Council Considers Tax Break For Company Represented by Ron Natinsky's Campaign Treasurer Even Though It Doesn't Need It

Pete_Schenkel_Merten.jpg
Photo by Sam Merten
Pete Schenkel
At tomorrow's meeting, the city council is expected to approve a tax abatement estimated at approximately $1.7 million and an economic grant of $250,000 for Dean Foods. Pete Schenkel, a consultant for Dean who previously served as vice chair of its board, says the nation's largest dairy producer will proceed with its plans to add around $85 million to the tax base regardless of whether the council approves the items.

However, Schenkel stresses Dean's decision to renovate property near Mountain Creek Lake instead of building its new manufacturing plant at a site in Virginia was based on conversations he had with city officials and council members.

"Based on maybe a wink of the eye or something, we felt we would be able to get a tax arrangement with the city," he tells Unfair Park.

Schenkel, a member of the Dallas Citizens Council, is the treasurer for mayoral candidate Ron Natinsky. When asked if he discussed the abatement and grant with Natinsky, who chairs the council's Economic Development Committee, Schenkel says he spoke to "every council member."

But that's not what Natinsky says. He claims the first time he heard about the issue was when it reached his committee for a March 7 briefing. Yet the memo about the briefing was sent March 4, and Natinsky mentioned the investment by Dean at a March 3 press conference outside City Hall.

Natinsky refuses to say whether he supports approval of the items, pointing out that he plans to recuse himself because of his relationship with Schenkel. "I could vote, but I'm not going to," he says.

Karl Zavitkovsky, director of the city's Office of Economic Development, doesn't recall detailed conversations about the tax break and subsidy with anyone outside of city staff. He says Dean didn't commit to the Dallas site until negotiations with the city had concluded.

"Dean said, 'OK, we're pregnant. We're going forward with this,'" he says. "They had a handshake."

Zavitkovsky calls the incentives "a good deal" and claims he had no idea Dean would decide to proceed without them.

"You can always ask the question whether someone would come anyway, and you always wonder if you left something on the table," he says, adding, "I have every reason to believe these negotiations were conducted in good faith."

If approved by the council, Dean would receive a 10-year, 90 percent tax abatement on $40 million worth of equipment and other personal property while paying taxes in full for the land and building valued at $45 million.


Advertisement

My Voice Nation Help
20 comments
Citizen Kim
Citizen Kim

Modern Business, i.e. New Feudalism, at its best. Rick and his henchment in Austin must have tears of joy running down their cheeks.

As for Natinsky, I don't think I'd want someone that just bald face lies to you as my Mayor. Kind of like the guy doing it now.

Wylie H.
Wylie H.

The City's broke, yet it's essentially making a $1.7 million donation to a profitable multi-billion dollar business? What's wrong with that picture?

Joanne R
Joanne R

"Natinsky refuses to say whether he supports approval of the items..."

Natinsky always supports everything his campaign donors want him to support vs. what's good for the City or for the neighborhoods in his district.

Anna
Anna

The rich gets richer and the taxpayers is get...screwed. Natinsky gives away the store and gets caught in another lie....

We need Kunkle..integrity ....doing what is right for the right reason.

Heywood U Buzzoff
Heywood U Buzzoff

Seems that JWP is just a little more forthcoming than Ronnie.

Oak Cliff Townie
Oak Cliff Townie

"Based on maybe a wink of the eye or something, we felt we would be able to get a tax arrangement with the city," he tells Unfair Park."

Was that before or after who ever at the city Was given a Ruffie laced drink...

Stupid is as stupid does
Stupid is as stupid does

I think this is a good deal for the City. What I dislike is the dishonesty and twisting of words. AC, Karl and Ron all knew of this deal for Dean. To suggest you can recall conversation is dishonest. Nothing on the Economic Development Agenda gets on there without AC and Karl talking to Ron. So to suggest otherwise is just stupid.

