Dallas Police & Fire Pension Fund "Would Look Very Hard At Investing in Dallas Again" After Museum Tower, Administrator Says

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Thumbnail image for museum_towers_3.jpg
It all looks so peaceful and non-shiny in the renderings, doesn't it?
Museum Tower and the Nasher Sculpture Center have been in mediation for months now to try to hammer out the Case of All That Incredibly Reflective Glass. In an interview with The Dallas Morning News today, Nasher architect Renzo Piano harshly criticized Museum Tower's owners and developers, saying that in this situation, "You have an aggressor and you have a victim."

The owner of the $200 million tower is the Dallas Police and Fire Pension System (DPFP). They're not too happy either. Staff at the $3 billion pension system said earlier this week that after the Museum Tower debacle, they thought it would be hard to persuade the pension fund's board of trustees to agree to invest in Dallas-based properties again. (The Nasher complains that light reflecting off the tower is damaging the ambiance of the sculpture garden.)

Richard Tettamant, the administrator of the pension system, sat down for an interview earlier this week. He also brought along a few other people: DPFP's general counsel, their press officer, the chief financial officer and the chief investment strategist. ("That sounds like it wasn't at all uncomfortable for you," my boss remarked cheerily as I staggered back to the office.)

Tettamant wouldn't comment on the Museum Tower situation in much detail, because of the gag order imposed by Tom Luce, the Dallas attorney who's mediating the discussions between the two sides. But someone familiar with the negotiations says that the two sides have essentially been discussing three options: fixes that Museum Tower could make to its own building, fixes the Nasher could make, or some type of structure or barrier that falls between the two buildings.

But Tettamant did say that he thought the incident might affect the board's investment decisions going forward.

"I think the board would look very hard at investing in Dallas again." Which is sad, he added, as Dallas is "a vibrant local economy." (However, in a board meeting earlier this week, one trustee remarked that all things being equal, he'd prefer to invest in Dallas-based properties, which may suggest something of a disagreement between the trustees and staff.)

Tettamant added though that he's "still confident about Museum Tower." He said sales activity on the $1 million condos "declined for about one month" when news of the dispute first became public. After that, he said, "our sales team has been working very hard" again, though he still wouldn't comment on how many units have actually sold.

Rebecca Shaw, the system's communications director, said she would "strongly disagree" with anyone who implies that Museum Tower will become a costly white elephant in the heart of the district.

"Come back in three years," Brian Blake added, the fund's chief investment strategist. "This doesn't happen overnight."

Tettamant also brushed off criticisms from Bloomberg and The New York Times that the system has taken on an unwise amount of risk by placing 51 percent of its assets in alternative investments, include some 24 percent in real estate. He said the fund was "well-diversified," and argued that in this economy, "our allocation is more conservative than just being invested in stocks and bonds."

The critics, he said, "are not fairly assessing our health as a pension fund."

The staff has a realistic view of investing, he added. "You're not going to have 100 percent home runs. We're just trying to hit singles and doubles."


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8 comments
Mike
Mike

I do not understand how the Tower or Pension Board thinks it has any leverage. The Nasher simply has to sue the owners, including the buyers into the property, and you can forget about anyone buying any more units. Who in their right mind would buy a multimillions dollars unit with unknown liability? The lawsuit would likely take years to resolve. Clearly damage has occurred and a judge will not toss the suit. Meanwhile the costs on the Board just rise and rise with no money being received. This situation is not like Ms. Suhm's usual modus operandi a la Firemen's suit on pay. Delay will cost big bucks, money the Pension Fund does not have.

Wylie H.
Wylie H.

Bingo... That would be the equivalent of investing Ford Motor employees' retirement funds in Ford stock. The more I read of Dallas Police and Fire Pension system, the more it becomes painfully clear that they have absolutely no clue as to how to properly manage the Fund-- very scary. As usual, Dallas taxpayers will end up footing the bill for their incompetence.

Larry
Larry

"... would look hard at..."  Ya mean they didn't here??  for that amount of money, I would have looked hard....

C T
C T

It's not just the Nasher Garden. Museum Tower is reflecting strong sunlight toward every building on Lower McKinney and eventually Woodall Rodgers Park. Why you would build a highly reflective building around sensitive areas with nothing blocking the sun or its reflection (i.e. other buildings) is beyond me

Bmarvel
Bmarvel

Brenda, I know it's customary among bloggers to this site to put down D magazine, just as their bloggers feel obligated to trash this one. But just out of curiosity, what was your problem with D magazine's cover story on the Tower?  I read both pieces, learned a lot from both of them, but on the whole thought Rogers' piece more comprehensive.

Parisrec
Parisrec

The nashers got the land by threat and intimidation..I know because i owned 1 acre of the site. Further, his crocodile tears regarding costs were rendered moot by his crazy over-budget construction. Also, he received favorable zoning on a large commercial property in an under the table deal as part of his generosity.

Brenda Marks
Brenda Marks

Agree about the NYTimes being a far superior news source, but the Nasher moving would break my heart and I can't imagine the girls taking that action.  Mr. Nasher was a wonderful man who gave his priceless collection and a brilliantly designed and planned museum to the Arts District as a thank you to the city that had been so good to him.  Dallas had very few, and now has no, residents like Ray.  Almost every time I visited prior to his death I would run into him.  He loved being there, and he loved sharing what he and Patsy spent decades building with everyone.  The City needs to get off its collective disfunctional ass and fix this fiasco pronto.  There is no excuse for this to still be unresolved.

Bmarvel
Bmarvel

Sorry, Beda, but I have some experience here. Many years ago somebody put up a house -- not quite the five story monstrosity you mention, but pretty close -- on the vacant lot next to our house. Their house, wall, garage plunged our back yard into eternal darkness, generated big drainage problems, and so forth. My father took them to court. They were required to reduce the size of the wall and move it back 12 feet. The truth is, you can't put up just any old thing the building code allows in complete contempt and defiance of your neighbors. They can sue, and will -- and win.

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