Some eight months after his election, businessman Tom Leppert, 52, has earned generally good marks for his performance as mayor of the city of Dallas. A one-time CEO of Turner Corp.—a $7 billion, Dallas-based construction company—Leppert brought to the mayor’s office a diverse background not only in building but in banking, real estate, and management consulting. The combination taught him to be a quick study in different fields, he says—and to adapt easily to changing circumstances, both culturally and operationally. We wanted to learn more about how business prepared him for his new role—and what he sees for the city’s future—when we sat down with the mayor recently in his office on Marilla Street at Dallas City Hall.
D CEO: After having been mayor for awhile now, do you have any fresh insights about the best ways to get things done?
Mayor Tom Leppert: There really haven’t been any surprises. I have had the chance in many different positions to work with and to observe the challenges of the public sector. Some issues have arisen which might not have been anticipated, but you just deal with them—as in the case of the Trinity referendum. Then you move on.
What in your background as a businessman has been most helpful as a mayor?
The successes I have had in business have largely been strategic—thinking about what direction to go and where the opportunities are. I also enjoy working with people and leading people. I believe I have been effective at bringing people together. The two work together: bring people together around a direction, and build con-fidence and trust, if that’s the appropriate way to go. Then, unleash them and let them go.
How is serving as the CEO of a big city similar to running a big corporation?
A similarity is that you are still working with people. In both cases, your position has influence attached to it—how you treat people, craft arguments, and describe a vision and direction for the organization or the city.
How is it different?
Clearly, a difference is that the type of activities we do [at City Hall] are much more visible. Things arise in the newspaper on a daily basis. There is an openness of government, which I think is very positive.
What about the operational challenges?
I would say there are differences in my position. As a [private-sector] CEO, I had much more direction over the operational components. There is a city manager in our structure of government—Mary Suhm, who is very capable and leads day-to-day operations. I hope to lend value to those efforts.
In some cases, it is a very different position without a parallel. The position is working with the board of directors—i.e., the Dallas City Council—to make sure we’re identifying the priorities and translating the needs of individual citizens into operations. But then, more broadly, it is going out into the community and literally being the leader of the city. This involves crafting goals, articulating a direction, and creating the constituencies or groups that will see some of the goals come to fruition.
So what are your goals and priorities for Dallas?
It is going to be important to continue to bring the city together, not only from a city but a council standpoint. To be successful as a city, all [stakeholder] groups are going to have to feel ownership and be engaged. We are off to a good start.
|1. Whether leading a large corporation or a municipal government, it’s all about working with people.
2. A strong education system is crucial for a vibrant city.
3. In the realm of strategic marketing, even cities have to make cold calls sometimes.
The specific priorities become fairly straightforward.
One, we have to address crime. We have been at the top of the “highest-crime cities” list for too long. We are not a violent-crime city and need to move ourselves off of that [list].
Second, we have to improve our educational system. I’m speaking of this as a community issue, not just from the city of Dallas perspective. If we’re not successful from the education standpoint, then the other things we are doing at City Hall will be for naught.
The third priority is economic development. It is important to provide opportunities for people, to continue to build the tax base, and also to provide a vibrancy and excitement to the city. Inherent in that is a willingness to invest in the city. We made a commitment to continue investing in the Trinity Project, which is exactly the right thing to do. The project will change the face of the city, if we do it properly.
We will see additional decisions—investing in a convention-center hotel, continuing to build downtown, and a willingness to invest to develop economic opportunities in the southern part of our city, which we have not done.
In the end, we have to walk away with a balanced city—one that is competitive, places itself on the international stage, and looks [toward] tomorrow.
Let’s talk about one of your goals specifically. How do you plan to improve education?
We need to make sure that the public schools are accountable. I think we have a superintendent aboard [Dr. Michael Hinojosa] that is committed to change and improving performance, and [he] understands how this impacts the region.
There are some things we can do to aid the public school system—[whether it’s] early reading programs or scholarships programs—and hopefully reduce [high-school] dropout rates.
We can build the coalitions to strengthen our position in higher education. The University of North Texas is a key element in having higher education, especially in the southern part of our city. I would like to see a pharmaceuticals school, most likely attached to the UNT campus there. There’s clearly a demand for that.
Thomas C. Leppert
Chairman of the Board and CEO, The Turner Corp., Dallas
The region also needs to have a tier-one research institution. We are the only large metropolitan area that does not have one, which cannot be the case a decade from now. Schools can be used strategically to address many community needs.
You recently announced that you would donate most of your salary to a new scholarship program for disadvantaged high school students. Was that your idea?
Yes. If these kids can just go to college, it creates opportunities. So I thought, why not do a scholarship program in a different way? Instead of in the senior year, why not make the commitment in the freshman or sophomore year?
In terms of economic development, what do you think attracts companies to Dallas?
First, the people of Dallas. They are engaged, with an optimism that you don’t see in many other places. A central time zone in the middle of the country is clearly an asset. Considering the cost of living and the cost of doing business, Dallas is very attractive. When Turner Corp. was a $4 billion company, I moved it to Dallas for many of these same reasons: It has a great business environment and is a very livable environment. We have more opportunity than any other city—we just need to realize it.