Their denials make it appear to be a bad deal. Just stand up and say - Yes, we discussed and it is a good deal for the City...........Good gosh

Ron wants to be our next Mayor and our Economic Development Director can't remember talking about a $40.0m incentive deal........If that is the case - do they think the voters are stupid or are they asleep at the wheel..........with taxpayer future dollars?

Jay
Jay

Dean Foods had revenue of over $12 Billion last year.

Natinsky can't recall what he knew and when he knew it.

Zavitkovsky doesn't recall "detailed" conversations.

What's that smell?

That's how 'bidness' in Dallas go.

Anonymous
Anonymous

I mean, the political connections don't make this look good. But at the same point, I complain to companies (like cable) about getting discounts all the time when I have absolutely no intention of leaving them for a competitor. And I got plenty of discounts on the last new car I bought, even though I was buying that car one way or another. I'm not saying the deal they made was good, just that it's not necessarily bad without knowing further details.

yeahIsaidthat
yeahIsaidthat

A 10 year tax abatement on a $40 million pregnancy. Yeah, I agree that someone got f@#*&d royally. Oh yeah, this also happens to be in District 3.

Anonymous
Anonymous

This was pitched as an NPV positive deal from the city's perspective. I've seen the slides on it. If there was a credible threat that the business would go elsewhere, then it's a decent return on investment.

Rawlings looks good to me
Rawlings looks good to me

Or, better yet, Mike Rawlings. At least he knows how to pick a wife.

Rawlings has long career of volunteer activities and giving money to causes.

I checked out Kunkle's volunteer causes, and, well, there are none. He's 60yrs old and never gives back to the community, either in time or money. I guess he's been too busy getting married all those FIVE times. And, I'm also concerned about Kunkle's lack of ethics. He pulled too many fun and games with the crime figures by changing the classifications and ensuring that a whole lot of crime got labeled as "miscellaneous" so he could lower his stats and make himself look good.

RS1963
RS1963

How is this a good deal for the city? If they don't get the tax break, are they not going to move forward? This is just like the Hunt deal: "We are going to do this anyway, but why not give us some of your tax money just for grins?"

I can't see how anyone can justify this.

Anonymous
Anonymous

Saying a company has $12 billion in revenue doesn't really mean anything. The US Government had over $2 trillion in revenue last year. That just means it's big.

Titus Groan
Titus Groan

First, the claim that a former CHIEF OF POLICE doesn't give back to the community because he doesn't participate in walk-on, feel-good volunteer boards is laughably absurd. His whole career has been about serving the community.

Second, the fact that Rawlings is supported by the Park Cities crowd is all you need to know to vote against him. Do the Park Cities really have Dallas' best interests at heart? Of course they don't.

Anonymous
Anonymous

This is why you need honesty from the people in the development office. Dean Foods probably didn't tell Dallas that it never really intended to build in Virgina. Even if it has a good relationship w/ local leaders, it know it can maximize the subsidy by holding the Virginia thing over the City's head.The story is not the subsidy. The story is that no one is willing to fess up to approving it.

Jay
Jay

$12 Billion in revenue doesn't mean anything? Really? Then how about Dean's Gross Profit of $3.01 Billion, or Earnings before EBITDA of $736.53 Million. Yet, Dean management decides to coerce the city out of $1.7 Million of their share of taxes.

http://finance.yahoo.com/q/ks?...

Hasanmary
Hasanmary

That was his JOB and he got PAID!!!

Anonymous
Anonymous

Yes, their profitability (of which I am well aware, though I'm not affiliated w/ them in any way) does mean something, so why wouldn't you just write that in the first place? That's all I was saying.

Dean's management is bound by fiduciary duty to their shareholders. If they knowingly turn down the ability to get tax incentives from Dallas and they don't, or they fail to even try, their shareholders could (and should) sue them. That doesn't mean we should give them the subsidy, but why shouldn't management seek it?

Now Trending

Dallas Concert Tickets

From the Vault

 

General

Loading...