JUNE BUSINESS REVIEW 10 DALLAS MYTHS DEBUNKED

EVERY CITY HAS THEM-MYTHS that become stock descriptions repeated to every mother-in-law, friend, and business traveler who visits. These almost-facts are recited during the standard Sunday afternoon car tour down Lakeside Drive to the West End. Before guests can even get to the airport they absorb loads of inaccurate local lore that they carry out of the city and spread across the countrv. But where are these popular Dallas myths written in stone? In our uncompromising quest to bring our readers the truth, we decided to leave no cliche unchecked, no legend un-scrutinized, no mystery uncloaked. Here are ten of Dallas’s most frequently repeated economic myths, debunked once and for all. Plus, the Dallas/Fort Worth 100 ranks by fiscal 1986 revenues the largest publicly held, Metroplex-based corporations, and Business Best and Worst recaps the last year with a look at the upside and the downside.

1. Dallas has no reason for being.



Okay, we don’t have a major river, or an ocean, or even a mountain view. But Dallas grew and developed as a distribution center in part because it was centrally located. According to historian A.C. Greene, Dallas founder John Neely Bryan picked this fork on the Trinity precisely because he thought it would be an important distribution point as the head of navigation in Texas (for both riverboats that made it here).

The day of the riverboat is gone, but Dallas has emerged as one of the major distribution centers in this country, as witness the growth of the Dallas/Fort Worth International Airport, now the fourth busiest airport in the world based on total passengers. Forty million people traveled to or from D/FW in 1986. The airport, which generates $5.5 billion for the Metroplex economy, handled 180,000 tons of cargo last year. The U.S. customs district headquarters at D/FW is a 250-acre foreign trade zone with airfield, highway, and rail access. Six major railroads serve the Dallas ! area, along with 138 air cargo/express car- ; riers; fifty-four trucking firms have Dallas terminals. Bryan was on to something here.



2.Downtown Dallas is overbuilt.



Those who’ve been around long enough to remember Jim Cloar, former executive director of the Central Dallas Association. may recall one of Cloar’s favorite theories of growth: a city must have several million square feet of vacant Class A office space to attract major corporate relocations. Downtown Dallas certainly has that now. According to Fults & Associates, 8,033.083 ; square feet stand vacant in the Central Business District, and Christie Cameron, director of research for Fults, says that’s not necessarily bad news. Overall, Dallas has a 68 percent occupancy rate, but downtown the occupancy rate is 72 percent. And in the newer buildings-those built between 1980 and 1985, the favored locations for companies moving to Dallas-the occupancy rate is 81 percent, a pretty healthy number. That leaves about 5 million square feet of prime downtown office space waiting for ; some lucky corporations-not necessarily happy news for the developer or bank that has to carry that property, but a powerful lure for Dallas in the relocation game.

Absorption is strong in Dallas, depending on how you look at it. According to the Swearingen Company, in 1986 Dallas ranked fifth in the world in absorption with 6 million square teet leased following London, 14.9 million; Washington, D.C., 11.8 million; Los Angeles, 7.8 million; Boston. 6.6 million; and Chicago, 6.6 million.



3. Dallas is an international city.



London. . .Paris. . .New York… Dallas’? Something is definitely wrong with this picture. Now we’re not saying that Dallas doesn’t have the potential to be an international city, but believing is not the same as being. Do you see hundreds of black limousines with diplomatic license plates driving around Dallas every day? Do you really think the corner of Bryan and Fitz-hugh can compare to Chinatown? Have you ever had anyone try to buy your wares with drachma? Dallas has twenty-six foreign consulates. Even Houston has fifty-six foreign consulates, far short of a Los Angeles or a Washington. But don’t think that gives Houston a secure position as the international capital of Texas. Yes, it has a seaport, but last year the D/FW airport outdid Houston Intercontinental in incoming international cargo. D/FW has also pulled ahead of Intercontinental in terms of international passengers. In the month of January 1987, D/FW airport recorded 76,049 incoming international passengers to Inter-continental’s 72,399.



4.Dallas is a great place to live, but I wouldn’t want to visit there.



At any one time in Dallas, a person seeking playtime activity is likely to find some fifty-seven different movies showing at more than 200 theaters, along with at least five dance troupes dancing, six plays play-ing, seven symphonies harmonizing, and ! 8,000 softball teams vying for a title. You want more? Professional baseball, basket-ball, football, soccer, and tennis. Ditto for college sports.

Getting hungry from all of this activity? Choose from 389 hamburger joints, 222 pizza places, 381 Mexican restaurants. 91 Oriental food operations, 64 cafeterias, and 73 steak houses that help make up the 4,515 restaurants in the Dallas area.

