ON THE TINY stage of the Lake-wood Library auditorium sit six members of Dallas’s municipal government, looking a little queasy as about forty very irritated citizens fling questions at them. Though this is one of the town hall meetings held regularly by city councilman Craig Holcomb, the unusual subject this night in late September has brought out more than the usual neighborhood advocates and crime-watch buffs. The subject is Starplex, the new amphitheater at Fair Park.
For Holcomb. this is damage-control time- and he has used his prerogatives as a council . member to persuade high-ranking city employees to help out. There’s Jan Hart, first assistant city manager; Frank Wise, director of the Park and Recreation Department: Galen Sparks, from the city attorney’s office; Ed Levine, the temporary chief of building inspection. And there’s Jim Graham, a membe of the park board. Graham has been a loud critic of tl Starplex deal.
A little rubbernecking around the audience reveals even more participants in a municipal morality play that has occupied the editorial pages and TV news shows for the past year: Rodney Ecker-man. vice-president for Houston-based PACE Entertainment Group: Sid Stahl, a former city councilman and PACE’S Dallas attorney; Richard Lannen. an attorney for entertainment giant MCA Corporation: and several members of a community group called Friends of Fair Park.
For the audience, it’s a chance to find out what went wrong with a deal that was supposed to be a boon to the city. For Hol-comb, it’s a chance to explain, to confess, to defend his mayor. But try as he might. Holcomb can’t drive a nail in the Starplex coffin. Not with Graham, the original Chicken Little, around. After every member of the city staff explains his or her various roles and how the arrangement benefits the city, Graham wades in.
“You’ve heard the party line tonight,” Graham says, echoing a refrain he has been playing for the past nine months. “The deal stinks.”
The crowd demands to know the answer to one seemingly sim-ple question: who negotiated the contract between the owners of Starplex and the city? Reluctantly, Holcomb gives them a name: Gayle Pepper, head of Property Management, a high- ranking member of city manager Richard Knight’s staff.
But a better answer might have been this: everybody, and nobody, did the deal. “There were too many cooks in the kitchen,” says Graham, but nobody to take responsibility when the soufflé flopped. City attorney Analeslie Muncy says she simply read the contract for legal style; city staff members say they were simply doing what they were directed to do by the mayor and the council. The mayor and the council say that negotiations were handled by the city staff, who then briefed them inadequately.
“They said it was a good deal,” Holcomb said, admitting that he, like all the other council members, had not read the actual document, “and ten little lemmings on the City Council voted for it.” The lemmings, it seems, have changed their minds. For months city officials bragged that they had saved the cultural heart of Dallas from its evil northern neighbor and injected new life into a decaying portion of the inner city. Instead of going to Carrollton. Starplex, an outdoor contemporary music amphitheater jointly owned by PACE and MCA, was built at Fair Park to continue the great tradition of StarFest, the popular concert-on-the-lawn series sponsored by the Dallas Symphony Orchestra. Mayor Annette Strauss and councilman Al Gonzalez, initiators of the whole thing, proclaimed the deal as a sign that Dallas was no longer willing to lose important institutions to the undeserving suburbs. No more “Irving Cowboys,” no more “Arlington Rangers.”
But slowly, The Deal turned sour. Starplex became a giant rock ’n’ roll tarbaby, and trouble seemed to stick like black pitch to whoever touched it. As the city scrambled to mitigate the political damage, as the owners stalled and stammered and wondered aloud why everyone hated them, Starplex, like the hulking Jason in the movie Halloween, became the issue that would not die.
It depends on who you talk to whether the contract between MCA/PACE and the city of Dallas smells good or bad. Strauss, Knight, and the owners of Starplex contend that the city is getting a fair return for its investment, that the kinks in the operations can be worked out. Others-Graham and Gonzalez among them- contend that the city got taken. In early October, the Dallas City Council voted unanimously to reopen contract negotiations, appointing Graham as the city’s sole negotiator. After blustering that “a deal’s a deal,” MCA/PACE finally agreed on October 14 to renegotiate the contract.
But the Starplex story is really not about a business contract. It’s about Dallas jingoism at its worst, about political posturing, about public relations gaffes, and plain bad luck.
The furor over the contract raises concerns not only about this deal, but about the city’s system of government and the structure of city management, about the role of the city manager versus the role of the mayor. It opens up the as-yet unanswered question: who’s really in charge of the city of Dallas?
AL GONZALEZ. ELECTED TO THE CITY COUNCIL JUST a few months before, couldn’t believe what he was hearing. It was the July 21, 1987, meeting of the council’s municipal affairs committee; Al Lipscomb, Jerry Rucker, and John Evans also were present. Leonard Stone, executive director of the DSO, was telling them that the symphony had earlier in the year signed a twenty-year agreement with PACE Productions of Houston to produce its summer StarFest series at an amphitheater to be constructed in Carrollton. Gonzalez wanted to know how the symphony could even think of leaving Dallas, the city that passed a bond issue to build the spectacular $75 million Morton H. Meyerson Symphony Center, the city that each year pumps more than $1 million in operating funds into the organization.
