The Dallas Cowboys' lease at Texas Stadium expires in 2008. The Cowboys have played there since 1971, when they moved from the Cotton Bowl in Fair Park. Now they want to go back, and do things in a big way. How big? 75,000 seats under a retractable roof, with "open end zones linked to fan decks that could increase capacity to 100,000." And the stadium is just the start of it. The complex will include residential and commercial development, including a "Texas-size hotel featuring waterfront views, and amenities such as spas, golf courses, and convention centers." That's big. This drawing gives one a good idea of the scope of the project.
The cost of the stadium is reported to be $650m. The Cowboys propose paying $225m, and are asking for $425 million in public subsidies from Dallas County. The current proposal finances the subsidy with a 3% increase in the hotel occupancy tax, and a 6% increase in the tax on rental cars. The Cowboys argue that their complex will "drive business to the metroplex," but hotel owners are opposed. The tax hike would raise the rate to 18%, the highest in the country, according to the city's hotel association. Mary Kay Cosmetics says it will move its $115m annual convention elsewhere if the tax hikes go through.
It looks like tough sledding for the Cowboys. Owner Jerry Jones is hoping for a voter referendum on the proposal this fall, citing the urgency of finishing construction before the Texas Stadium lease expires in 2008. He wants an answer from the Dallas County Commission by June 30. The County just yesterday commissioned a study of the project which has little chance of being completed by Jones' deadline.
My take? If the stadium/hotel/commercial/residential complex has economic merit, it will obtain sufficient financing in the marketplace, with little or no public subsidy. If public investment is required, the investment could be financed from revenues directly from economic activity taking place within the complex. Come to think of it, if I were a hotel owner and Jerry Jones was asking for a subsidy to compete with me, financed by a tax on my business, I'd be hopping mad.