over by private operator Spectra in February. Spectra also took control of the Kay Bailey Hutchison Convention Center in February. You could make an argument that those two projects would give it a leg up should a call for proposals go out. (I have reached out to Spectra for comment.)

Now, let’s look at the second option. Houston runs its visitor’s bureau through a local government corporation, which is the private-public entity under which the organization functions.

One difference: the LGC already existed. Houston’s LGC, Houston First, had been in place since 2011, overseeing its convention center and several city-owned arts and entertainment venues. City leadership wanted to give control of all hotel tax dollars to a single entity.

When VisitHouston came under the umbrella in 2014, Houston First CEO Brenda Bazan says it meant very little for the people at VisitHouston. Leadership stayed the same. Employees stayed the same. “We did an agreement whereby we first assumed all of the destination marketing organization responsibilities and the personnel all came to Houston First, and the contract with the bureau went away,” she says.

That will not work so smoothly in Dallas. Although the city has floated the idea of an LGC, big questions remain about what it would look like. Would the LGC encompass only the visitor’s bureau? Would it include arts venues or organizations? Could it include the Spectra-run Convention Center?

Among the groups watching these developments with keen interest is the arts community. Cities Dallas’ size can earmark up to 15 percent of their HOT funding toward the arts. Dallas gives 2.6 percent. Meanwhile, through a wonky state law that includes a loophole specifically for the city, Houston is the only municipality in the state whose population allows it to send up to 19 percent to the arts. It does. That makes our art folks jealous.

Momentum has been building for Dallas to correct the imbalance. The Cultural Plan called for an increase in HOT funds, and arts advocates have asked for between 13 and 15 percent. VisitDallas’ amended contract will divert another .9 percent, bringing the total to 3.5 percent. More hotel tax will mean more money not only to fund arts programs but to maintain and repair arts buildings and other cultural and historic assets. We’re talking about a big basket encompassing everything from the Perot Museum to the Juanita Craft House to the Arboretum to the new Holocaust Museum.

“We want our assets, our historic arts venues, to be in as good of shape as they can be,” says Chris Heinbaugh, who works as an advocate with a coalition of arts leaders. He calls the small bump in funding in the amended contract and VisitDallas’ decision to include an arts representative on its new, 21-member board, “a good start.”

“We’re encouraged by that,” he says.

In Houston, Bazan says the structure is working. The visitor’s bureau previously sold the convention center to clients without the ability to book or view availability, which threw a wrench into discussions. “Now that we’re all together, it’s like one-stop shopping,” says Bazan. “We’ve all got access to the same information. It’s more effective. Everyone is working together.” There have been some efficiencies in running it all under the same roof as well, such as in accounting, HR, and payroll.

Gates, who sits on VisitDallas’ board, doesn’t want to see the organization fail. Neither does Heinbaugh. Neither does Zapata. The easiest way out of the mess is a new, fixed and functional VisitDallas. The other two options are messy and untested. If Council decides they don’t have one by May—or at absolute latest, Zapata says, before Council goes on vacation in July—there will be many questions left to ask about how to proceed.

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