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Leading Off (11/13/09)

1. Our good friend from California, Lazy Man, should be happy: North Texas is apparently being punished for having tollways. Side note: Which of these stories, on the same subject, would you be more likely to read: One in which Dallas-Fort Worth leaders ”face funding roadblocks” or one in which Dallas-Fort Worth is  ”getting shafted on road projects” ? Doesn’t the Star-T win that headline battle in a walk?

2. Another week, another study ranking our relative economic strength against other metropolitan areas nationwide. This time the Milken Institute puts us at No. 13. That’s right behind Fort Worth (yes, they dared to separate the twins) at No. 12. And neither of us even make the top five in the state of Texas. Killeen and McAllen even finish ahead of us. The rankings claim to be based on job, wage, and technology growth.

3. Joel Miller of McKinney is hungry. He hasn’t eaten all month, and doesn’t plan to eat until Thanksgiving. The pastor is facing some of the same temptations that plagued Jesus during his 40 days in the wilderness. It’s like a passage straight out of the Gospel of Luke: “One day the distinct smell of bacon struck him, despite the lack of a breakfast joint in the area, and another saw a tray full of free sandwiches paraded before his eyes.” Somebody, please, take the man some food.

Why California Lags Texas

William Voegeli in this report in City Journal comparing the two states finds that California has a higher revenue per citizen than Texas ($11,160 vs. $7,558) but accomplishes less with the money. On education:

According to a report issued earlier this year by McKinsey & Company, Texas students “are, on average, one to two years of learning ahead of California students of the same age,” though expenditures per public school student are 12 percent higher in California.

What’s the reason for the disparity?

(more…)

Dallas-Fort Worth 5th Strongest Metro Area

Using rankings set by Brookings Institution, BusinessWeek presents the 40 strongest U.S. metropolitan economies. We rank No. 5, given props for being “sprawling, vibrant, and diverse.”

But we’re behind two other Texas cities: San Antonio (No. 1) and Austin (No. 2). And we’re behind two other areas in our region of the country: Oklahoma City (No. 3) and Little Rock (No. 4)

Forbes: “Recession-Proof” Dallas-Fort Worth a Good Place to Retire In?

Listmania seems to have finally gotten to Forbes.  According to this one, Dallas-Fort Worth is the second best “recession-proof” city to retire in. Atlanta is first, Tampa is third, Houston is fourth, and Austin and St. Louis (St. Louis?) are tied for fifth.

First, I question the use of the term “recession-proof.” Dallas may have been hit less dramatically than some other metro areas, but that hardly means we haven’t been hit at all. 

Secondly, and more confoundingly, if I’m retired, why do I care whether my city is suffering a recession?  I mean, I’m retired, right? The national recession may affect my stocks, bonds, and real estate assets, but what has that got to do with where I live? If anything, doesn’t it mean there are more people are available to mow my lawn?  Wouldn’t it drive labor and other costs down? In other words, wouldn’t a retired person rather live in a city that is experiencing a recession?

T. Boone Pickens Defends Truth of Swift Boaters

There have been plenty of stories about T. Boone Pickens’  plan for American energy independence. Today brings another.

What I hadn’t realized is that Pickens, even with his new Democratic friends, still defends the Swift Boat Veterans for Truth attacks on John Kerry in the 2004 presidential campaign:

In November 2007, Pickens had offered $1 million to anyone who could dispute claims in the Swift Boat ads that said Kerry had exaggerated his military service. Kerry accepted the challenge.

Pickens required Kerry to provide his Vietnam journal, his military records and the movies he shot on patrol. Kerry didn’t supply the items, a Pickens spokesman says. Kerry spokeswoman Whitney Smith says the senator offered to meet with Pickens but didn’t get a response.

Then, in 2008, a group of veterans took up the challenge. So far, Pickens says, the veterans haven’t disproved the claims in the ads and he has yet to concede the $1 million.

No one has disproved the claims?

Recession Bad For Pizza Hut, Good For Frozen Pies

Addison-based Pizza Hut has seen its sales drop 13 percent in the third quarter. If most their customers are receiving undercooked piles of dough like the Pizza Hut pie I ate a few weeks ago, I’m not surprised.