You mentioned the Trinity Corridor Project earlier. What did the November referendum say to you about that project?
The vote said that people were committed to the project. While we needed to communicate where we stood on the different elements of the project, more importantly, we needed to go forward.
What’s next on the schedule for the Trinity?
The many steps range from continuing to work with the federal government on floodway improvements to securing private donations for the amenities of the park that you and I will go to see. This is a project that could change Dallas in terms of floodway infrastructure and address key issues like traffic congestion and air quality.
You recently announced plans to “speed up” the project. Why—and how—will you do it?
We’ll push things just a little. We’ll think about different contracting methods, say, or look at the schedules, try to dual-track things. There are a lot of different pieces.
I don’t think we’ve really com-municated on the project as well as we should have in the past. So, as we go through the process, it’s important to demonstrate to people that things [like environmental impact statements] are happening and that we build momentum. The world changes rapidly, too, so we ought to strike while the iron is hot and create a sense of urgency. It’s a terrific project, so the sooner, the better.
Will you be making any special effort to involve Angela Hunt, the city councilor who led the opposition in the Trinity referendum?
I want to have everybody brought into the process. That goes for everybody on the council and in the community.
Another boost to local development could come from the Dallas Logistics Hub, the new “inland port” in southern Dallas County. Can you explain the concept?
The inland port is a distribution logistics hub, which is especially important for the southern part of our city. The project involves leveraging those assets that we thankfully inherited; Dallas has five interstate highways coming together and two majors rail lines there.
The public sector’s contribution is in the infrastructure [through bond programs], which is not unusual in a project like this. The public investment will enable the private investment to come in.
Our goal is that it not only be a distribution center but also a nucleus surrounded by an economy that adds value to those products. This will result in higher-paying jobs. Our challenge is in developing the value-added operations to complement our efforts there.
What benefits do you expect the port to bring to Dallas in general, and to the southern sector in particular?
First, it creates jobs and adds to the tax base. Beyond that, it gives us a competitive advantage. We have a terrific location in the country—one that is perfect for a logistics and distribution hub, which should place us in a leading position.
A number of cities have established “clusters” in which certain industries are concentrated, like the banking/finance sector in New York. What do you see as Dallas’ primary industry clusters, and what clusters might be good targets for the future?
The great thing about our economy, relative to other economies, is that we have a much more diversified economy, rather than one or two industries driving it. That becomes extremely attractive if a business wants to locate here—especially its operations or headquarters.
We have strong positions in retailing and are renowned worldwide for shopping. Some of our hidden jewels are in the health care area. We have some marvelous medical institutions—Children’s Medical Center, University of Texas Southwestern Medical Center at Dallas, Baylor, and Methodist—that are doing some terrific things. We have a message to present collectively about health care. This leads into the research and innovation discussion with respect to biotechnology and the life sciences.
There’s been talk for years about this area’s biotech potential.
I frankly don’t think we’ll ever become a biotech competitor with the [San Francisco] Bay Area or with Boston. But we can certainly be a kind of key secondary market.
You’ve served as chairman of the Dallas Committee on Foreign Relations for several years and seem cognizant of the need to raise Dallas’ global profile. How do you plan to help do that?
The first element is to more aggressively market Dallas and to carry the message about our strengths. It is an attractive place for investment, which comes [not just from places like] New York and Los Angeles. We suddenly have to play on the world stage.
Second, we have to be willing to invest in our community to have features that make us an international city. From a physical standpoint in the next two years, we will have the finest arts district; [but] we will have to continue to build up the operational and performing elements. If we do, this next century could see culture and the arts leading Dallas’ perception on the world stage.
Third, we need to communicate that Dallas is a world city, as with how we attract international events like the King Tut exhibit [coming to the Dallas Museum of Art later this year]. We need to continue to build our air routes, having nonstop flights to China and India, for example. Therefore, when people think of living or doing business internationally, they think of Dallas.
Do you have any economic-development trips planned?
We will be going to Mexico and then to China. You see significant investments in Monterrey, Mexico. I also see opportunities in the southeastern part of China, where there is significant growth. We will not solely focus on political capitols such as Beijing and Mexico City, but where the economic growth is taking place. We will convey how Dallas could become important to their economic growth.
Why China specifically?
You look at where the center of the world economy is moving, and clearly it’s moving toward China. We’ve doubled our trade with China over the last five years, and today 29 percent of Dallas’ trade is with China. So it’s important to have a presence and a visibility there.
What role might the consular corps play in raising our international profile?
I think it plays an important role, similar to how air routes play a role in Dallas’ perception on the world stage. Peru just opened a consulate location here. We have talked to a couple of other countries about locating offices in Dallas.
I’d not rather not say the specific countries, due to ongoing talks. But I can tell you they range from Asia to the Middle East to Europe. Historically, most of the consulates have been in Houston. But we’re a larger metro area, and our growth characteristics are better. So in some cases, we would be undoing tradition; other [consulates] would be new.
If you were creating a branding campaign for Dallas, what would it look like?
