DALLAS-Dallas attorney Joe Geary has his sights set on “Victory” in a 10-minute challenge that, if successful, could force a re-vote on a $43-million incentive package for New York City-based Palladium. The Tax Increment Financing package has divided Dallas as proponents espouse the perks of a $600-million, mixed-use project and opponents fault the drain from its “sphere of influence” on other revitalization efforts in the CBD neighborhood.
Geary has filed a lawsuit in the 14th District Court against the City of Dallas on behalf of Central Forest S/C Partners Ltd., a quartet comprised of commercial property owners Vaughn Miller and Homer Rader and two residential owners, whose names are not being made public. Geary is using the state's Open Meeting Act and its 72-hour advance notice requirement as the basis for the lawsuit. He dropped a challenge to the state's Open Records Act to get a copy of project financials that Palladium classifies as proprietary.
The plaintiffs allege the meeting notice was posted May 3 at 12:10 p.m. for a noon session May 6. And that, says Geary, means the TIF board met illegally which, if true, nullifies any action taken at the meeting, specifically a recommendation to council to OK the district for the 20-acre project. “It's a real question of whether the city has improperly approved this thing or not,” Geary tells GlobeSt.com.
The city must file its response by July 1. A hearing date will be scheduled after the city's response is in the court's hands and the discovery process is completed. The city manager's office is taking the official stance that it doesn't comment on pending litigation. The mayor's office did not return calls by press time, but it's no secret around town that Mayor Laura Miller opposed the TIF in the first place.
A decision for the plaintiffs could force a re-vote. “We might get the same thing on the next go-around, but they will have done it correctly,” says Geary, a councilman from 1959-61. The challengers are betting the outcome will be different, particularly if the makeup of council changes as a result of an electoral challenge before the courts.
The Palladium push for a Victory TIF has been mired in dissension. Prior to the vote, the developer said it would exit Dallas if the incentive package was voted down. Meanwhile, CBD property owners came out strong against additional incentives for the infill site being spit-shined and polished for development by Ross Perot Jr., Tom Hicks and his Southwest Sports Realty Group and Palladium.
The extra money, say the proponents, will finish the infrastructure in the project area surrounding American Airlines Center, a sports and entertainment complex that got its seed money in a $125-million TIF district. The opposition camp chides the development consortium for coming back to the public trough after promising never to return in exchange for the initial $125 million–a pledge that didn't include Palladium at the time it was made. For previous story, clickhere
Palladium was pressured, mainly by the mayor, to deliver a pro forma and project financials before a vote was taken. Some claimed the package's arrival didn't allow adequate review time. Also under fire is a clause that states Palladium isn't bound by the information contained in its pro forma presented to the city's consultant. “If I went to make a $43-million loan and gave a prospectus that I said I wasn't bound by, do you think I'd get the loan,” Geary queries. “We have to raise the technical issues because information is not forthcoming.” And that information is considered a “need to know” by Victory's commercial neighbors. Miller owns a shopping center close to Victory while Rader's buildings are positioned in the CBD, both inside the “sphere of influence.
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