|By Rudolph Bush / The Dallas Morning
News, The Dallas Morning NewsMcClatchy-Tribune Regional News
Jun. 16, 2009--Dallas City Hall took a significant step toward building a convention hotel Monday when a City Council committee recommended that the city issue $514 million in bonds to fund the project's construction and other costs.
The unanimous recommendation of the council's economic development committee is scheduled for a vote before the full council in a special meeting Friday.
The council is expected to approve the bond issue plan with little, if any, opposition.
Assistant City Manager A.C. Gonzalez, who has headed up the hotel project, told council members Monday that Dallas is getting the project under way at the right time.
"If there was a time to go into having a new building, it would not have been a year ago," he said.
Gonzalez said the city stands to realize tens of millions of dollars in savings on the project vs. an earlier start date because current economic conditions have lowered a number of costs, including materials, for construction of the hotel.
Yet the same struggling economy that has reduced costs on the hotel has also strapped City Hall to a $190 million deficit.
Concerns about the hotel's ability to pay for itself as city officials have promised played out in a May referendum that saw pro-hotel voters defeat opponents by a slim margin.
On Monday, council members did not seem concerned that economic conditions have any bearing on the long-term prospects of a hotel that will require $514 million in debt, including $346 million for construction and millions more for reserve funds and other contingencies.
They seemed satisfied that a series of reserve accounts funded through the bond issue and through projected hotel revenues will insulate taxpayers from any costs associated with the debt.
"You strengthened our reserve requirements, which give additional protections to the citizens of Dallas," council member Jerry Allen told Gonzalez.
Council members seemed more focused on what the city can reap from the hotel, with several suggesting it can be sold at a profit long before the anticipated retirement of the debt.
"We're probably not going to have these bonds at the end of 30 years," council member Ron Natinsky said.
Such projections rest on assumptions of an improved economy, something the hotel's backers predict will happen by the time the doors open or shortly thereafter.
The hotel's opening could happen as soon as late 2011 if the bonds are sold within weeks rather than months.
The hotel's construction schedule is set for 28 months.
With the council's approval Friday, the bonds can be sold "at a moment's notice," Gonzalez said.
That, he predicted, will prove a boon to Dallas' convention business.
"There has already been a very strong positive reaction in the marketplace to the fact that now Dallas is getting where everybody else has been and having a hotel that has been needed for so long," he said.
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