Apparently, more people really are choosing DiGiornio or buying a frozen Wal-Mart pizza and heating it up. I’d be interested to know whether Pizza Hut’s cheaper “Pizza Mia” option–a clear move to compete with concepts like Pizza Patron– is doing as poorly as the rest of their menu.

Anyway, sales are down, so let’s blame the advertising.

Dallas Fed President: Baby Boomers Are Selfish

And Generation Y will save us.

Holding his own generation at fault, Dallas Federal Reserve President Richard Fisher told a gathering of Texas Christian University alumni this morning at Northwood Country Club in Dallas that the Baby Boomers are “one of the most selfish generations. We wasted our children’s future.” He said it is disgraceful that the Boomers allowed Medicare and Social Security’s unfunded future obligations to reach their present level — about $104 trillion.

But he has confidence that his children’s generation has learned that it will have to save more, that it will have to find a better balance between consumption and savings, than did the Boomers. The Facebook-addicted, self-absorbed, ’shower-me-with-praise,’ texting-obsessed Millennials? Really? (He may be right.)

As for our current economic state, Fisher reiterated that he is cautiously optimistic, with “stress on the word ‘caution,’” especially considering that “consumption and credit [are] on a slow crawl out of Purgatory.”

(more…)

Southlake Developer: Downtown Dallas Has No Soul

Frank Bliss is executive vice president of Cooper & Stebbins, which developed the phenomenally successful Southlake Town Square. Even as large as that project already is — the size of downtown Fort Worth in terms of acreage — Bliss said they’re still only about 35% finished with their vision. In particular, they have more office and residential offerings in mind.

When I asked his thoughts about Downtown Dallas, he was quick to answer: “Downtown Dallas has no soul … Dallas never planned for a soul.”

To reclaim its soul it needs a true center. As do many others, he cites the construction of the tunnels years ago as one major mistake, sucking away the street life. (more…)

Once Again, What Planet Is Rick Perry Living On?

A good leader is an optimist. But there’s a big difference between being an optimist and being a fool. On Friday, Texas unemployment hit a 22-year high, up to 8 percent from 5 percent just a year ago. On Thursday, the Governor spoke at the Houston Chamber of Commerce:

Walls Are Crumbling at Neiman Marcus

Not literally, as far as I know. Things are bad for the luxury retailer. But not quite that bad.

The wall that has crumbled, according to the New York Post, is the wall between Neiman’s corporate and its Bergdorf Goodman division. Apparently Bergdorf has always had its own fashion office. In what would appear to be a sensible move when you’re trying to hold on to your effin’ ocelot-fur hat, they consolidated some of the roles. Those in the Bergdorf fashion office balked. The men’s fashion director quit.

Neiman President and CEO Karen Katz — who engineered the recent consolidation of Fazio and Patel’s roles — “maybe doesn’t totally get the fashion office,” according to one person close to the company.

The dust-up is another headache for Neiman Chairman Burt Tansky, who is beset by rumors that he will retire — even as the retailer scrambles to cut costs as sales continue to plunge.

One journalism-related complaint, which may seem strange to bother with since we’re talking about the New York Post here: “one person close to the company?”  That’s as specific as you can get?  Sounds like that quote could have come from a homeless guy standing outside the Neiman’s offices downtown.

Hicks Got Reprieve on Liverpool Debt

Bloomberg is reporting just how little interest European banks have in owning the Liverpool Football Club, striking a deal with Tom Hicks:

The U.S. private equity executive, who bought the northern English soccer team in 2007 with fellow citizen George Gillett Jr., agreed in July to repay a fifth of its 290 million-pound ($478 million) debt in return for Royal Bank of Scotland Group Plc and Wachovia Corp. refinancing the rest of the loan.

They note that U.S. lenders to the Texas Rangers haven’t been quite so kind to Hicks, having declared him in default because of missed interest payments.  And I found this astounding:

Companies have more debt, and are paying less in interest, than they did in the recession of the early 1990s, according to Jon Moulton, the founder of private equity firm Alchemy Partners LLP. A firm that had debt of more than four times its earnings before interest, taxes, depreciation and amortization in 1992 would now have debt of 10 times Ebitda, Moulton said. It would have paid 12 percent interest on that debt in 1992, compared with 3.8 percent to 5.3 percent today, he added.

