Unfair Park Exposed!

Wood Ducks

I saw four wood ducks on the way home the other day. If you don’t know wood ducks, they are beautiful birds. They are also unique because they are one of the few ducks that actually nest in trees.

The unique thing, though, is that I saw them in a fifty foot ditch filled with water at the intersection of two six lane highways, Buckner Boulevard and Northwest Highway.

Nature really does abhor a vacuum!

Congratulations to Larry and Ted Hamilton!

Good news on Wednesday for those of us who believe that the City of Dallas needs more high-quality affordable housing. The Dallas City Council approved the application of Larry and Ted Hamilton for tax credits for the Plaza, a former Ramada Hotel located at 1011 S. Akard. This is a project that we started but turned over to the Hamiltons after the neighborhood wouldn’t approve our plan for the building.

I suppose I have slightly mixed feelings. It’s a little like it must feel to see the success of a child you’ve given up for adoption. You feel proud of their success, but a little sad that you can’t really be part of it.

The real sticking point in our plan was the inclusion of fifty units of permanent supportive housing for formerly homeless people. Unfortunately, we still haven’t come up with a convincing way to explain to people what permanent supportive housing is and why it’s good for the community. We try, but most of the time an image of a soup kitchen or a homeless shelter gets out in front of our explanation that all we want to build is an apartment building with enough services to make sure the residents succeed.

Even then, there was an additional ray of hope in the following comments by the President of the Neighborhood Association:
[An agreeable plan] was reached in part because housing for the homeless was removed for the project, said Hamilton and Phillip Robinson, president of the Cedars Neighborhood Association.
“We’re hoping we can add that component,” Robinson said. “We just want to see it up and running,” as in the City Walk at Akard affordable housing project.”
See Roy Appleton’s article in the Dallas Morning News for March 26, 2009: http://www.dallasnews.com/sharedcontent/dws/news/politics/local/stories/032609dnmetplazahotel.4aa68aa.html.
If the neighborhoods are only waiting for proof permanent supportive housing can work in Dallas (it’s already working all over the rest of the country), then by this fall we’ll have CityWalk@Akard up and running so everyone can see for themselves. I only regret the fact that given the lead time to take a permanent supportive housing project from concept to conception is three years, that means no matter how convincing CityWalk@Akard is, we won’t be able to follow up with a new project opening until 2012.
None of that diminishes in any way the tremendous job Larry and Ted Hamilton did in reviving this project and, assuming it makes its way to completion, avoiding saddling Dallas with another vacant building. In the end, homes for low-income working people, some of whom will be on the verge of homelessness, is just about as important as homes for those that are already homeless.

Well done Larry! Well done Ted! Congratulations!

Overheard in the Emergency Room

Yesterday, after I had been examined, given a prescription for pain, advised on how to treat my broken rib and released to go home, I spent some time waiting for my ride home in the waiting room for emergency care at Baylor Hospital. While I was there, an older woman came in with what appeared to be a broken nose. She approached the nurse doing triage and said something. The nurse first replied, “I’m sorry, I can’t understand you.” Then after another try, “I’m a nurse. I don’t know anything about the billing practices.”
The women then took a seat a couple away from me. In a few minutes an older man came in and sat next to her. I would guess it was her husband returning from parking their car. They spoke for a few seconds, and then he approached the nurse. I have to assume that the nurse could better understand him (it’s hard to speak clearly with a broken nose); because the nurse replied to him, “I’m the nurse. I don’t know about billing. I don’t know if Medicare will pay for a second emergency room visit in the same day.”
The old man returned to his seat next to the older woman. They bent their heads together and conferred quietly for a few minutes. Then they rose slowly and shuffled back outside, into the rain.
I can only assume that they decided it was better for the women to deal with her pain on her own, rather than to risk incurring a hospital bill they couldn’t afford.

Accidents and the Dangers of Parking Meters

Every so often something happens in life that shows you can’t control what happens to you. The confluence of two events made that really clear to me this week. First, in an accident that got wide publicity, the actress Natasha Richardson died after a fall on an easy ski hill. Beautiful, rich, and apparently happily married to actor Liam Neeson (nominated for an Oscar for his role in Schindler’s List); but none of that, nor the best of medical care, could save her from dying from a fall that didn’t appear to even hurt her.

Then just last Tuesday I suffered a, fortunately for me, much less serious accident. I managed to walk into a parking meter and break a rib. I had just taken some guests through our CityWalk@Akard project, walked them to their car, then turned back to wave good-bye when I walked directly into a parking meter. It’s the type of injury that seems so silly that you’re embarrassed to tell people how it happened, but it makes me think about how random life can be. One minute you are fine and healthy and working, then a moment’s lack of concentration means you are injured. Given the risks all around us, maybe it’s a wonder all of us aren’t hurt all the time.

And, no, I didn’t try to claim that the parking meter jumped out in front of me.

The City Game

For me, there is only one real American game: basketball. It was invented here (yes, I know, by a Canadian) and we play it better than any where else in the world. I probably played every day for thirty years, and it’s still a great sorrow to me that my age and ruined knees don’t let me play any more. I think the three big sports of the United States mark epochs of our history.

