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Beth Van Duyne ARK presentation

Beth Van Duyne ARK presentation

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Published by Avi Selk
The mayor's presentation to the Holmes Breakfast criticizing the ARK plan on 2013-07-24
The mayor's presentation to the Holmes Breakfast criticizing the ARK plan on 2013-07-24

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Published by: Avi Selk on Jul 25, 2013
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07/31/2013

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Current!State!of!Las!Colinas! Entertainment!Venue!!

Mayor!Beth!Van!Duyne! Irving,!Texas!

Presented!by!

•  According!to!current!development!agreement,!Ark!Group! would!receive:!
–  –  –  –  –  –  –  –  $24M!for!parking!garage!(excess?)! $20M!for!plaza! 40!years!Brimer!(currently!generates!$12,000/day!or!$4.2M/yr)! Parking!taxes!and!fees:!term!of!lease!(could!be!over!$100M)! State!Sales:!10!yrs?!! City!Sales!Tax:!10!yrs?!(MOU!states!40!yrs)! Mixed!Beverage!Tax:!maximum!allowed!(MOU!states!40!yrs)! $900,000/yr!for!maintenance!

•  Ark!would!pay!$1!lease/yr!first!30!years!up!to!$1.5M/yr! 2103Y2112!(Texas!Stadium!was!$1.5M/yr)! •  City’s!por[on!of!payment!and!lost!revenues!could!be!well!over! $300M!for!$148.5M!project!
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•  •  •  •  • 

Lack!of!prepara[on!! No!RFQ,!no!compe[[on! No!cost/benefit!analysis! No!market!comparisons! Scant!informa[on!on!developer! qualifica[ons!available!to!council!(First! Southwest!reviewed!financials)!!

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•  City!investment?! •  Away!from!downtown!area!in!warehouse! district! •  City!generates!sales!tax!and!other! revenues! •  Majority!of!land!is!surface!parking! •  $250M!project?!

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Is this the vision of the entertainment center?

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•  Council!members!undermining! nego[a[ons! •  Forcing!items!on!agenda!before!they’re! complete! •  Making!deals!outside!of!open!mee[ngs! •  Agreeing!to!terms!our!lawyers!advise! against! !!!!!!!!!!!!!!!!!!!!!!!!!!!!…any!of!this!sound!familiar?!
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$1B!Dart!Line! $140M!Conven[on!Center! $9M!Conven[on!Center!Hotel! $6M!Lake!Carolyn!pavilion! $44M!in!land!acquisi[on! $10Ms!for!property!for!114!expansion,!Campion! Trails,!!street!improvements,!etc.! •  This!doesn’t!include!DCURD’s!investment!and! $290M!in!debt!or!Las!Colinas!Associa[on’s! con[nued!investment!and!maintenance!! •  •  •  •  •  • 

!

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Omni Mandalay Hotel

Williams Square DART LRT Stations

Las Colinas Marriott

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The Mustangs of Las Colinas Mandalay Canal

Irving/Las Colinas Convention Center Lake Carolyn with APT

This is NOT a blighted area!

