DALLAS — Dallas County District Judge Craig Smith agreed Monday to a one-week delay in deciding whether the Dallas suburb of Irving can issue up to $200 million of revenue bonds for an entertainment center near Dallas-Fort Worth International Airport.
The delay was sought by lawyers for Irving Taxpayers Opposed to Illegal and Wasteful Use of Tax Money, a group against the proposed project.
Smith said he would like to conclude the case early next week because a longer delay could interfere with the city’s plan to issue some project debt as taxable Build America Bonds.
The stimulus bond program is set to expire at the end of 2010.
Irving officials want to build the entertainment venue next to the bond-financed Irving Convention Center in the Las Colinas residential and commercial development.
The city said without BABs, the project would not be viable.
The bonds would be supported by a 2% hotel occupancy tax and taxes on parking and tickets at the venue, which were approved by voters in 2007. City and state mixed-drink taxes generated at the site would also support the debt.
Irving’s financial plan calls for the hotel tax to provide 21% of the total debt financing, with the parking tax contributing 27%. The other sources include 15% from the ticket tax, 14% from the alcohol tax, and 3% from rent on the facility.
The total cost is set at $250 million, with $50 million coming from Las Colinas Group, the operator.
If the financing is approved by the court, the city hopes to complete the project in 2012.
The City Council voted in late August to seek a ruling from the district judge rather than the Texas attorney general on whether the bonds could be legally issued.
The developers of the proposed project and others joined the case last week in support of Irving.
A group of citizens, led by former Mayor Joe Putnam, joined the case on Friday to challenge the city’s contention that the bonds are legally supported by the available revenue.
Jim Harris, an attorney representing the opponents, said in his opening statements on Monday that Irving cannot use its hotel tax to fund the entertainment center because voters were told in 2007 that the revenues would be used only for the convention center, which will be completed soon.
“Cities can do stupid things,” Harris said at Monday’s hearing. “They just can’t do illegal things.”
Attorneys for the city said Harris was being paid by Anschutz Entertainment Group, which owns a concert venue in nearby Grand Prairie that would compete with the Irving facility. Harris denied the connection, though he has represented Anschutz in other cases.
Irving’s general obligation rating is triple-A by Standard & Poor’s and Moody’s Investors Service, but bonds backed by the hotel tax have been rated A-minus by Standard & Poor’s.
