Bullock Texas State History Museum
Eliminate Domain Subsidies
RECEIVED Mon., March 5, 2007
Dear Editor,
The Domain luxury shopping center will be open for business with much fanfare. Good for them. What the Domain developers won't feature in any press statement is that the Domain is a Trojan horse of enormous tax subsidies whose final cost may reach $65 million.
Through a series of false assumptions and steeply discounted future cash flows, Endeavor Real Estate cloaked the true cost, convincing city and county officials to grant a stunning sum to underwrite a high-end retail development of low-paying jobs. Endeavor’s own projections showed a very profitable development even before the incentives. But now, with 80% of the city’s sales tax collected at the Domain given back to Endeavor and Simon, the giveaway is off the charts. Sixty-five million dollars is a lot of taxpayer money to induce Neiman Marcus and Tiffany & Co. to provide expensive goods to well-to-do customers.
Here is the good news. A lawsuit I filed on the subsidy matter was settled in June 2004, and that settlement agreement stripped away the city subsidy guarantees for the Domain.
The developer and the city agreed in writing that the city may choose to not appropriate funds with no recourse, no damages, and no monetary return.
Most of the city elected officials have moved on since the incentive deal was inked. Our current City Council should give this deal the boot or else the citizens must force the issue by bringing it to vote through petition or yet another lawsuit. Let's welcome the merchants but say goodbye to the subsidies.
The Domain luxury shopping center will be open for business with much fanfare. Good for them. What the Domain developers won't feature in any press statement is that the Domain is a Trojan horse of enormous tax subsidies whose final cost may reach $65 million.
Through a series of false assumptions and steeply discounted future cash flows, Endeavor Real Estate cloaked the true cost, convincing city and county officials to grant a stunning sum to underwrite a high-end retail development of low-paying jobs. Endeavor’s own projections showed a very profitable development even before the incentives. But now, with 80% of the city’s sales tax collected at the Domain given back to Endeavor and Simon, the giveaway is off the charts. Sixty-five million dollars is a lot of taxpayer money to induce Neiman Marcus and Tiffany & Co. to provide expensive goods to well-to-do customers.
Here is the good news. A lawsuit I filed on the subsidy matter was settled in June 2004, and that settlement agreement stripped away the city subsidy guarantees for the Domain.
The developer and the city agreed in writing that the city may choose to not appropriate funds with no recourse, no damages, and no monetary return.
Most of the city elected officials have moved on since the incentive deal was inked. Our current City Council should give this deal the boot or else the citizens must force the issue by bringing it to vote through petition or yet another lawsuit. Let's welcome the merchants but say goodbye to the subsidies.
Brian Rodgers
