|COMMENTARY: SCHUTZE, HALLOWEEN and REUNION ARENA By Scott Bennett|
|by Scott Bennett||Sat, Oct 22, 2005, 11:52 AM|
Now, Schutze isn’t perfect: He occasionally takes a bit too much poetic license for a reporter. Worse his conclusions frequently differ from mine (others may not see that as a flaw). A case in point is his story in this week’s Observer (on the stands now). Most of Schutze's story deals with last week’s hearings by a panel of state reps on how the City of Dallas abuses law abiding citizens. It is a perfect Halloween story. It should scare the hell out of you.
Toward the end of the story he sort of switches gears to question the deal just done with Ray Hunt to get his companies to stay in downtown Dallas, and a pending deal that would swap a parking lot Hunt owns for Reunion Arena and the adjacent land. Mr. Schutze allows that he has no idea whether the deals are good or bad. However, he did think her Honor made good points by pointing out that a) the City would have to pay of the remaining $20 million debt on Reunion and b) still pay to demolish it. Schutze asks rhetorically why Hunt shouldn’t pay for improvements as well land (Reunion Arena). The answer is because Reunion Arena is not an improvement it’s an Albatross.
Before tackling Reunion let’s tackle my house. It is a 40-year old Dallas rambler sitting one a third of an acre lot with lots of trees. With reasonable maintenance it should last another 40. It is somewhat “updated” so it should easily be livable for another 40 too. So what is my home worth? Possibly zero.
How can this be? My home is worth what someone is willing to pay me and it is very possible no one would pay me anything for it. No, it doesn’t sit on a toxic waste dump. That’s the problem. It sits on a very nice lot which is worth a good bit. I might well be able to sell the lot for the same amount without the house as I can with the house. That is because whoever buys the lot will likely not want a 40-year old rambler but a brand new house with an upstairs and twice the square footage. But unlike similar homes in Frisco it will have trees.
That is the problem with Reunion. The land has value but the White Elephant sitting on it has none. That is because the Arena lacks what economists call “economic utility.” That means there is nothing you can do with it that will make you money. Unless the Feds make it a full-time disaster shelter it will set empty through eternity – at a cost to the City of $1 million per year for eternity.
So, yes, Ray Hunt wants the land (beats me for what, but this is why he is rich and I am not) but not the anachronism sitting on the lot. It has no economic utility. Just because Dallas owes $20 million on Reunion doesn’t mean its worth $20 million. But then the City will have to pay the $20 million whoever the owner is. Tearing it down probably makes more sense than paying upkeep on a junk pile. Schutze wonders if we couldn't find someone willing to pay to tear it down. If we did, they sure wouldn't have a check that could clear.
The Mayor seems to think Hunt should be a good citizen and pay anyway. Well, if Ray Hunt has $20 million for charitable purposes I would suggest demolishing Reunion would be way down the list of needs.
Yes, I sure wish my lot were worth more with my house on it and I wish Reunion Arena had “economic utility,” and I wish downtown Dallas were what it was when I was a kid. And I wish Schutze was goring sacred cows for a real newspaper.
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