Gonzalez got up from his chair, went to a telephone, and dialed long-distance information. He eventually reached Allen Becker, founder and chairman of the board of PACE, and asked him if he had signed a contract with the owner of the land. “No.” was Becker’s answer, according to Gonzalez. “Have you shaken hands on the deal?” was Gonzalez’s next question. Becker again told him no. (Brian Becker, Allen Becker’s son and president of PACE, says that they did indeed have a contract with the owner of the land.)
“Are you interested in coming to Dallas?” asked Gonzalez.
“Yes, but we can’t find a location,” Becker told him.
“I’ll find you a location,” Gonzalez promised, “if you’ll talk to us about it.”
Becker agreed, and at a meeting several days later, Gonzalez presented his best option: Fair Park. (Actually, the idea to put the amphitheater in Fair Park came from a friend of Gonzalez’s-Jack Beckman, one of the owners and operators of the Mesquite Rodeo Arena, who drove the city councilman around the park, pointing out the advantages of putting the amphitheater in the inner city.)
The announcement that the symphony and PACE had agreed to move the StarFest series to Carrollton had actually come several months earlier, in April. But the news had attracted little attention at the time, obscured by the immediacy of the municipal election. Besides, it was well known that the symphony had been looking for a summer home for five or six years, a place where the musicians, who are paid year-round, could perform and bring in revenue during the off-season.
In recent years, the DSO had made $250,000 to $300,000 annually from putting on StarFest, a summer outdoor music series that started in 1977 under a tent on the parking lot at NorthPark shopping center. As StarFest grew, it moved first to the EDS facilities at Forest Lane and Central Expressway, and then to a site at Park Lane and Central. But over the years, the series changed. Of the fourteen annual shows, the Dallas Symphony played only two or three times. In 1987, the symphony played only once, instead acting as the booking agent to bring in entertainers like Crosby, Stills and Nash, James Taylor, and John Denver, acts past their heyday but still very popular.
But the symphony wanted out of the booking business. It was risky-acts might not show, and the profit margin was such that if only two of the fourteen performances were canceled due to bad weather, the symphony would actually lose money. The DSO began looking for a partner-someone to build and operate an amphitheater in a beautiful, pastoral setting, someone who would pay the symphony a fixed amount to perform, regardless of attendance.
In 1983, the symphony board talked to a company from Atlanta that was planning to build an amphitheater in Lewisville near the intersection of I-35 and FM 3040. The site, a rural setting with major freeway access, looked perfect. But though it had the support of many on the Lewisville City Council, the project was killed by conservative and religious community groups opposed to a facility that would sponsor rock shows.
Soon after that, the symphony board decided to hook up with PACE Productions, a Houston-based company that had been producing concerts in Dallas for years, including many of the StarFest shows. PACE entered the Eighties as one of the largest regional producers of concerts and other entertainment shows. But the company, which now included Brian and Gary Becker, Allen Becker’s sons, was looking to expand, to become more “asset” based rather than operations-oriented.
The concert industry was maturing-another way of saying it had stopped growing, and competition was becoming more fierce. PACE wanted not only to produce the shows, but to own the arena facilities as well, which would give it access to lucrative concessions, parking, and other revenue.
PACE began looking at amphitheaters, outdoor arenas where large shows could be presented in a natural setting, such as Wolf Trap in Maryland. With an amphitheater, they could appeal to those baby boomers who had the concert-going habit, but tended to avoid smoky arenas and rowdy crowds as they got older.
But if careful analysis of similar endeavors across the country, including Lewisville, showed PACE anything, it was that they needed the Dallas symphony. All it took was one rumor, one news story about a rock ’n’ roll promoter moving to town, and Dallas’s powerful-and conservative-church leaders could galvanize community opposition. The DSO would buy PACE a veneer of respectability, a touch of class.
In 1983, PACE and the symphony began working with then-mayor Starke Taylor and former park board president Betty Marcus to find a suitable site for a permanent outdoor facility that would produce seventy to eighty shows during the seven-month outdoor concert season. For three years, they looked at two dozen sites, ranging from Flag Pole Hill near White Rock Lake to Old Burnett Field in Oak Cliff. Something was wrong with every site: too expensive, too small, too residential, poor freeway access.
Fair Park, the historic South Dallas art deco park built for the 1936 State Fair, was only briefly considered. The symphony had been trying for years to get out of Fair Park; it wasn’t “pastoral” and it was perceived as having a negative image and a severe security problem. Besides, the city staff told PACE that that district’s councilwoman, Diane Ragsdale, would never agree to an amphitheater there.
At one point, the city and PACE agreed to locate the amphitheater at North Lake, a site north along the Irving-Dallas border. The city had a ninety-nine-year lease on the property, which was owned by Dallas Power and Light. The symphony signed a twenty-year agreement with PACE that would have relocated StarFest to North Lake. The park department negotiated a contract, but PACE’S lender would not approve the deal because the site was financed by bonds that used the land as collateral. After nine months of effort, the plan was abandoned.
