Palladium: There's No More to Give

Palladium has made all the compromise that it intends to make, Ken Wong, Palladium partner, tells GlobeSt.com. "We made a hefty compromise to get a vote scheduled," he says. Anything more strips the viability from the 20-acre, mixed-use plan. "If the vote goes against us, we won't have a feasible project and we will have to move on to another opportunity." He's not looking elsewhere as yet despite Tom Hicks' threatened pullout, Mayor Laura Miller's insistence for a pro forma and a divided council.

Wong says preliminary feedback about the pending vote is positive. "I feel encouraged, but I don't want to take anything for granted," he elaborates.

As for the business savvy Tom Hicks, his offer to sell his minority interest in the Palladium plan arose from a concern "that his name might be getting in the way and people were not reviewing our proposal on its merit," Wong says. He won't say if Palladium has, in fact, offered to buy out Hicks, but does say "we are maintaining dialogue. My preference is that he stays in."

Wong's focus is on making the deal happen. That starts with the May 8 vote. The upshot is "yes" means pre-leasing will start and construction begins in 2003. "No" has Palladium packing its bags.

Wong believes altering a $25-million repayment for infrastructure costs for the $420-million American Airlines Center to Dallas Stars' owner Hicks, Mavericks' owner Mark Cuban and developer Ross Perot Jr. was the sweetener needed to sway a council majority. Certainly, delaying repayment keeps the incentive in place for the high-flying trio to develop the 40-acre balance. The funding came with a 6% interest on the unpaid balance. Thus, Wong concedes, the trio might never be fully repaid and certainly not before the 2018 contract expiration date.

Palladium further leveraged its deal before council by shaving its infrastructure repayment from $43 million to $34 million and knocking off 10 years on a 30-year Tax Incentive Financing proposal. Repayment comes solely from property tax revenue. But it's still a no-risk plan for the city, with no upfront investment from the public trough, insists Wong, who has rallied the backing of a multi-national cross-section of civic and political organizations. Opponents too have rallied their fair share of support, with a main criticism being that Palladium will take too much of the revenue pie with its plan.

Victory's first phase calls for Dallas' first W Hotel, 500,000 sf of retail, 600 multifamily units and a 350,000-sf office building. Fiscal analyses conclude the project would generate $6.5 million annually in sales and hotel tax revenues. A green light will trigger 10,000 construction jobs and 5,000 permanent jobs. Equity financing for retail, residential and the W Hotel has been secured through CUIP/MacFarlane, pension fund advisers to the CalPERS, the nation's largest pension fund.