Early voting starts Monday morning, and at the end of a lengthy midterm ballot Dallas voters will find Proposition A, which will use hotel tax to rebuild the convention center and rehab some buildings at Fair Park.
We have everything you need to know, or you can just summon Ron Kirk to explain it you by mentioning Prop A at any local white tablecloth restaurant in the greater Dallas area.
What is it?
Prop A will fund a new Kay Bailey Hutchison Convention Center complex and extensive renovations to several historic buildings at Fair Park by raising the hotel occupancy tax by two percent. That will generate about $1.5 billion over 30 years, which would repay the bonds that would fund the projects. The bulk of the money will go to the convention center, with $300 million going to renovate and repair the Cotton Bowl, the Coliseum, the Band Shell, the Centennial Building, the Automobile building, and the Music Hall.
The proposed convention center will be reoriented to improve walkability and access and will connect the complex to the Cedars neighborhood. It will also, supporters say, encourage development around the center and improve Dallas’ odds of landing larger and more lucrative conventions as it competes with other cities for that business.
Why do we need to do that?
All of those Fair Park buildings have historical value and are often touted as exemplars of Art Deco architecture. By using hotel tax money to improve them, it will also give Fair Park First, the nonprofit tasked with maintaining the 277-acre park, some relief when it comes to fundraising. That impacts plans for an 18-acre park that will reclaim parking lot space that was taken from Black neighborhoods through eminent domain years ago.
The current convention center needs about half a billion dollars in maintenance needs, according to the city. City staff said that the city spends about $1 million every year to address the leaky roof on the building and that Dallas misses out on booking opportunities because it can only host one convention at a time.
“Free money”
Proponents of the proposition point to the fact that the HOT is a tax paid primarily by visitors to the city, which means that residents won’t be footing the bill for the two projects.
“If approved, this $1.5 billion initiative will require no increase whatsoever in sales taxes or property taxes,” Mayor Eric Johnson said at an event to kick off the campaign for Prop A. “It will be funded entirely by visitors through a 2 percent increase in the Hotel Occupancy Tax.”
The city’s HOT would increase from 13 percent to 15 percent, and supporters say it is small enough to keep the city’s hotel business competitive with the region.
But there are caveats.
Ultimately, bonds are paying for the projects. The money collected with the HOT increase would go toward paying off those bonds, which is basically how the city borrows money for big projects. The projections on how much revenue the city will actually collect can often be rosier than reality, and opponents say that if the hotel industry took a hit (like it did during the pandemic), that would impact the city’s ability to repay those bonds. If less is collected, even though the campaign promise is that taxpayers won’t be on the hook, they could be on the hook when it comes to their property taxes, where the interest and sinking rate that services city debt could increase to accommodate repaying the bonds. But supporters point out that it’s unlikely to happen because bond covenants typically require some kind of coverage that guarantees there is more revenue coming in than the bond is for (and the convention center has its own $66 million in reserves).
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