Then, in the summer of 1986. PACE and the DSO discovered a site in Carrollton. The symphony board was thrilled. The site was near North Dallas, the symphony’s prime customer area. There, they could also attract people from the Mid-Cities and Fort Worth. In December 1986, according to Brian Becker. PACE signed a contract agreeing to purchase sixty-four acres at Huffines Ranch in Carrollton and lease an additional fifty acres for the amphitheater and related parking. The symphony amended its North Lake contract, agreeing to come to Huffines Ranch. The DSO would play a minimum of fourteen performances, and PACE would pay them $250,000 to $300,000, the same amount they had made from StarFest. PACE would have the symphony’s all-important backing. and the use of the name StarFest, to which the symphony held the copyright. The zoning process-necessary because PACE wanted a special use permit to sell alcoholic beverages-began in the spring of 1987. The city of Carrollton drove a hard bargain, requiring an extensive noise study. a cost-benefit analysis, and a feasibility study. The city was concerned about its image; a sophisticated amphitheater could enhance it, a rock ’n’ roll site could hurt it. “Initially, the fact that the symphony was involved helped,” says Craig Farmer, who was then director of planning for the city of Carrollton.
But the city wanted to be careful. Finally, nine members of Car-rollton’s city staff flew to Starwood, PACE’S amphitheater in Nashville, to investigate the proposal. “We felt comfortable with it,” says Craig Farmer. “PACE ran a tight ship.”
A sense of urgency pervaded the process, as it would in Dallas. “PACE wanted to be the first amphitheater in the area,” Farmer says. “The metro area couldn’t support too many amphitheaters.” PACE even agreed to set up a community review board to assure the city it would be responsive-and to hurry the process along. One source close to the negotiations says that PACE was fearful another company would snatch the DSO’s support from them, or that they would get into a bidding war with another amphitheater company-as they had in Atlanta, against a giant entertainment conglomerate named MCA. PACE and MCA, both racing to build amphitheaters around the country, were clashing in other cities.
The zoning process took three months. PACE president Brian Becker estimates that his company spent $300,000 to $350,000 developing the amphitheater to that point.
But from the beginning, PACE told the symphony and the Carrollton City Council that there would be no picnic baskets, no lawn chairs at this StarFest. They argued that by restricting baskets and selling their own alcohol, they could better control intoxication. But their main argument was not about managing drunks; it was about money. Food and drinks were too big a portion of PACE’S revenue to allow food brought from home. But, in response to pressure from the city, PACE did promise upscale offerings like croissant sandwiches and international nights with Chinese. Indian, Thai, and Mexican food, something that was never mentioned in Dallas.
On August 18, 1987. the zoning was approved. Carrollton had snatched away Dallas’s beloved StarFest. Or so it thought.
SHORTLY AFTER THE ANNOUNCEMENT IN THE SPRING THAT Starfest would be going to Carrollton. Mayor Annette Strauss ran into Ida Papert, a board member of the Park and Recreation Department. (Papert would become president of the park board several months later, in September 1987.)
“She [the mayor] asked why didn’t the park board or the park department try to get in touch with PACE to see if maybe we could get them back here.” Papert says.
In her fourth year on the board, Papert knew the history of the exhaustive search for a place for StarFest in the city limits of Dallas. She explained that to Strauss, mentioning that PACE had even looked at Fair Park. “I still think that’s a possibility,” Strauss told Papert casually. “I’m working on it.”
Meanwhile, Gonzalez was working on his own approach. After calling PACE in July, Gonzalez met with Allen and Brian Becker, pushing Fair Park as an alternative to Car-rollton. The Beckers said they were interested; for a variety of reasons, Fair Park was appealing. It had excellent freeway access and was close to downtown and its fringe residential community. But there were problems. Fair Park had a negative image, and it was represented by councilwoman Ragsdale, who was presumed to be adamantly opposed to such a proposal.
Gonzalez told the Beckers he would take care of Ragsdale. He drove her around the back side of Fair Park, a bare dirt parking lot used for overflow for three weeks of the year during the State Fair of Texas. The land had been taken in 1972 in bitter condemnation proceedings, but little had been done with it.
Ragsdale’s chief concern was noise. The roar from the Grand Prix race in previous years had her constituents angrily complaining to her. What would happen when rock groups started blasting seventy to eighty evenings a year?
But after Gonzalez explained that they could face the amphitheater across Fair Park instead of over the neighborhood, build sound walls, and landscape the area, Ragsdale agreed. “What Diane recognized was that there was more than enough votes to put Starplex in Fair Park,” Ragsdale says. “I tried to get what I could.”
In addition to noise reduction provisions and agreements to hire minorities, Ragsdale pushed a proposal approved by the council in 1986: a South Dallas Economic Development trust fund that would finance small business and cultural ventures in South Dallas. The proposed trust was to be funded by a special assessment on admissions to events at Fair Park-ten cents on every dollar. Though the proposal had been approved a year earlier, no progress had been made on funding the trust. Ragsdale sent a memo to Richard Knight with her concerns about noise and traffic and asked that ten cents on every dollar of admissions to the amphitheater go to the South Dallas fund-a proposal that Ragsdale says was later distorted by the mayor.
With Ragsdale’s support locked in, Gonzalez began to buttress political support for the amphitheater. He went to the chambers of commerce-Dallas, Black, and Hispanic. He corralled neighborhood and civic groups, asking them all to write letters of support. Gonzalez pushed not only civic pride in keeping the symphony’s StarFest, he pushed economics-the sales tax revenue, jobs for minorities, economic development in a troubled area of the city.
