DALLAS - A group of business and city officials recommended yesterday that Dallas consider building a $185 million downtown sports and entertainment project that would replace the outdated Reunion Arena and help prevent two professional sports teams from relocating to the suburbs.
"We do have a sense of urgency," city manager John Ware told Dallas council members at a briefing yesterday. "The community and the city needs to act and needs to act aggressively to preserve our current situation."
Emphasizing that sports are big business, Ware recommended that the council approve spending $550,000 to study project feasibility for the arena to provide a new home for the Dallas Mavericks basketball team and the Dallas Stars hockey team.
The teams have criticized the limited 17,000 seats at Reunion Arena, which is considered too small and lacking in luxury suites and club seating to compete with other similar facilities being built nationwide. As a result, suburbs from Irving to Lewisville are offering to build arenas to grab the business from Dallas.
Faced with that pressure and the loss of some of the $49.1 million that Reunion Arena contributes to the city's economy each year, a group of business and civic leaders has proposed that a new arena with more than 20,000 seats, including 144 luxury suites and 3,000 club seats, be built.
At the urging of the Dallas Sports and Entertainment Assessment Group, the city council is likely to approve the feasibility study when it meets next Wednesday, sources said.
Much support was indicated at the city council briefing, although some council members were concerned that city general obligation bonds not be diverted from other projects.
"In this kind of economy, there are two kinds of cities - the quick and the dead," said member Larry Duncan, who supported the arena. "We have to fight like hell to keep what we have."
However, other council members warned that voters probably wouldn't approve large amounts of tax-supported debt.
"A massive amount of general obligation bond capacity won't be supported," said Greg McDaniel, who said the price tag for the arena was estimated by some to be near $220 million if land and infrastructure costs were included.
In its preliminary report, the Dallas assessment group indicated that building a new arena would allow the city to compete more effectively with the Dallas suburbs and other municipalities nationwide.
Suites and club suites are traditionally big revenue producers.
"Community leaders must be prepared to act in a timely, aggressive fashion when these community assets are threatened," the report said. "In this area, there are several suburban communities where new facilities could be built for relocation of the Mavericks and the Stars."
The group recommended a site be chosen from a field of six locations downtown and also suggested a timetable. Under the proposed schedule, the feasibility study would be completed in October, the financing plan in December, and completion of the project by July 1997.
Financing options outlined in the report include general obligation bonds and revenue bonds, as well as sales tax notes and lease purchase agreements.
Although no determination has been made yet, Ware said the city administration would prefer not to use general obligation bonds and is gravitating toward a public-private venture that could involve lease purchase or sales tax financing. "We also have infrastructure needs, and we don't want to use our bonding capacity," he said.
This month, the city is scheduled to sell about $100 million in general obligation bonds for streets, sewers, and other projects, using the remaining authorization approved by voters in 1985.
John Crawford, the chairman for the needs assessment committee and a Dallas businessman, said, "I would be amazed if we went with general obligation bonds... There is a lot of emphasis on a public and private partnership."
He said some of the financing details will be contingent on negotiations with the Stars and the Mavericks on lease agreements and other items.
Ben Brooks, a Dallas bond attorney with Hutchison Boyle Brooks & Fisher, said it was premature to predict the types of financing structures that could be used. "There are so many options," he said.
Meantime, controversy has emerged over lease agreements. The Stars' president, Jim Lites, was quoted in the Dallas Morning News as saying that his team will not sign a lease until the city assures them they have a new home. Councilman Chris Luna said perhaps the city should not "negotiate with terrorists."
