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Dallas mayor says one idea is to use space from convention center rebuild for sports arena

Dallas Mayor Eric Johnson joined several state and local officials on Thursday in urging voters to support a hike in hotel taxes in November to rebuild the downtown convention center and refurbish parts of Fair Park.

The teardown of the current facility could open up about 30 acres of land. And the mayor thinks the area could be a potential landing spot for a new pro sports team based in the city, an idea he’s been publicly backing since May.

“One of the things that I think would be very interesting, would be to bring some form of major professional sport to the downtown area in conjunction with the convention center project,” he said after the news conference in the Cedars neighborhood. “The development that would be spurred by having minor league baseball, major league baseball, major league soccer … There’s a lot of things you can do down there that would be very, very interesting and would spur a lot of development and growth.”

Proposition A, the proposal to increase the hotel occupancy tax the city collects by two percentage points to 15%, is expected to bring in $1.5 billion over 30 years for the convention center rebuild. A new state law allows up to 20% of that — or $300 million — to also go toward renovations for six Fair Park venues, including the Cotton Bowl, Coliseum and the Music Hall.

The new estimated $2 billion convention center, which Johnson said would also be named after former U.S. Sen. Kay Bailey Hutchison, is expected to drive more tourism and jobs to the city, and could lead to the largest investment in Fair Park since it was built in the 1930s, supporters say. The convention center and several venues at Fair Park are in disrepair due to decades of neglect.

The potential isn’t there if Proposition A fails on Nov. 8, Johnson said.

The mayor later noted that a similar funding method was approved by voters in the ‘90s to help pay for American Airlines Center and redevelopment in what is now the Victory Park area.

If done right, Johnson said, he believes the convention center area redevelopment could increase the city’s tax base and lead to the creation of a development that is at least as successful as The Star in Frisco.

“Once people understand the value proposition that we’re offering there, there’ll be people who want to look at moving a team, moving an entertainment venue or what-have-you into that area,” Johnson said.

Not everyone would be in favor of a new sports venue. Dave Brown, American Airlines Center’s chief operating officer and general manager, on Tuesday told Johnson and council members who are part of the mayor’s recently created committee on professional sports recruitment and retention that the city doesn’t need any more.

Johnson in May announced the formation of the council committee and appointed himself as chair to explore ways the city can keep the teams based in the city and attract others.

“As of today, there is no need for a second venue,” Brown said during the committee’s first meeting. “We are one of the most prolific arenas, in terms of programming, in the world. But we still have some capacity left.”

The arena hosts Dallas Mavericks and Dallas Stars games. Brown suggested the WNBA’s Dallas Wings could relocate there or an arena football team could be added.

Hotel occupancy taxes are the convention center’s largest revenue source.

City staff and consultants are in the midst of design and engineering work for the new 2.5-million-square-foot convention center, with construction to begin in 2024 and be completed in 2028.

The current tax rate for Dallas room rentals is 13%. For example, if someone rents a hotel room for $150, then $19.50 goes toward the hotel occupancy tax. The election would seek to raise the rate to 15%.

The state normally gets a cut of all hotel taxes, but state leaders last year decided to allow Dallas to keep all of the taxes collected from hotels within three miles of the convention center for 30 years.

That is expected to raise an estimated $2.2 billion for downtown redevelopment projects in and around the convention center over the next three decades. That money can only be used by Dallas for convention center or arena-related projects.

But this option to revamp some Fair Park venues and the construction contracts that could come with those renovations goes away if the proposition fails, proposition supporters said Thursday.

“We want to make sure that when we look 10 years down the line, we have companies that have been built from this opportunity and they’re still standing today that can create generational wealth for their families,” said Kimberly Shaw, president of the Regional Black Contractors Association. “We want to make sure this is a real opportunity for Black and minority contractors, for businesses at large and that we’re focusing on the workforce development and economic impact that this is going to have.”

Johnson, Hutchison and Shaw as well as several other prominent proposition supporters including state Sen. Royce West, state Rep. Victoria Neave Criado and former Dallas Mayor Tom Leppert were among those calling for voters’ support while atop the roof of the Canvas Hotel in the Cedars. The site overlooks the convention center, less than a mile northwest of the hotel.

The proposition also has the support of Downtown Dallas Inc., the Dallas Citizens Council, The Real Estate Council, VisitDallas, Fair Park First, the Dallas Regional Chamber as well as the Black and Hispanic Dallas chambers of commerce and several other organizations. It also has the backing of a political action committee called the Transforming Dallas Committee.

It’s the second event in as many weeks aimed at revving up support for the election proposition. No organized opposition to the proposition has yet emerged.

There’s no guarantee that Fair Park will get the full 20% of funding over 30 years if the proposition passes in November. While the Dallas City Council in April approved allowing the Cotton Bowl, Coliseum, Music Hall, the Band Shell, Automobile Building and Centennial Building to be eligible for money from the tax increase, the resolution is nonbinding.

The resolution has a clause that orders the city, pending voter approval, to “use good faith efforts to spend 20% of the revenues derived from the new 2% hotel occupancy tax for the Fair Park facilities listed in the proposition.”

Johnson said Thursday that he wasn’t sure how much the current council could bind the actions of future councils, but said the intent of the government body would be that all the money be used.

“That’s what we thought we were passing when we passed that resolution,” Johnson said “That 20% of that money will be used for Fair Park, not ‘may’, ‘will’. That’s the idea.”

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