Gonzalez gathered his letters, and on August 27, when Mayor Strauss was in La Jolla on vacation, went to Richard Knight. “I said. ’Here’s the community support for this thing,’ ” Gonzalez says. “I told him to go cut the best deal he could.” He also told Knight that the deal had to be done quickly; PACE wanted to open in the summer of 1988. Also, the arrangement had to be competitive. PACE didn’t want to spend any more than it would have in Carrollton-about $10 million, which included $3.5 million for the land. And, given the reputation of Fair Park as a dangerous place to be after dark, they had to be guaranteed safe, secure parking.
So far, Strauss had not said a word publicly about the symphony moving to Carrollton. But she was, she says, working independently of Gonzalez to convince PACE to move to Fair Park. Knight confirms that “the first council member to come to me and urge that we work to bring PACE to Dallas was Annette Strauss.” Knight gave the job of negotiating the deal to Gayle Pepper, who had negotiated many contracts involving real estate for the city in the past.
But it’s not clear whether Knight’s staff should have been negotiating the contract. The city’s North Lake deal with PACE had been negotiated by PACE attorney Sid Stahl and Jack Robinson, then-park director. Technically, the park and recreation department is not under the jurisdiction of the city manager’s office; administration and policy-setting involving the city’s park lands and programs-including those at Fair Park-are handled by the park board members, who are appointed by and answer directly to the City Council. Frank Wise, the current park director, answers to the board, not the city manager.
Wise says he wondered why he and the park board were not in on the negotiations, but says he was later told negotiations would have to move fast and be kept “close to the vest.” Later, he was told, he and the park board members would be brought in on the details. “It was fair game as to who would negotiate the contract,” Richard Knight says. “He [Wise] was included as part of the negotiations.”
It appears that the PACE contract got caught in a power struggle between the park department and the city manager’s office; this was going to be a great deal for the city of Dallas and the city manager’s staff wanted to be sure they got the credit. In the fall of 1987, the autonomy of the park department was under seige. It was no secret that Knight felt that the park department should be under his jurisdiction, and that the board’s power should be weakened.
That pressure and the disarray caused by recent turnover on the park board led to uncertainty about their role on the part of park board members. Neither they nor Frank Wise were asked about the negotiations until they were well under way. But they would be the ones to live with the contract; under an agreement with the State Fair of Texas Board, the city’s park department would take over management of Fair Park January 1, 1987.
In early October, while out of town, Papert got a message saying she should expect a conference call that afternoon from city manager Knight, park department director Wise, and Mayor Strauss.
Knight, speaking from the mayor’s office, came on the line. “Ida, guess what?” Knight said. “PACE and the amphitheater are coming to Fair Park.” Knight told Papert PACE had agreed to a proposal made by the city.
Papert was excited and surprised. Excited, because she felt the amphitheater would be a boon to Fair Park. Surprised, because she hadn’t heard anything from the mayor about the idea since spring. She wondered how the city staff had gotten around opposition from Ragsdale and the symphony.
After returning to Dallas several days later, Papert met with Knight for a briefing on the proposal. At that point, they had no contract, just a four-page letter from Strauss to Allen Becker, dated October 8, outlining what the city would do to bring PACE to Fair Park. The details would be worked out in negotiations with Pepper, the Beckers, and Sid Stahl, a good friend of the mayor’s who. after years on the City Council and on the park board, was in familiar territory.
Many of the promises showed up in the final contract, which sealed a very good deal for PACE. Besides a forty-year lease at $1 per year, there were other conditions: the city would construct the parking lot; PACE would receive all parking revenue on the days it scheduled performances; the city would not allow events to be scheduled at Fair Park that would conflict with PACE; PACE would not have to go through the competitive bid process; and the city would help PACE obtain all building permits and its liquor license. Strauss also promised that the Comet, Fair Park’s historic wooden roller coaster, would be demolished and removed. That promise later met ferocious opposition from the Landmark Commission, so the site for the amphitheater was shifted.
The arrangement required relatively little from PACE. The company would pay for and construct the amphitheater and develop an affirmative action program to hire minorities. During the State Fair, PACE’s parking rights would extend only to the VIP area; and at the end of forty years, the amphitheater would become the city’s property.
“I started going through the letter and I wanted to cry,” says Papert. Though the letter didn’t mention revenues, it seemed to her that the proposal ignored the provisions that had been hammered out in the North Lake contract, that it gave away control of the park to PACE with the city getting little in return. She didn’t understand why the park board hadn’t been consulted.
Al Gonzalez says he was told about the mayor’s interest after he had been working on the project for several months. After turning his information over to Knight in late August, he heard nothing about the negotiations for several weeks. On September 14, Gonzalez wrote Knight a memo asking for an update, but received no response.
Gonzalez says that Knight approached him a few days later, shortly before a City Council meeting, and told him “the mayor wants to get involved.” She wanted, Gonzalez says, to lead the charge to bring PACE to Dallas. And Knight wanted to please the mayor.
Though irritated, Gonzalez says he nevertheless agreed to orchestrate a charade of sorts with Knight and the mayor at the next council meeting. During the session, he pointedly asked Knight to update the council on the PACE deal. The mayor stepped in. “I’ve been working with Richard on that,” Strauss told the council. “Richard, why don’t you brief Al?” At that moment, leadership on the issue passed officially from Gonzalez to Strauss. It was her first public comment on PACE.