It would be very forward-looking. It would describe the assets we have. The brand would clearly indicate to the rest of the world: Dallas is a city that is moving forward, it is communicating its message aggressively, and it is soliciting investment in the city. It would indicate … that Dallas is willing to make those investments.
Do you think we communicate that now?
I think we have just started doing it, but there’s more to be done. Particularly in the international arena, we could do a much better job of elevating the visibility of Dallas. But I think we can do that even within our community, too.
The Dallas Convention and Visitors Bureau is one piece of the equation. So is the Greater Dallas Chamber and the city office of economic development. DFW Airport is being more aggressive, going after more international routes. And I’m always willing to jump on a plane to close a deal.
How might the city’s convention center play a role in the effort?
We made a large investment in the convention center. Realistically, if it is going to be successful, we need a convention-center hotel. If you look at the 20 largest convention markets, there are only two that do not have hotels. Strong cities across the world have a good, solid, exciting downtown area.
The convention-center hotel can be a springboard that allows retail, entertainment, and restaurants [to locate] in that part of downtown. We have the arts district element, and then the investment in Victory, Uptown, and the West End, with the Woodall Rodgers Park tying into that. We really need the third anchor—the convention-center area. If we do that, step back and watch great things happen.
But many members of the hotel industry would disagree about that need. They point to disappointing current hotel-occupancy rates and say there are enough available rooms in and around downtown already.
That’s right; some, but not all, (hoteliers) see the need for a convention-center hotel. But, we have a billion-dollar investment in the convention center. Over time, we’ll be less competitive without a convention-center hotel.
Look at the American Heart Ass-ociation, for example. They were committed to coming to Dallas in 2009, but canceled because there was no convention-center hotel. They’re on the calendar again for 2013, but they’ve told us frankly that, looking forward, if we don’t have a convention-center hotel by then, they’re not going to come.
So, the convention center is a great asset, but if we don’t continue to invest in it, what’s going to happen?
In another area related to growth, do you have a strategy for city operations and future development in terms of “sustainability”?
Absolutely. Our strategy is for Dallas to be an environmentally friendly city. With air quality and other environmental challenges, it is the right thing to do. Conversely, it makes very good business sense. When I ran Turner, we made a commitment about four to five years ago to be an industry leader [in this area]. Look at what the large organizations such as General Electric and Wal-Mart are doing environmentally. Even the investment-banking firms understand how important it is to make green investments.
The last city council affirmed that all of our large public buildings were going to be green buildings. A percentage of our fleets [vehicles] are considered “green-friendly.” In the last budget, we probably had the highest percentage of clean energy purchased of any major city in the nation.
Recently, with the strong support of the council, we established a policy that all new public and private buildings in Dallas will be green buildings. That is a powerful statement.
Is there a certain threshold or size of building to which that policy will apply?
Currently, it is 10,000 square feet for public buildings. Our goal is to move all new buildings, public and private, to this standard. However, we will do this in the right way. The city staff will identify the particular standards.
A timetable will be established that makes sense. We’re not going to do this suddenly, where one Tuesday morning everything happens. We are engaging industry and trade associations to make sure we do it properly. Everything built will have a green standard.
If you build green in the right way, it is not any more expensive. People may believe that the government doesn’t understand the implications of the policy. But my [former] company did $13 billion of green [business] and was the industry leader. I witnessed [first-hand] that you could build green for very little, if any, cost differential. Hopefully, I can credibly carry that message.
How can Dallas maintain its advantage as a low-cost locale over the long-term, with growth and demand chipping away at that advantage?
Our cost-of-living and cost of doing business [measures are] still very attractive. If you plot this out vis-à-vis other markets, Dallas looks favorable in the future. Other cities would die to have the amount of land we have in the southern part of our city, which gives us the chance to still grow the tax base. Whether considering the north, south, east, or west [parts of Dallas], that development opportunity is crucial to our long-term success.
At the same time, some have criticized Dallas for lagging behind other North Texas cities that compete aggressively for new business. Do you have any plans for new incentives to compete with nearby cities?
I’m not sure we have been as aggressive as we could [have been], understanding how important it is to market ourselves more aggressively. Other cities are providing economic incentives for business for their economic interests. This is no different than a business making an investment for a return. We have advantages that other cities don’t have. In today’s world, to be competitive, we are going to have to provide incentives.
What form might they take?
It could be tax incentives, workforce-training assistance, or educational opportunities. Part of the process is to be creative and to understand what the particular needs are of the prospective business. Sometimes it could be infrastructure or perhaps something on the tax side. There are a host of different tools.
How do you keep your ear to the ground about companies that might be good relocation candidates?
We have groups of people at City Hall who work with local chambers and local business organizations that identify candidates. We are also [proactively] identifying businesses that we think may be candidates at some point and are initiating the conversation.
Do you get involved in the effort personally?
Yes, and I want to strategically pursue companies [as relocation candidates] more. I’ve visited with businesses outside of Dallas and in the region and tried to encourage them to move. I’ve also visited with companies in the city, to encourage them to stay.
How has that gone?
Pretty well. If we win one or two a year, we’ll be doing well. And I’ll think we’ll do that easily.