Michael Hogue
“I’m not dead,” cried the hapless plague victim in the classic comedy film Monty Python and the Holy Grail, as he struggles to avoid the death cart. Downtown Dallas is similarly trying to evade the Grim Reaper. Downtown Dallas Inc. CEO Jennifer Scripps told me, “The rumor of our death is greatly exaggerated.”
Those rumors were reinforced recently by James Dondero, a hedge fund manager, who has offices at the Crescent in Uptown. He must keep a spyglass handy for observing downton because he absurdly told the Dallas Business Journal, “I mean, it’s almost like an armed camp down there at 4 or 5 in the afternoon.”
Dondero was sounding the alarm that AT&T may move its corporate headquarters out of downtown. That’s no secret. I don’t doubt his comment, “They don’t view it as a safe, happy place to work.”
AT&T is staying mostly quiet, despite the efforts of many business reporters to find out just how imminent a move may be. I wish AT&T would be public about its standard for “safe and happy” because Scripps and other downtown leaders are committed to cleaning up downtown — literally.
Downtown leadership is facing the dire situation head-on. For the first time in years, the Dallas city manager is interested in getting involved. The last guy refused. But Kimberly Bizor Tolbert lives downtown. It’s not just her job, it’s her neighborhood.
Opinion
“The homeless problem is our immediate concern, and we’ve made huge strides on that front,” Scripps said. “We cannot cede downtown to the homeless.”
It’s an aggressive and welcome stance. She believes the perception of downtown is shaped by how people feel about the homeless. I believe it affects how people see all of Dallas.
According to Scripps, 60% of first-time visitors to Dallas go downtown. Some of those visitors are people considering moving to Dallas or sending their children to school here. At the very least, they are forming an opinion about our fair burg while having a good time. Currently, I’m concerned that they think it stinks. This impacts the entire perception of North Texas, making downtown Dallas important for Frisco, Forney and Fort Worth.
Violent crime is down slightly in the area the last few years, according to police data, but there is plenty of room for improvement. The pandemic and social upheaval set downtown on a bad trajectory, and previous city management ignored what was happening. The years when T.C. Broadnax served as city manager were terrible for downtown. Lawlessness and homelessness competed for top billing.
In 2024, DDI hired Boston Consulting Group (BCG) to assess the situation. The findings were serious and impact the future of the entire city — not just downtown.
BCG quoted a corporate stakeholder as saying, “AT&T would consider relocating if public safety downtown is not addressed.” It also reported a loss of $4 million in airline contracts for downtown hotel bookings because of homelessness concerns. These room nights have moved to places like Fort Worth, where walking through downtown feels safe and festive.
The study warned downtown also has seen “higher growth in crime than neighboring areas.” In downtown, violent crime was up 42%, compared to a citywide 14% reduction. (Reporters from this newspaper reached out to BCG to ask why its statistics are so different than police data, but didn’t get an answer.)
BCG determined, “Over the last few years, growth in crime and disorder Downtown has coincided with loss in value of Downtown properties and slowed residential growth.”
Everyone sort of knows that anecdotally, but when you put numbers to it, then it gets bad — real bad.
The consultants warned, “If this trend continues, cascading effects will further and rapidly erode value, affecting the City of Dallas far beyond its Downtown core.” We cannot insulate from this in Preston Hollow or Kessler Park or way up north in Bent Tree. Dallas citizens are going to pay for the demise of downtown out of their own pockets, if it doesn’t improve.
According to the study, downtown Dallas makes up almost 5% of the city’s total property value. Of that number, just 35 properties in downtown make up half. BCG noted that, among major cities, only Boston is more reliant on commercial property values for its tax base.
“We estimate an AT&T relocation could cause a 30% decrease in property values,” BCG warned, costing downtown an estimated $2.7 billion in overall value. That would result in a loss of $18 million in annual property tax revenue for the city; even more for the school district. It impacts everything.
You think this year’s budget process was tough? If AT&T leaves, City Hall will be telling citizens it’s time to dig into their pocketbook and pay more, while also reducing services.
Here’s my favorite part: BCG added fuel to my Daltroit warnings. They noted that when GM and Chrysler departed downtown Detroit, there was a 50% decline in property values. This should scare you. Even if you live in the suburbs, the decline of downtown Dallas would be a blow to perception of North Texas.
BCG also pointed out that while the downtown is less than 1% of the city’s land area, it is home to 14% of its jobs. The study noted, “In 2023, 60% of jobs downtown did not require a Bachelor’s degree, making Downtown Dallas a crucial source of accessible jobs for all skill levels.”
BCG estimated that a reduction in violent crime of 10% would lead to a savings of $500,000 in law enforcement and legal services. We need to have more people thinking about investing in law enforcement downtown as an investment, not an expense.
If you are downtown, you know it’s working. Things are getting better, and the city and DDI are no longer allowing homeless persons to refuse services.
BCG speculated that downtown has potential to generate $300 million in direct revenue over five years by investing in public safety.
Beyond the potential for growth, there’s the worry of existing assets slumping. There are 9,600 hotel rooms downtown, Scripps said. Those need protecting. Dallas relies on hotel occupancy tax to pay a lot of bills.
The city is reaching a point where it has to make significant investments across the board. The only way the city can afford to do this is to grow the tax base. For too long we’ve looked at investments as expenses, while, perhaps absurdly, taking on more debt.
In 10 years, downtown will be a different place with a new Dallas College, a new convention center and, hopefully, pro sports teams. Downtown is worth investing in. Dallas is making progress in luring young professionals to the city. They want an urban lifestyle. Sure, they may get married and move to the suburbs, but that’s a separate problem.
Downtown is a brand. It’s all of us, and we can’t give up on it.