Devil’s in the details
So, it’s going to be a full-court press by city officials who still want a conference center so badly, they’re willing to swallow a high-risk, low-return proposal from an upstart developer with an unproven track record?
Granted, convention centers, in general, can be a smart move for destination cities with lots to offer conventioneers and their families. But as the old saying goes, the devil’s in the details and this University of North Texas-city of Denton-O’Reilly Hospitality Management proposal is the classic example.
The city would sell certificates of obligation and assume another $25 million in debt ($50 million after 25 years of interest). For what?
Our “payback” is nothing more than the possibility of having the developer guarantee our bond payments (beginning in the fifth year) after all new taxes are applied.
I choose the word “possibility” because there are so many assumptions layered on assumptions in this proposal that all stars will have to align for it to work out.
Meanwhile, UNT makes off like a bandit. Not only does the university score two new land leases from tax-exempt property, but it also banks a percentage of total revenue from both convention center and hotel activity for 25 years. Ka-ching.
One can only hope that the proposed feasibility period will expose these hazards and the alarm bells will sound before a final agreement is struck. So far, the city has been unwilling to renegotiate or take action to repair this agreement — while council members float softball questions about timelines and Hoolihan’s menus. Stay tuned.