Asked about the “charade.” Knight chooses his words carefully. “I don’t remember the details of those occurrences as they have been represented to you in its entirety,” Knight says. Knight, Gonzalez, and Strauss do agree that from that point forward, Gonzalez was cut out of the deal. Neither the mayor nor the city manager will say why.
Gonzalez charges that Strauss used the issue to build up her political bank account. She would be the mayor who saved the Dallas symphony. Gonzalez says his input was ignored. He denies that his own interest was political. “What did I have to gain?” Gonzalez asks, adding that he does not plan to run for reelection.
While they courted PACE, Strauss and Knight turned to the folks who ostensibly had been the reason behind the whole thing: the symphony. The DSO board was adamant; it didn’t want to go to Fair Park. “She got them in a room and hot-boxed the hell out of them,” says one person close to the negotiations. But when the vote came, the divided board turned down the proposal to move to Fair Park, enraging Strauss. She went ahead with the negotiations, hoping that the threat of lost funds from the city would force the symphony into accepting the Fair Park location. Strauss finally prevailed, but significantly, the symphony signed only a four-year contract with PACE and retained the name StarFest.
Meanwhile, Papert took Strauss’s letter wooing PACE to the park board. Members met for three hours in a closed session and drafted a list of concerns. Chief among them was revenue to and control of Fair Park. The park department was taking over management of Fair Park from the State Fair board on January 1, 1988, and needed a minimum of $3 million to operate and maintain the fifty buildings there. To earn that, the Fair Park manager would have to be aggressive in renting out buildings and scheduling activities; how could he do that if PACE could preempt other events?
The board, still new and unsure of its role, was united in its dislike of the “giveaway” of Fair Park, Papert says. They passed along their concerns to Knight. If they were going to have to administer the contract, they wanted some input. But as the negotiations proceeded, members heard nothing until December 1, when Papert got a call from a friend who had gone to school with Allen Becker. The friend casually mentioned that he had heard the negotiations were done, and that the City Council and the park board would be briefed the next Wednesday. Papert was stunned and angry.
So. deciding to bypass Knight, she called Allen Becker and arranged a meeting on December 4. The contract looked far different from Strauss’s earlier letter, but many of the park board’s concerns still had not been addressed. During several meetings with the Beckers. Papert says, she was able to insert some clauses into the contract that assuaged some of the board’s fears.
On December 9. the park board and the City Council were briefed in general terms about the contract. Some council members wanted to know how the amphitheater would affect Reunion Arena, which is owned and operated by the city. A city staffer explained that Reunion would lose approximately $500,000 in revenues each year, but those revenues would have been lost anyway if PACE went to Carrollton. With the amphitheater at Fair Park, the city would at least reap the sales tax and the rentals.
And somehow in the negotiations, PACE’S contribution to the South Dallas Economic fund became not 10 percent of each ticket ($2 for every $20 admission), but five cents of each ticket. Ragsdale says that Strauss called her during the negotiations and said, “I can’t get 10 percent. I can get 5 percent.” Ragsdale says she told Strauss. “That’s not good enough. This will set a precedent.”
But the final contract gave not 5 percent, but five cents. When Ragsdale protested, PACE agreed to raise the donation to ten cents per ticket, still much lower than the original proposal. Instead of as much as $700,000 (based on 400,000 ticket buyers each year) the fund would receive $40,000. In spite of that, Ragsdale accepted the deal.
But the contract was not discussed in depth. The council members did not read it; indeed, they would point out later that it is not their job to read city contracts. City attorney Analeslie Muncy would later say that she “was not familiar” with the contract, and had read it only for legal style. No one versed in entertainment contracts studied the document. And though the council voted four times from December through February on matters related to the amphitheater, they never actually voted to approve the contract. Under the city charter, they didn’t have to.
Most of those present seemed pleased that a deal had been struck. The council passed 8-0 a resolution authorizing the city manager to enter into a contract with PACE and to spend $3.5 million to construct a 6,500-space parking lot that would remain under the control of the city, a clause that reassured Friends of Fair Park and other tenants of the park. (This clause would later become more significant as the city tried to find a way to renegotiate the contract.) Dean Vanderbilt, Jerry Rucker, and Jerry Bartos were absent.
Gonzalez says he was furious about the contract. “We saved them $4.5 million in land,” he says. “Everybody forgot about that. We not only built the parking lot, we gave it away. We were going to put big trees along Fitzhugh and build a berm [earth] wall. None of those things happened. We [Gonzalez and Ragsdale] got dealt out of the whole thing completely.” Nonetheless, Gonzalez voted for the resolution.
In a separate room, Papert and the park board approved the contract 6-1. Park board member Graham was the lone dissenting vote. “I was incensed by the overly favorable terms of the contract,” Graham says. “But we were pretty well told it was a done deal.”
Though it remained for Knight’s staff to iron out all the details, the deal was done. It took several months, a bombshell from the West Coast, and an act of God for the Star-plex deal to begin to unravel.