Baseball is the sport of our agrarian past. It’s a sport for small towns. You can play baseball over a wider range of ages and abilities than either football or basketball, so you can find a way to play even when you have a limited population from which to draw. The equipment needed is limited, but you do need plenty of space. It isn’t easily adaptable to urban or suburban spaces. In addition, it’s at heart an individual sport. The batter and the pitcher opposed each other and that one-on-one confrontation is at its heart.

Football is the sport of suburbia; the sport of corporate America. The field itself is tightly bounded and restricted in size. Football became really popular only after World War II when corporate power and the drive to uniformity dominated our country. More than any other sport, football depends on complicated teamwork, and on individuals following orders. With helmets and uniforms on, it’s difficult to tell whether the players are Black or White, young or old, Asian or Hispanic. The ideal team would have all interchangeable players each prepared to execute their assigned role perfectly.

Basketball is the sport of the city, of the world and of our present. It’s cool, urban, takes little space to play and emphasizes the individual. It’s the only one of the big three of American sports to be played all over the world and it’s easy to see why. It’s cheap, you don’t need much equipment and, compared to football, it isn’t dangerous. You can find pick up games going on all over the country where strangers compete against one another. You don’t see that happen with baseball or football.

The sport of our future: Soccer. But that’s another story.

What the Owner Decides

Central Dallas CDC is the owner of CityWalk@Akard, and I’m the Executive Director of Central Dallas CDC, so you might think I would make decisions about everything that we’re doing. You would be wrong.

The role of the owner in a project like this is sort of like the role of the father of the bride (a role I probably need to practice for since I have a twenty-two year old daughter and someday she’ll probably marry). You get to pay for everything but you better not have the delusion that you get to make the choices. It all works out fine for me, I am a lawyer by training and I know quite a bit about financing projects like CityWalk, but I’m far from an expert at construction. All the important decisions are made by the contractor and the architect.

So what kind of things do I get to decide? Of course originally we decided what the project was about and its general parameters, but that was a couple of years ago when we had just begun. Now almost the only things that I get to decide have to do with spending more money.

Do we want to put a mirror or a medicine chest in our bathrooms? A medicine chest will cost more (unless we get a really cheap one, but then it will be a maintenance problem), but it will provide a little extra storage for our tenants.

The cost of any one item isn’t so much, but added together they can destroy your budget.

Can we afford metallic paint for the “buttons” on the outside of the building? Some of the marble panels on the outside need replacing. Can we replace them all? Is it a safety concern? Can we use metallic panels instead? Can we upgrade the light fixtures? Should we repair the current roof drains or put in new ones? Can we use cement rather than asphalt on the parking lot in back? Can we use cement pan stairs rather than metal stairs for the new fire stair?

The questions and choices go on and on. Each one may be small in itself (although a few will be large) but they add up. Worse, from my point of view, any expense that is not already budgeted needs to be approved by the bank and I have to find a source to fund it. So I try to balance all these choices against each other, taking the advice of my architect, general contractor and project manager as to which will add the most value to the development. But in the end, the quality of the end product will depend on the sum of those choices and the ability to fund the hundreds of small improvements that make a building better.

So, someday perhaps, if my daughter asks me to upgrade the menu for the wedding dinner from chicken to steak, I’ll be ready to explain that of course I can—if she’ll just cut the guest list in half.

The Italian Girl in Algiers

Last Saturday I watched the Dallas Opera’s last performance at Fair Park Music Hall. Fifty-two years ago the Dallas Civic Opera (now the Dallas Opera) gave its first performance ever: The Italian Girl in Algiers. This week it ended its run at Fair Park with the same Rossini opera.

Like most opera’s the plot is simple and silly. Isabella (the Italian Girl of the title) crash lands (a plane in the Dallas Opera’s performance; a shipwreck in the original) in Algiers while looking for her lost love. At the same time, the Bey of Algiers, Mustafa, has decided to divorce his wife (he’s bored) and marry an Italian Girl instead. Isabella is seized by his Mustafa’s captain and seems destined to become Mustafa’s new wife. As usual, after many misadventures, Isabella and her lover are reunited and escape and Mustafa decides that he will be happier with his current wife than a new Italian one.

The opera was played for broad comedy, full of slapstick, mugging and pranks going on in the background. The audience laughed repeatedly, which was a good thing because with the exception of the lead, Isabella, most of the singing was only adequate.

More than fifty years ago when The Italian Girl in Algiers was first staged in Dallas, I imagine the performance must have been very different. The director was Franco Zeffirelli, best known for his highly sensual film version of Romeo and Juliet—it caused a sensation when it was released in 1968. The picture here gives you some idea of the production, but if you haven’t seen it then you probably should. I haven’t seen a full review of the 1957 production Zeffirelli production of The Italian Girl in Algiers, but blurbs I’ve seen describe it as “lavish” and “lush”. If it was typical of Zeffirelli’s other work, it was probably highly dramatic and intensely romantic.

