This special edition of D Business analyzes the most important business decision Dallas will make in decades. With the bond election on May 2, voters have the opportunity to make 1998 the most significant year in Dallas history since 1936, when the Texas Centennial put this city on the map.
In a way, voters are investors. Like investors, we want to be prudent with our money, but we also want to put our money to work for us. The current bond election is a case study in measuring an investment opportunity against investment criteria.
The first question is, can we afford to borrow $543.5 million? City Manager John Ware, like his predecessors, has been zealous about protecting the city’s AAA bond rating, and the structure of the bond proposal shows he hasn’t let down his guard. The payback schedule assumes a growth rate of 2 percent in our tax base. Even during the toughest years of the downturn, our growth rate was 2.4 percent, and it has zoomed 9.2 percent from 1996 to 1997. This means no increase in property taxes, and Dallas can be assured of maintaining its AAA rating.
The second question is, do we need to borrow $543.5 million? The answer to that is a resounding yes. Not only do our streets, sewers, parks, and bridges need repairs and improvements, but our libraries and art facilities are in woeful condition. (Our “Arts District” devotes more square footage to parking lots than to the arts.) A performing arts center, for example, is not a frill; it goes to the heart of why people gather in cities in the first place. Combined with the privately funded Nasher Sculpture Garden and the newly announced Crow Collection, a performing arts center will transform our paltry Arts District into one of the wonders of America. That means tourists, and tourists mean dollars.
That’s why we like to analyze questions as matters of investment. But analysis can’t be made operating on a static model. Patterns of behavior change, as DART has proven. Who would have thought that the light rail would prove to be so popular in this car-crazy city? Public investment creates its own dynamic, And nowhere will that be more obvious than with the Trinity.
We endorse the Trinity proposition for two reasons.
First, the Trinity River has remained an intractable problem for Dallas for more than 100 years for the simple reason that it has been too expensive to fix. But The Dallas Plan, under the leadership of Robert Hoffman, came up with a brilliant solution. Instead of viewing the Trinity as merely a flood control problem or the idea of the lakes as a nice recreational amenity. The Dallas Plan envisions redevelopment of the Trinity as a solution to our growing transportation problems. By using the Trinity Parkway as a relief highway for the congested Mixmaster and Canyon, our investment of $246 million can be leveraged into $953 million worth of additional funding from the state and federal governments. That’s an opportunity too good to pass up.
Second, the impact of Trinity redevelopment on our tax base could be dramatic. Currently, commercial and business personal properly make up 65 percent of the tax base-assessed at $31.6 billion. And where is this property located? Downtown and North Dallas, where the businesses are. One-half of this city-the southem half-contributes almost nothing to the bulk of our tax base. If the Trinity redevelopment spurs private investment to the southern sector, as many economists predict it will, we could unleash an entirely new source of wealth for our city, while driving down our dependence on residential property taxes. Simply put, the more business, the bigger the tax base.
There’s one last point to consider, the hardest to quantify in dollar terms but maybe the most important of all, and that’s momentum. Dallas is on a roll. We’re not investing our public money against the tide, trying to shore up a faltering economy. We’re supporting our city while it is strong, leveraging our money to spur even more private development, making it even stronger. And not just on major projects such as the Trinity. Even a performing arts center brings private investment: Developers have three new residential buildings in the works abutting the Arts District, because the Arts District is finally taking shape as a first-class attraction.
The bond propositions are prudent, meet long-standing needs, and set a bold course for our future. Dallas should vote yes.