Wednesday's Planned Construction on Convention Center Hotel Canceled; Bond Issuance Appears Unlikely Before Vote
Since the Dallas City Council approved the developer and operator agreements for the convention center hotel, the Vote No'ers have been eagerly awaiting an upswing in the bond market. A favorable shift would allow the city to land the 5.5 percent interest rate it deems reasonable before asking the council to pull the trigger on approximately $500 million in funding required for the project.
Voters can thank the bond market for the opportunity to endorse or kill Mayor Tom Leppert's convention center hotel project at the polls May 9.
The pro-hotel group has made their intentions clear: Try to get the funding secured and begin construction on the hotel before the May 9 referendum in an attempt to nullify a potential loss at the polls.
In early February, we discussed how the crappy state of the bond market could make the vote relevant by restricting the city from getting a reasonable rate. Approximately two weeks ago, a source close to the project told us the market had rebounded and the city was close to getting the interest rate it's shooting for. However, we just spoke with that same insider, and they told us the market has taken another turn south, and the city has all but abandoned hope regarding its plans to secure funding before the referendum.
Assistant City Manager A.C. Gonzalez would not confirm that the city has concluded the market won't provide the ability to issue the bonds prior to the vote, but he told us developer Jack Matthews will no longer begin construction on the project Wednesday as the council had hoped.
Although Matthews has consistently told us that his construction plans had no bearing on the city's ability to land funding for the project, Gonzalez maintains that the city's position has always been to wait to begin construction until the council approved the bond issuance.
"We have said consistently that we would not proceed until we were in a position to achieve the financial targets that we had briefed from the beginning," Gonzalez tells Unfair Park. "And, with the given situation in the marketplace right now, we're not at that point."