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•  No!sales!Tax!(this!is!how!Arlington!is!repaying!its! investment)! •  No!property!taxes! •  No!parking!taxes! •  No!parking!fees! •  No!mixed!beverage!sales!tax! •  “Synergies”?!–!where!is!the!market!data!to! substan[ate!this!claim?!! •  Costs!to!city!not!iden[fied!Y!Police,!fire,!sewer,! water,!garbage,!security?! !!…In!other!words,!No!ROI!for!Irving!but!plenty!of!costs!
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•  Texas!Stadium!brought!100,000s!of!people! into!Irving,!but!Irving!saw!very!lijle!hard!ROI! •  No!no[ceable!increase!in!restaurant,!retail!or! hotel!revenues!during!events! •  Arlington!making!money!to!pay!back!its! investment!in!sales!tax!–!we!don’t!have!that! in!current!development!agreement! •  Irving!is!making!more!now!on!stadium! property!than!it!did!when!Cowboys!played! here!
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•  City!has!no!discre[on!for!selec[on!for!subY tenants!(no!criteria!at!all)! •  Performance!standards!weak!–!50,000!sq!k!of! restaurants,!book!100!music!events!with! 100,000!annual!tkt!sales! •  List!of!iden[fied!promoters!includes!developer! •  Required!to!be!open!only!an!average!of!30! hours/week!–!how!any!full![me!jobs??! •  Company!not!required!to!contribute!50%!of! costs!!
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•  Audit!clause!only!aker!comple[on!of!project! (sound!familiar?)! •  Lejer!of!credit!insufficient!for!developer’s! por[on!(“lejer!of!credit!is!only!worth!the!paper! it’s!printed!on”?)!! •  Ability!to!build!100,000!sq!k!of!tax!free!hotel/ office!space?!Why!is!this!included!in!this! project?! •  New!company,!Ark!of!Irving,!has!no!assets!and! no!personal!guarantees!
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•  Goal!of!TIF!is!to!incen[vize!developers!to!build!projects! that!help!generate!tax!revenue!–!none!are!generated!by! this!project! •  How!are!we!to!fund!add’l!projects?!–!!
–  –  –  –  –  –  –  –  –  Improvements!to!lake!including!water!features! Connec[vity!to!Campion!Trails! Enhancements!to!DART!sta[ons! O’Connor!and!Las!Colinas!Blvd!repair! Bike!lanes!and!landscaping!as!recommended!in!Sasaki!Group!study! Incen[ves!to!mul[Yfamily!projects!for!necessary!improvements!! Open!spaces!and!pocket!parks!in!Urban!Center! North!Shores!! Water!Street!

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•  56K!+/Y!sq.!k.! restaurant/retail! space! •  350!+/Y! residen[al!units! •  1!ac.!open!space! plaza! •  New!APT!Sta[on!

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•  27.7!acres! •  Adjacent!to!LRT!sta[on! and!Conven[on!Center! •  Lake!Carolyn!frontage! •  Five!4Ystory!buildings! •  Up!to!150K!sq.!k.!! retail/restaurant!space! •  Bou[que!hotel!and! shops!
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•  •  •  •  • 

114!and!MacArthur! 635!and!MacArthur! Water!Street!(60,000!sq!k!retail)!! North!Shores!(up!to!150,000!sq!k!retail)! Alamo!Drak!House!in!Richardson!

!!!!!!!!!!!!!!…how!much!did!the!city!contribute?!
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•  Same!path!as!LCG!(no!leverage!once!DA!signed)! •  Poten[al!li[ga[on!exposure!if!BBB!involved!in! future! •  Can’t!iden[fy!risks!if!ignorant!of!sejlement! •  AG!won’t!sanc[on!bond!sale!during!li[ga[on! •  Other!lawsuits!wai[ng!to!happen!(Jim!Harris?)! •  99!year!lease!not!allowed!by!Charter!–! “Renewal!at!ARK’s!op[on!with!council!ac[on!to! ra[fy!renewal!terms”! •  Audit!provision!mandated!by!current!charter! amendment! 19!

•  Oct/Nov!Y!Case!most!likely!dismissed!by!5th!District!Court! of!Appeals! •  Oct/Nov!–!if!not!dismissed!outright,!would!be!set!for! court!date!approximately!9Y12!months!later!! •  Ajorney’s!Advice!–!“In!my!30!years!of!li[ga[on! experience,!I!have!never!seen!a!more!meritless!case!than! this!from!LCG.”!!! •  Lawsuit!best!opportunity!for!clean!break! •  Paying!a!developer!who!already!took!$24M!and!giving! them!$4M!more!senseless!! •  Cheapest!probable!outcome! •  Follow!advice!of!ajorneys!(that’s!what!we!pay!them!for)!
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•  •  •  •  •  •  •  •  • 

Reassigning!MOU!to!Ark!Group!of!Irving! Development!Agreement! Amended!and!Restated!MOU! Sejlement!Agreement!with!LCG! Sejlement!Agreements!with!BBB,!TDI,!Bobby! Page,!et!al! Reimbursement!and!Indemnity!Agreement! Amended!TIF!Reimbursement!Policy!! Lease!Agreement!–!TBD(!)! ED!Incen[ve!Agreement!Y!TBD!
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•  No!lease!agreement! •  No!sejlement!agreement! •  $4M!in!escrow!Y!what!happens!if!bonds! can’t!be!sold!through!no!fault!of!the!city?! Ark!walks!away!with!$4M?! •  Economic!Development!Incen[ve! Agreement!

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