FROM THE BEGINNING, MARY ELLEN Degnan was excited about PACE building an amphitheater at Fair Park. As executive director of Friends of Fair Park (FFP), a volunteer support group with about 250 members, Degnan believed the amphitheater would bring up to a half-million visitors to her beloved park each year, visitors who would come back for other events at The Science Place, the Hall of State, the Museum of Natural History, the Music Hall, or the proposed Museum of African-American Culture. And the proposed parking lot would provide safe, secure on-site parking not only for PACE, but for other visitors.
But from the beginning, Degnan was concerned about access to the 6,500 spaces the city provided free of charge to PACE. She knew that parking access was the key to scheduling the park; special events and exhibits could not be successful unless daytime parking was available. Degnan wanted assurances from Knight and Wise that parking would be open to all the tenants in Fair Park, not just PACE.
On January 10, FFP hosted a meeting with PACE and Fair Park officials at their offices in the Magnolia Lounge. Degnan says that city staff and Rodney Eckerman, vicepresident of PACE, assured them that their parking concerns would be addressed. FFP met with PACE repeatedly over nine months; three times, Degnan says, Eckerman agreed to a proposal and later reneged. At one meeting, FFP pointed out that the contract essentially gave PACE veto power over scheduling of the park. “I paid my $10 million,” Eckerman told them. “Why shouldn’t I have veto power?”
In September, after the parties reached a fourth solution to the parking impasse, city attorney Muncy told the group that the agreement was not legally binding and could not be unless the contract was reopened. The frustrated FFP then took its concerns to the City Council.
But in early 1988, warnings about the contract were mainly being sounded by Graham and Rucker. Many dismissed Rucker’s complaints against Strauss as politically motivated, since he was widely assumed to be planning a run for mayor in the next election. At every opportunity, Graham took pot shots at the deal, even voting against an easement required for the amphitheater. He was dismissed also; as owner of the Dallas Sidekicks, he had negotiated a contract with the city for use of Reunion Arena. Everyone knew that Graham felt the city staff had driven an unnecessarily hard bargain because the Sidekicks had nowhere else to play.
Graham says that experience was one of the reasons he felt the PACE contract was terrible for the city: he had personally witnessed a contract negotiation in which the city staff played hardball. “I felt they had taken advantage of the [Sidekicks’] situation,” he says. “I resented it, but I had to respect them. They were looking out for the city’s interest, almost to a fault.” The PACE contract, Graham says, looked as if “both sides were written by the same person.”
But in early 1988, it looked as if the PACE amphitheater was going to be stalled indefinitely. A competing concert promoter, 462 Inc., filed suit against the city on February 9, alleging that public discussion of the contract, which dealt with public lands, had been inadequate, and asking for an injunction preventing PACE from breaking ground. Gonzalez, stewing over what he saw as PACE’S attempts to rip off the city, saw an opportunity. He says he called Jerry Lastelick. 462’s attorney, who sat on the board of First Texas Bank with him. “I asked him if the city handled his client’s concerns, if they would drop the suit,” Gonzalez says. Lastelick agreed.
Gonzalez then contacted the worried PACE official, who had already started advertising for the first concert, and offered to get the 462 lawsuit dropped if they agreed to talk about problems he and Ragsdale had with the contract. Gonzalez claims that Allen Becker agreed to talk to him, as well as pay 462 Inc. $85,000 in attorney’s fees and allow them use of the amphitheater five times a year. The lawsuit was dropped and construction was allowed to proceed, but Al Gonzalez says PACE then went back on its word, refusing to discuss his concerns.
“Do you know what those guys did to me?” Gonzalez says. “They dropped me. These guys are untrustworthy. They have no ethics.”
Brian Becker says he thanked Gonzalez for the offer, but asked him to stay out of the lawsuit. “It was a promoter-industry suit,” Becker says, “it didn’t have anything to do with the [city] contract.” The suit was later settled when PACE agreed to pay 462’s legal fees and guarantee the company five play dates at Starplex. Brian Becker adds that Allen Becker did in fact subsequently meet with Al Gonzalez to discuss concerns about the contract.
Gonzalez says he took his concerns to city manager Knight, but got no response. And on April 8, a day after PACE held a reception for the press at the Hall of State, another bomb dropped. Mayor Strauss announced that she had a conflict of interest and could no longer vote on or discuss matters relating to the amphitheater. She and her husband Ted Strauss owned stock in MCA, and her brother-in-law, Robert Strauss, sat on MCA’s board. Mayor Strauss also told the public she sat on the board of the Kennedy Center with Lew Wasserman, chairman of the board and CEO of MCA, who had given her a $5,000 campaign contribution. But Strauss claimed she had no knowledge of her family’s involvement with MCA, and she denied that any of these ties influenced her support of PACE. Strauss says her husband sold the MCA stock immediately-at a loss-to avoid any appearance of impropriety.
It was the first time MCA’s involvement with the amphitheater was made public. PACE and MCA, weary of competing, had cut a deal to build three amphitheaters across the country, including one in Dallas. Somehow, no one at MCA thought to tell Mayor Strauss about the conflict of interest. Finally, on April 7, Regina Montoya, a Dallas-based attorney for MCA, and Allen Becker called Strauss with the news. Strauss says she asked Becker if PACE had had a deal with MCA on January 27, when the City Council authorized spending $3.5 million to build the parking lot. He told her they did not. Strauss later asked for a letter to that effect, but says he never responded. (On March 23, Eckerman, in an interview with Channel 8’s Charles Duncan aired in September, refused to confirm that PACE and MCA had an agreement.)
