DALLAS — A proposed bond-financed entertainment complex in Irving, Tex,, won't generate sufficient revenue to support the debt on the facility, according to a new financial study by opponents of the project.
The report, developed by two economic analysis firms, was prepared for Irving Taxpayers Opposed to Illegal and Wasteful Use of Tax Money, a group led by former city Mayor Joe Putnam. The group opposes the plan by the Dallas suburb to issue up to $200 million of revenue bonds for an entertainment center near Dallas-Fort Worth International Airport.
The total cost is set at $250 million, with operator the Las Colinas Group providing $50 million.
The city hopes to issue bonds for the project before the end of the year. If that timeline is achieved, the entertainment complex could be operational in 2012.
The opposition's revenue forecast estimated that the Irving entertainment center would host 104 events in the first year of operation, and 94 in the second year. Projected attendance would be almost 323,000 people in the first year of operations and 270,000 in the second.
That is much lower than the city's official forecast of 280 events a year with total attendance of more than one million people.
Opponents said the lower number of events and attendees means the city's annual revenue projections are almost $11.5 million too high.
"The promoters of the Las Colinas Entertainment Center have led the city of Irving to expect a facility that outperforms any competitive concert hall in the world," the study's authors said in the report summary,
"They project more performance events and almost 200,000 more attendees than New York's Radio City Music Hall has or sees in a year."
However, Irving Mayor Herbert Gears stood by the city's forecast. He said the center would have a flexible floor plan that would allow it to be used for many events that cannot now be accommodated by existing facilities in the area.
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 mixed-drink tax, and 3% from rent on the facility.
City officials said the complex would include a cluster of restaurants and a pedestrian walkway anchored by a large concert hall.
It would be located adjacent to the new, bond-financed Irving Convention Center in the Las Colinas residential and commercial development and within walking distance of Dallas Area Rapid Transit's planned light-rail station.
Irving's general obligation rating is triple-A from Standard & Poor's and Moody's Investors Service, but convention center bonds backed by the hotel tax have been rated A-minus by Standard & Poor's, with no rating from Moody's.