Who says Dallas is all work and no play? J. Peter Kline, president of the Hotel/Mote Association of Greater Dallas and of Harvey Hotels, thinks Dallas can only blame itself for the creation of this myth. “Historically, Dallas has been proud of its business atmosphere and has projected itself as all business while doing nothing to promote the city as a fun place to live and visit,” Kline says.

He’s got the numbers to prove that theory. Kline says San Antonio will spend S1.25 million this year advertising tourism while Dallas will spend $125,000. San Antonio has approximately 15,700 hotel rooms compared to Dallas’s 35,000. But last year, Kline says San Antonio outdid Dallas in tourist trade by more than 300,000 hotel rooms rented.

“Their weekend occupancy rate is over 65 percent while ours is under 45 percent. That relates directly back to dollars spent on tourist promotion,” Kline says.

Kline says Dallas can challenge San Francisco, San Antonio, and New Orleans, three top weekend tourist destinations, when it comes to meeting tourists’ basic needs-eating, shopping, drinking, and people watching.

“The shopping here and the representation of stores is second to none with the exception of New York, Chicago, and LA.,” Kline says, listing Saks Fifth Avenue, Gump’s. Tiffany, Stanley Korshak, Bloom-ingdale’s, Marshall Field’s, and the grand-daddy of them all, Neiman-Marcus, to name just a few. “We should be able to attract tourists from a 400-mile radius to Dallas on shopping alone. Nightclubs have exploded in the last three years along Lower Greenville, in Deep Ellum, and the West End. Ten years ago you could count the good restaurants in Dallas on one hand,” Kline says. “Two years ago, I went looking for a new restaurant concept to bring to Dallas that wasn’t already here, and I came back empty-handed,” he says. “We already have the attractions. It’s not something we have to create.”



5. Women can’t break through the good ol’ boy network in Dallas.



This statement is simply obsolete, although Dallas hasn’t come as far as it can regarding women in business and in positions of power. Dallas has a long tradition of being a “man’s” town, a place where a tight fraternity of forefathers passed down the power to the favorite sons. But the number of women who have broken through those ranks is steadily increasing. Just a few of the trailblazettes: business leaders Kim Dawson, Ebby Halliday, Caroline Hunt Schoellkopf, Mary Kay Ash. and Lucy Bill-ingsley; civic leaders Ruth Collins Sharp, Camille Cates Barnett, Nancy Brinker, Adelfa Callejo, Nancy Harvey Steorts, Lillian Bradshaw, and Harriet Miers; and political leaders Diane Ragsdale, Adlene Harrison. Eddie Bernice Johnson. Lori Palmer. Catherine Crier, Nancy Judy, Yvonne Ewell. . .and Annette Strauss. Dallas’s second woman mayor. (In 1976. Adlene Harrison served as interim mayor following the resignation of Wes Wise.)

Upon her election as mayor-with 55.99 percent of the vote-Strauss said. “I will be mayor for all of Dallas, a city where one is limited only by imagination-where neither race nor gender nor creed can stand as roadblocks to one’s success.”



6.Growth in Dallas has come to a halt.



The Dallas economy made it through 1986 with a respectable record, thanks in part to a 2.6 percent growth in population-slower than in boom years, but substantially above the U.S. rate. According to the latest U.S. Property Report, published by Richard Ellis Inc., real estate investment advisers, Dallas will continue to experience slower growth rates in the near term, but will keep well ahead of the national pace. The report cited as further evidence of Dallas’s expanding economy a 7.5 percent increase in personal income in the Dallas area for 1986. Inc. magazine recently named Dallas/Fort Worth fourth in its list of the fifty fastest-growing U.S. cities following Austin, Orlando, and Phoenix.

The Dallas chamber says that in 1986 alone, 10.000 new jobs in Dallas from corporate relocations or expansions were announced, including the FoxMeyer Corporation’s consolidation of its Denver office with the Carrollton headquarters; Swift Independent Packers Inc.’s move to Dallas; and Seven-Up Company’s consolidation of operations with Dr Pepper.



7.Dallas is not a city of great architecture.



Dallas Morning News architecture critic David Dillon will not completely refute this statement. However. Dillon will admit that Dallas has improved from its crewcut skyline of the Seventies.

“Unlike ten years ago. there is a cluster of buildings in Dallas that is as good as anything being done in the country,” Dillon says. He’s talking about the Allied Bank Tower (“a very good contemporary building that I initially didn’t like but have come to appreciate”); the LTV Center (“which for a corporate, speculative building is really very good and shows a willingness to pay for good design”); the Dallas Museum of Art (“a very good-but not great-building as a home for art”); and the Frito-Lay headquarters in Piano (“a very sophisticated building”).

