The city of Denton is about to enter into a 50-year, $25 million deal for a convention center to be managed by a company founded in 2007. It currently manages seven hotels and has zero experience managing convention centers. This will be on University of North Texas property, exactly where the last hotel and convention center sat.
Many believe a new convention center would be a great status symbol for Denton — but where they put it, and on what terms, makes a difference. Whether Denton needs a 100,000-square-foot convention center is open for debate, but that debate has just not happened and that is the root of the problem with this proposal.
Now we find ourselves at the brink of signing a long-term deal, backed by the good name of our community, with an inexperienced partner, in a process that was about as closed is as legally possible to achieve.
The city will sell $25 million in non-voter approved bonds to build the center. We will own the center and the debt, but it will be on land that we do not own. It will be managed by the inexperienced O’Reilly Hospitality Management, but the contract allows the company to keep all the rental revenue from the center. We own it, they manage it, and they get all the money. What we get for our effort is tax revenue — hopefully enough to pay for the debt.
This is happening at a time when convention attendance is plummeting. There is a glut of convention space as other communities all around us jump on the same bandwagon. As with any other product or service, where there is a glut of supply, profits fall.
This was an unsolicited proposal from O’Reilly Hospitality, and it fits the company’s needs perfectly. The convention center is an amenity for O’Reilly’s hotel.
But it is a fiction to call this a city convention center, because in reality, the hotel and convention center would be the same entity — except that the citizens of Denton will be responsible for part of the debt for O’Reilly’s project. If the city wants to hold a community event there, we have to get in line and rent it like everyone else.
Because of a special tax district they have created, all the taxes generated from this project will be used to pay off the debt for building it. It is just possible that it could break even, if it performs as their generous projections anticipate. However, their projections are based on impossible numbers: an average room rate 2 1/2 times the current Denton average, and an occupancy rate that is 18 perent higher than we currently have. It is a complete gamble based on questionable numbers.
The real pity of all this is that many citizens of Denton have wanted a convention center near the Square and A-train, one that meets our needs, that would serve the community, as well as possibly create some spin-off benefits.
Many of us would have loved the opportunity to weigh in on this, to offer suggestions, hear other good ideas and, together with the council, create something by the community and for the community. The closed nature of these discussions alone should cast some real questions on the entire process.
The council argues that there has been plenty of public input on this, and if we did not weigh in on it, it is our fault. Two council members have argued that since they were for the project, and they had been re-elected, then, therefore, the citizens were for the convention center.
The city cited 22 public meetings about the project since 2011, but this is just not the case. It may have been on the agenda in council work sessions, or in secret executive sessions, but there has only been one public hearing —this is an important distinction — in which citizens were allowed 3 minutes each to speak. This meeting was a month ago, long after policy was made in closed sessions, agreements signed and minds well made up. It was not, in fact, public discussion: It was an obligatory public hearing, the bare minimum required by law.
We know this to be true: that our citizens are capable of having good creative ideas and are practically begging for opportunities to be engaged in the process in a meaningful way. Brainstorming, compromise and consensus lead to a conclusion in which we can all take pride. Create a good idea, have community buy in, and voters will approve bonds for civic improvement.
What we need is a convention center that will serve Denton, and not the other way around. We need a center that actually comes from the community and not one that is being perpetrated upon it. The shame of it is that if we build the wrong convention center now, we’ll never build the right one later.
The only real way to test community support for this is to put it to a vote before selling the bonds. The council can easily and legally put this on the ballot in November and simply let the voters decide. It’s not too much to ask.
MIKE COCHRAN is a former Denton City Council member and a local historian.