The city of Denton, the University of North Texas and a private developer have been moving steadily, and sometimes secretly, toward an agreement that will commit roughly $25 million (plus interest) to a new convention center adjoining a private hotel on UNT property.
That’s $25 million in certificates of obligation, mind you, rather than voter-approved revenue bonds — but that’s another story for another day.
This new facility would occupy almost the exact footprint of a similar full-service hotel (with meeting rooms) demolished in 2009.
We’re being told by city officials this convention center has long been part of some grand city “vision” dating back to days when dinosaurs roamed the earth (OK, maybe not that long).
Whenever this idea hatched, most smart folks understand that serious planning rarely happens during those warm and fuzzy “visioning” get-togethers. Ironically, we’re currently updating the Denton 2020 Plan to 2030 so I’ll leave it up to you to decide which of our “grand visions’’ are merely pipe dreams and which ones are serious targets?
Your guess is as good as mine.
Let’s take a quick look inside this proposal and then step back to consider the broader topic of city needs versus city wants.
First, in general terms, the agreement asks too much of Denton taxpayers and little or nothing of UNT. The city (alone) would be required to serve about $25 million in new debt for 25 years with no dedicated revenue stream to support the debt other than proposed new taxes.
The developer would capture 100 percent, (yes, all) operating revenue from both hotel and convention bookings while being given a three- to five-year grace period before the first dollar of convention center rent is due.
Further, the developer would seek tax abatements for UNT educational usage plus city cash credits to offset Denton school district tax.
Finally, the city would even be required to create a special tax increment finance district for the developer (That keyboard clicking you hear in the background are lawyers composing petitions on behalf of existing hotel owners seeking similar favors and tax relief).
What, you ask, would our city possibly hope to gain for all these concessions? Well, uh, we get to show off a new convention center to our neighbor cities — even as we tally accruing deficits against rent.
Moreover, this deal is being promoted as “self-supporting” by city officials, which means we’re basically satisfied if we raise just enough tax revenue to cover debt service. Whoopee!
That “goal” is heavily dependent on an Embassy Suites remaining 75 percent occupied 24/7, 365 days of the year. Hospitality industry experts, however, make it quite clear that convention traffic alone will never keep an upscale hotel fully (75 percent) occupied.
There must be other popular attractions nearby in a “Destination City” to make it all financially viable.
We’re talking golf courses, pro sports venues, upscale shopping, dining, dancing, health spas, vibrant night life, etc. It’s more about adding sales and hotel taxes than property tax (we still miss you, Eagle Point Golf).
So much for the trees. Let’s step back and look at the forest for a moment. What about the convention market, overall, and how did we ever get to this point?
We’re being told there’s “a market” for this convention center (?).
This claim comes mostly from anecdotal accounts of “missed opportunities” by city officials, certain stake holders, the chamber and the Convention and Visitors Bureau (I’m guessing Circuit City and Conn’s also felt there were “opportunities” missed in Denton?).
The real question now should be how many actual opportunities are waiting out there — but a current feasibility or impact study probably won’t happen, according to city officials. Hmmm. ... I wonder why?
So, in the end, this is the familiar “build-it-and-they-will-(or might)-come” proposition. Which is not altogether a bad thing if a city had already done a good job of providing essential services.
Let’s just say if our city leaders can’t find anything better to do with $25 million, then please take a cruise on our city streets sometime or follow me home down Oak Park Drive (just make sure the kids are strapped in and all beverages are tightly covered).
Finally, a confession: Those of us who’ve openly questioned this project from the get-go have made a strategic error.
Initially, we assumed it would simply be a matter of using existing market studies to inject a needed dose of reality.
Just let the data speak for itself since those studies suggested this project is based on overly optimistic projections and probably unwise.
Slowly over time, however, we came to realize this project has little to do with justified city need but everything to do with faddish desire.
Simply put, city officials “need” this convention center for much the same reasoning as a teenager “needs” that newest iPhone or PlayStation — and they’re willing to do anything necessary to land this trophy on behalf of the city, UNT, chamber and CVB bragging rights. Call it a form of metro peer pressure, if you will.
It remains to be seen whether Denton taxpayers are paying enough attention to voice their concerns before this deal goes down.
Historically, Denton residents only get involved if gas wells, transmission lines or football traffic invade their neighborhoods. Pet projects usually slip under the radar. So, will apathy prevail?
Once again, your guess is as good as mine.
DAVID ZOLTNER is a 30-year resident of Denton, a practicing veterinarian and a 2012 City Council candidate.