I don’t imagine you could do the same production today. The central themes of the opera deal with gender roles and conflict between Christian and Muslim beliefs. If done seriously, then many would find it seriously offensive. The opera isn’t very subtle.

So although the Dallas Opera opened and closed its existence at Fair Park with the same opera, in reality it wasn’t the same opera at all. The music and libretto were the same, but the performances were completely different. Each, perhaps, appropriate to its time.

A final postscript: After the opera and curtain calls were complete, the director asked the audience to join hands and sing Auld Lang Synge as a farewell. It was a highly effective and appropriate way to say good bye.

The “Exchange Provision”: A little inside baseball

A lot of the things I spend my day doing don’t appear in my blog. They are simply too boring to write about. Even the most devoted reader doesn’t want to hear about my conversations with bankers and accountants. But once in awhile something that starts out looking boring is really a big deal, and worth thinking about even if it takes a little extra work. The “Exchange Provision” of the American Recovery and Reinvestment Act (“ARRA”) is one of those things. You remember ARRA, it’s that enormous bill Congress passed and President Obama signed back at the beginning of February. ARRA was supposed to start the economy working again.

One part of the economy that hasn’t been working is the affordable housing market. Most affordable housing is funded by federal tax credits, which the federal government passes out to the states and the states in turn pass them out to affordable housing developers. Affordable housing developers then “sell” them to corporations that want tax breaks (“sell” is in quotes because the transaction is more complicated than a simple sale, but that’s the effect). The money the affordable housing developers get from selling the tax credits provides enough equity to make the project work.

For example, to build CityWalk@Akard, we got a little more than $12 million in tax credits and we sold those tax credits for a little more than $11 million. That gave us a big enough down payment to borrow the rest of the money that we couldn’t raise and begin construction.

But right now you can barely give tax credits away. Hardly any corporation is making a profit; so they don’t pay taxes; so they don’t need our tax credits. New deals aren’t happening and hardly any of the deals awarded tax credits last year are working out.

So, back to ARRA, Congress provided a remedy. States are allowed to trade in tax credits for $.85 on the dollar in real money. That would make a big difference to many of us. Central Dallas CDC has $3.9 million worth of tax credits that we are going to get about $1.9 million in cash for. We sold them for $.50 on the dollar, as opposed to the $.92 we got last year, and even at that price we are the envy of everyone in the business for how good that deal is. If the State of Texas would send those credits back to the federal government for money, then we would get an additional $1.4 million for our project. That money would mean we could offer some additional first rate services to our tenants—mental health care, job training, etc. Or build more housing with the money.

But the State of Texas has taken the position that it can’t trade in those tax credits for money because a couple of years ago when the legislature wrote the rules for tax credits, it didn’t put in any provisions for trading the tax credits for money. I don’t how the Texas legislature was supposed to prepare for a law that didn’t exist yet, but that’s the logic.

That looks like dubious legal thinking to me, but anyway the Texas legislature is in session and could pass whatever laws we need right now! Every other state is going to trade its tax credits for real money. Texans pay federal taxes. Let’s get the same benefit as everyone else; put people to work; make jobs; build affordable housing; get the economy moving!

A friend of mine said this is like trying to save money by going out to eat with a group and ordering a salad while everyone else has steak and drinks wine—and then agreeing to split the bill equally.

We have to pay our share. We should demand equal benefits for Texans!

What Does a Real Estate Developer Do?

Some of you probably know this very well, better than I do, but since I didn’t know when I became one, I thought it might be worth a few words. The short version is that the Developer in a real estate project plays the same role that a Conductor does for an orchestra. The Conductor may not be able to play all the instruments or possibly not any of them well enough to play in a symphony orchestra, but he or she has to keep everyone playing together. Without the Conductor, you’ve probably got a mess.

That’s the same role that a Developer plays in a real estate development. I can’t design the building; that’s for the architect to do. I can’t build it; that’s for the contractors and subcontractors. I can’t draft the legal documents (well, I can some because I am a lawyer); that for the lawyers. I can’t fund the project; that’s for the banks and investors. And on and on.

What I can do, at least on a good day, is make all these people work together.

It gives you a unique overall perspective on a large construction project. Before CityWalk is done, hundreds of people will have worked directly on CityWalk. We will use plumbers and property managers; electricians and architects; bankers, landscape architects, demolition workers, restoration specialists, steelworkers, masons, an unreasonable number of lawyers; project managers (three—mine, the general contractor’s and the architect’s, all with different roles to play). We couldn’t go forward with the contributions of the state and federal governments, the City of Dallas, foundations and individuals that provide us funding.

Even more people will have made indirect contributions. Those include manufacturers of everything from windows to mirrors to roofing. It includes cement manufacturers, plant growers, tile makers, pipe makers, manufacturers of security cameras, furniture, metal studs, paints, and dozens, probably hundreds, of other items that I can’t even name.

I’ve always thought that one of the greatest feelings in the world must be to be a conductor, posed on your stand with the audience hushed, and the baton goes up and when it comes down the orchestra lets loose a glorious ocean of sound. On a really good day, I have at least an inkling of how the conductor feels at that moment.

Next Page »