This is just one of the many discrepancies in the Starplex story: according to the Deed of Trust filed with the city in August 1988, MCA and PACE did have a deal before the council’s action. Though Brian Becker will say only that MCA and PACE made the deal “in December or January.” the Deed of Trust says that on January 22. the MCA/PACE limited partnership borrowed $22.5 million from MCA to fund three amphitheaters, including the one in Dallas. The pact was first reported in a trade magazine called Pollstar on February’ 22. and it raises more questions: why did Eckerman refuse to confirm MCA’s involvement? Why did Allen Becker wait so long to tell the mayor?
But Strauss wasn’t the only one with apparent conflicts of interest. Andy Stem, who did public relations for both PACE and MCA, is on the board of the Dallas Museum of Natural History, one of the organizations concerned about PACE parking at Fair Park. And PACE’S attorney, Sid Stahl, is vice president of operations on the executive board of the DSO, a former city councilman, and former park board member. Stahl says he left the room when the symphony board discussed the amphitheater, did not vote on those issues, and denies using undue influence with city staff.
But others are not so sure that Stahl’s involvement is so limited or benign. “I think Sidney Stahl wrote that contract and handed it to city staff,” says one person close to the negotiations. “Then the city staff acted hard-nosed about fixing the contract because it would show they screwed up.”
BRIAN BECKER LOOKS LIKE HE WOULD be more at home at a party for Mick Jagger than in a Dallas board room. His dark hair is long and curls over the shoulders of his funky double-breasted suit. His glasses are round tortoise shell, and his shoes are-he looks down-Italian wingtips. Not loafers, he points out. Ever since he and Marc Bension, president of MCA Concerts, were dubbed “West Coast Sharks in Italian Loafers” by a newspaper columnist, Becker has found himself answering questions about his shoes.
Becker defends the deal, pointing out that, according to a city staff economist, the city will make back its capital as well as a profit of $350,000 over forty years, a return on its investment equal to a certificate of deposit at 7 percent interest. In addition, the city has earned about $120,000 for the 1988 season, and the South Dallas Economic Development fund has made about $24,000. Sales tax benefits total about $120,000, according to Brian Becker. And at every concert, Starplex hires 350 part-time employees from the South Dallas community.
During the negotiations, Becker reminds critics, a dentist was murdered at Fair Park. MCA and PACE took a risk, he says, sinking $10 million into a part of the city where few wanted to invest. (He doesn’t point out, however, that MCA/PACE almost immediately recouped a large part of their investment by selling exclusive concessions rights; Coke reportedly paid $2 million, although the company would not confirm or deny this figure. The food concession was sold to Ogden Foods for an undisclosed amount.)
Becker says PACE has tried to negotiate in good faith, but has been confronted by a myriad of interests-not only the Friends of Fair Park, but the 500 Inc.’s Artfest, the State Fair, the Shakespeare Festival (one of the casualties of the amphitheater’s relocation), the park department, the city staff, the council, the mayor, the symphony. If it seems that there has been foot-dragging on PACE’S end, Becker says, it’s in large part due to the conflicting messages they’ve received.
But PACE has also sent some alarming messages. Just days before Starplex was scheduled to open, the amphitheater’s retaining wall collapsed, bringing new charges, including allegations that the facility was poorly constructed and that city building inspectors had given PACE favorable treatment due to pressure from City Hall. (Ed Levine, temporary head of building inspection, says he found no improprieties in the way inspections were handled.)
But the general public did not really seem to care about the controversy over Starplex until they began buying tickets to see their favorite performers and showing up, as they had at StarFest, with their picnic baskets, lawn chairs, wine, and beer. PACE security guards searched purses to find contraband such as bottles of bourbon, candy bars, and cans of hairspray. Becker says a primary reason for the searches was safety; a bottle or a can of hairspray could become a deadly missile. But he admits that another major reason for the searches was to protect PACE’S concession revenues.
It all began to add up; on September 4, the Dallas Times Herald printed the results of a Sound-Off Poll. An overwhelming 93 percent of the 2,469 respondents said they thought the city had gotten a bad deal.
Just when it seemed the controversy couldn’t get any worse, it did. On August 11. Channel 8’s Charles Duncan ran a story on the evening news outlining a federal investigation that tied several alleged organized crime figures (including a man with the moniker Sal “The Swindler” Pisello) to MCA and by extension to Bob Strauss, the mayor, and PACE.
Rucker and Lipscomb called for investigations into MCA’s ties to the mob. At this point the tide began to turn against the council. One reason was the persistence of FFP, who now discovered their fourth agreement with Eckerman was not legally binding. On September 28. the council unanimously voted to renegotiate the contract and appointed Jim Graham as its sole negotiator.
JIM GRAHAM PACES AROUND HIS twelfth-floor office, smoking cigarettes and pouncing on the telephone every time it rings. He’s marshalling his forces, calling every council member to be sure he has their support. Lawyers have been lined up to give their pro bono advice on chinks in the contract. Graham is almost gleeful. At last, he’s going to get a chance to do what he thinks should have been done all along: play a little hardball with the PACE people.
