Tuesday, June 25, 2024 Jun 25, 2024
84° F Dallas, TX

OUT FRONT Creating Wealth

Why conservatives should support the new arena.

IN THE NATIONAL DEBATE ABOUT the size of government, I’m wholeheartedly on the conservative side. The federal government is too big, too cumbersome, too loaded in favor of special interests, and too much a drag on the national economy. If the Republicans can manage to sweep whole large parts of it into the trash can of history, I’ll help hold the broom. In fact, when Bill Archer talks about abolishing the 1RS, my heart goes pitty-pat. “Abolish the 1RS.” Those are the sexiest words I believe I’ve ever heard.

But what applies to the federal government does not apply to cities. My fellow conservatives sometimes seem to fail to make the distinction, and that leads to tangled thinking when we confront such issues as using public money to build a new arena.

To put the matter simply, the federal government does not create wealth, it consumes it. Cities, on the other hand, create wealth. Modern cities began as commercial enterprises, The first cities, it is true, were nothing more than fortresses and grew according to the successes of their armies. But modern cities have more peaceful origins. They grew up around cathedrals, where peasants would bring their produce on Sundays to sell after mass. Soon weavers and smiths set up stalls to service the peasants, then built rude houses. The modern city was born of buying and selling.

In Anglo-Saxon common law the city was conceived of as a corporation. It received a royal charter to operate as a commercial enterprise. Even today American cities are “incorporated.” This corporate heritage reflects a city’s purpose-to create wealth.

The first duty of any corporation is selfpreservation, The second duty is to give a return to its shareholders. Self-preservation requires investment in the future. Obtaining a decent return requires that the investment pay off”.

We’re as tough as anyone on that question. This magazine criticized DART’s rail plans from the start because we never believed the investment would pay off. We’re as glad as anyone to see trains moving downtown; we aren’t so glad when we think about how much it cost to put them there. Likewise, we have continually pressed for improvement in public education because we want to see a decent return on a public investment. If the public doesn’t begin to get a decent return soon, bulldoze the buildings and let private schools do the job with public vouchers.

The same standard applies to the new arena. In judging the merits of public financing for a privately managed sports facility, there are right questions and wrong questions to ask. The first wrong question to ask is, “Will someone make money off it?” The first right question to ask is, “Will we all make money off it?” If by getting rich himself, someone can add to the overall wealth of this city, then I say go to it. I’m proud of all the people who have made money in Dallas. They have made us one of the wealthiest cities in the world, even after the oil and real estate crashes of the ’80s. And that’s not just the Gucci crowd: Our average per capita income is 25 percent higher than the nation’s.

From an investment standpoint, a new arena should add to that prosperity-and add momentum to the up cycle we’re currently experiencing. Ten years ago downtown Dallas produced 20 percent of the tax revenues for all of Dallas County. Today it produces about 16 percent. That’s a major loss of revenue. I asked a public official what he would pay to get that 4 percent difference back, and he hesitated only a few seconds before saying, “About $200 million.” For the city of Dallas, downtown is an even more important source of revenue. Over the last 10 years its loss in revenue base amounts to $600 million, How much would you pay to get $600 million back?

Dallas as a city exists to create wealth. A new arena properly designed to increase entertainment and living options downtown is worth every d?me we invest in it. An investment today can increase both our tax revenues and our quality of life.

My fellow conservatives are right to keep a sharp eye on the public purse. Wisdom lies in knowing when to open it.