Lawrence Speck, adjunct curator of architecture at the Dallas Museum of Art, says there has been more chance-taking in Dallas in recent years. “Not always in the direction that I would prefer, but certainly an improvement,” Speck says. Speck is director of the Center for Study of American Architecture at the University of Texas in Austin.

His favorite building in Dallas is the Allied Bank Tower, specifically at street level. “It’s a dazzling oasis and an extraordinary piece of design,” Speck says. His other favorite, predictably, is the Dallas Museum of Art.



8.The drop in the price of oil has devastated the Dallas economy.



Eighteen oil- and gas-related companies are ranked in the 1986 Dallas/Fort Worth 100. Of those, six recorded positive net income for 1986. By way of comparison, of the remaining eighty-two companies from other industries, sixty-seven recorded positive net income for 1986. Using the Dallas/Fort Worth 100 as a measure, only 33.3 percent of oil- and gas-related companies in the Dallas area made money last year, but 81.7 percent of companies in other industries managed to make money-regardless of problems in the oil industry. If the oil and gas industry had “devastated” the Dallas economy, those two percentages would be more similar. Yes, that’s a gross oversimplification of the issue, but then so is the myth that Dallas has been destroyed by the drop in the price of oil.

Let’s say it one more time, all together now: the business of mining represents a total of 1.8 percent of the total number of jobs in the Dallas area.

Lawrence A. Crowley, director of research for Rauscher Pierce Refsnes Inc., says although there’s no question that the downturn in energy has affected the economy, Dallas has adjusted without significant dislocation-especially when compared to Houston or New Orleans.

“The economy in Dallas is much broader than I think we tend to give credit to. I think Dallas was fortunate that in the early stages of the energy downturn-’:82, ’83, ’84-this city was enjoying general growth benefits from other industries, so the blow was softened by positive trends in other areas,” Crowley says. “The industry is still here. It is still operating, albeit at a rate that is not satisfactory. But the decline in jobs is about over. The industry has stabilized.”



9. All the main engines of the Dallas economy are down.



With more than $18.8 billion in prime defense contracts active in Dallas, it is highly inaccurate to say that all of the engines of the Dallas economy are down. And that figure does not include Fort Worth defense contractors, which can claim in their ranks General Dynamics, the nation’s single largest defense contractor.

Dallas’s largest defense contractors employ more than 60.000 people in the Dallas area. In the Dallas/Fort Worth Business Journal’s, annual ranking of Dallas/Fort Worth defense contractors, eighteen out of twenty-five companies listed showed an increase in dollar value of prime defense contracts between November 30, 1985, and September 26, 1986.

Although defense spending is expected to remain flat through the end of the Reagan administration, William T. Long, an economist with the Federal Reserve Bank of Dallas, says Dallas is probably in better shape than the rest of the state because the kinds of contract awards the defense department is moving toward-electronics research and development, the so-called high-tech defense activities-are the strong points of Dallas defense contractors.

Right now Dallas ranks slightly above the state average in per capita defense spending. In real terms, Long says. Dallas could claim $1,000 per person in defense spending in 1985 compared to $900 per person in Texas and $860 per person for the U.S. as a whole. The defense department spent $3,000 per person in Fort Worth in 1985. Long doesn’t expect those numbers to change much for 1986.



10.Dallas’s high-tech industry is losing out to Austin.



Since the inception in the summer of 1982 of Austin’s Microelectronics and Computer Technology Corporation, better known as MCC. Dallas has been whining about losing high-tech industry to the capital city. MCC, a research consortium that started in !983 with ten member corporations, now has twenty, having added thirteen companies over the years and seen three leave. Three are expected to leave this year, and others are expected to take their places. This coming and going and spinning off of companies (with the taxes they pay and the jobs they create) is just what makes Dallas, on the Silicon Prairie, jealous of Austin, the High-Tech Hills. But Ted Enloe, 1986 chairman of the Dallas chamber’s economic development committee and president of Lomas & Nettleton Financial Corp., thinks that in the long run. Dallas may benefit just as much with MCC in Austin as it would if the think tank had chosen Dallas as its location.

Enloe’s theory is that the companies thatspin off from MCC won’t necessarily stayin Austin. “They’ll go where the workforceis, where the transportation is.” Enloe says.And in those areas. Enloe and others thinkDallas-with a large workforce, an international airport, and a pro-business atmosphere-has a distinct advantage.