But if he has the responsibility, he says, he also wants the authority. All of the council members have to agree to abide by what he negotiates-no deals on the side, no special interests. He hopes the mistakes made the first time can be avoided.
“I felt at the start that Richard Knight was trying to run the whole railroad and doing a poor job of it.” Graham says. “But I think now they were doing the best they could with the orders they were given. You can’t make a tough business deal and go all out to attract facilities to Dallas. The normal checks and balances were short-cutted. Nobody can be pointed at to say ’It’s your fault.’ “
Though Irving Azoff, president of MCA Music Entertainment Division, agreed in October to renegotiate, Graham says he’s in no hurry. He wants information, detailed data that can be used as leverage. “I believe this can be a neat deal for the city, if it can be made more equitable,” he says.
After months of silence, conciliatory noises were coming from PACE as well. Brian Becker says he’s willing to talk about parking, about picnic baskets or “something special” for the symphony’s concert dates.
Becker says he still doesn’t comprehend why everyone is so upset, or how he became a villain in a business deal he believes is good for all parties. “There’s a hornet’s nest of political currents I don’t understand.” he says in a metaphor about as tangled as the origins of Starplex. But Becker is adamant about one thing.
“The mayor.” he says, “should be the hero. She stole this thing from Carrollton.”
But Strauss, far from being a hero, has been all but tarred and feathered as a result of Starplex. Associates say that she is deeply worried about the effects the debacle will have on her political effectiveness. The conflict of interest issue still lingers; though no one is saying Strauss sought benefits for herself or her family, they are saying she wasn’t very smart, that she should have known that her brother-in-law sat on the MCA board and that she and her husband owned MCA stock.
Though it appears now that she will have no serious challengers in the spring elections, Strauss is the target of a recall petition being circulated by Frank Bodzin, a taxpayers’ advocate who says Knight and Mun-cy are to blame for the PACE contract and argues that the mayor should have sought their resignations. It’s doubtful that Bodzin can get the 69,318 signatures he needs to force a recall election on January 21, the only date open before the May elections. But the fact remains that no Dallas mayor in recent memory has faced a recall petition. Does the Starplex trouble really signify anything about city government in Dallas?
Well, yes and no. When asked to respond to columns by Jim Schutze in the Dallas Times Herald charging that the Starplex debacle illustrates the problems with the weak mayor/strong city manager form of government, Richard Knight grew angry, unusual for a man who keeps his emotions close to the vest. “Frankly, in a word, I think it’s absurd,” Knight says. “I think it’s a racial slap. Other city managers have had other tough issues to deal with. There’s been tough police issues, budget shortfalls. It’s curious that this one calls the city government into question.”
It’s true that under Dallas’s council-manager form of government, there’s no one person to shoulder the blame or take the glory. In Dallas, the mayor is simply one vote of eleven. If Mayor Strauss had opposed the final Starplex contract, what could she have done about it? Nothing, short of persuading a majority to vote along with her.
The current opposition to Starplex seems to come from different camps with widely varying motives. There’s the old oligarchy group, the former power brokers who seem distrustful of those currently running the city government. To them, the Starplex mess points up the ineptitude of the new regime. There are the Starplex ticket-buyers, irritated by the searches and the prohibitions against picnic baskets and water jugs; and the Fair Park tenants, wondering how Starplex will hurt the next Robot Dinosaurs exhibit. There’s the media, perpetrating the provincial myth that some big entertainment sharks with big cigars rode into town and took the hometown hicks for all they were worth. And there are the perennial “aginners.” If the city government did it, there’s got to be something wrong with it.
The truth is that while PACE probably got the best of the city in some ways, such as persuading it to shoulder the cost of maintaining the parking lot, the contract isn’t an overwhelming rip-off of the city of Dallas. Comparing it to deals at Reunion Arena and the Cotton Bowl-venues where the city receives concessions revenues-is pointless. The city owns those buildings; PACE is paying the mortgage on Starplex. Brian Becker complains that those operating problems, such as control of the parking lots, can be easily worked out. During the coming renegotiations, the city will find out whether PACE and MCA truly intend to cooperate.
But the fallout will remain, and in the next five years, we’ll know whether Starplex really is a good deal for the city. After attending an Elton John show at Starplex, will more people see Fair Park as an appealing, safe place to attend concerts, art shows, science exhibits? Park director Wise sees the day when the art deco complex could be not just a collection of buildings rented out during the State Fair, but a mini-Six Flags, where something is happening every day that will bring people from all over the city, providing jobs to South Dallas residents and encouraging others to invest in the area.
Brian Becker shakes his head. He hopes that in five years, all the controversy over the contract will be forgotten. He admits that the deal in Carrollton begins to look better to him all the time; at least PACE would have owned that land and the amphitheater outright. But when a mayor and a city councilman come to call, he says, you listen.
ON THE TINY stage of the Lake-wood Library auditorium sit six members of Dallas’s municipal government, looking a little queasy as about forty very irritated citizens fling questions at them. Though this is one of the town hall meetings held regularly by city councilman Craig Holcomb, the unusual subject this night in late September has brought out more than the usual neighborhood advocates and crime-watch buffs. The subject is Starplex, the new amphitheater at Fair Park.