Money really did get too cheap?

Is Tom Leppert a Fiscal Conservative?

Angela Hunt and I surprise each other sometimes by actually agreeing on an issue. Regardless of whether we agree or disagree, I respect her civility, her dedication to Dallas, and most of all, her diligence. As the vote on the city budget nears, she has been poring over the details. She helpfully prepared a slideshow on the budget here (just click on the image to move on to the next slide). If you want more detail, you can also click on her Excel spreadsheets. Her major question, as you will see, is whether it is prudent in this economic climate for the city to assume more debt. The mayor says we need to keep investing in Dallas. Hunt asks how we are going to pay for it.

I agree with the mayor. But I also agree with Hunt. And that means, paradoxically, that I disagree with both of them. To invest in Dallas we need to raise taxes to pay for it. Otherwise we will be running Dallas like a junior version of the Bush Administration. 

The rebuttal, of course, is that a recession is a stupid time to raise taxes.  Almost all economists would agree — for the national economy. But Dallas is only 3/10th of 1 percent of the national economy. Its effect on the economy is like a pebble thrown into Lake Texoma.  There is never a stupid time to be fiscally responsible.  Tom Leppert the businessman knew that; Tom Leppert the politician-with-stars-in-his-eyes seems to have forgotten it. If we want the debt, the city should raise property taxes to pay the interest and principal. Otherwise, the citizens are handing the potential Senate candidate a IDCIWBH* card.

*I Don’t Care, I Won’t Be Here

Cowboys, Not Rangers, Built Arlington’s Field of Dreams

The Ballpark in Arlington opened in 1994. Part of the sales pitch to voters funding its construction was the fantastic new developments that would spring up around it — restaurants, retail, hotels. We know how that story has turned out.

When the same voters approved $325 million for  The Colossus at Arlington next door, a similar vision was presented. But, so far, nothing. Is Arlington Mayor Robert Cluck at all concerned that 15 years from now we’ll be talking about the development around Cowboys Stadium just as we talk about the Ballpark’s failed plans? Of course not, he told me this afternoon. Why not? “Because it’s the Cowboys.”

We (North Texas) don’t love the Texas Rangers the way we love the Cowboys. That’s an indisputable fact. (I say that as someone who much prefers the national pastime to “violence punctuated by committee meetings.”)  But do we hold America’s Team in such high esteem that developers — and the retail, restaurants, and hotels they hope to accommodate –will rush to be associated with the big blue star in a way that they’ve never been compelled to join with the Rangers’ grand ambitions?

If the near-reverence in Cluck’s voice is any indication, the answer is yes. I’m hearing echoes of James Earl Jones: People will come, Jerry. People will most definitely come.

Brian Ferguson’s Gamble on A.H. Belo Corp. Stock Pays Off, Apparently

A wink-wink-working-at-work FBvian sent along this analysis of how Brian Ferguson and his partners have done since they sunk about $1 million into A.H. Belo Corp. stock. Looks good, right? (Honestly, that is really just a guess, because it took me a few times to read through the e-mail and not have my eyes instantly glaze over when looking at the numbers.)

I was reading your post on the Dallas Morning News this morning and it reminded me to go check on their stock. When I went to look there was a new SEC filing that caught my attention. This summer D ran a story about an investor who had decided to buy newspaper stock. What an idiot was my first reaction. I added the ticker to my stock pages so I could follow the implosion of the investment. (Horrible, I know!)

Anyway, today there was another filing showing the group had dropped below 5%. Their first filing was back on March 13. Yahoo Stock says the stock closed at 78 cents that day. They had 7% of the company. The new filing shows they were down to less than 5% around Aug 20 and finished the month at 3.5%. The price was between 3.25 and 4.00 during that time.

Using a little bit of math it is pretty much a given that they have returned all of their capital, eliminated any downside, made a healthy rate of return, and still have a couple percentage points in the company if there turns out to be any hope for newspapers (which I still doubt).

Fed Says Things Could Be Worse

The Federal Reserve’s Beige Book says that the Dallas district’s economy has “firmed” somewhat in the last six weeks. That’s about a positive as it’s willing to get.

In a speech today, Dallas Fed President Richard Fisher takes extra measures to ensure we don’t get too excited, now that some of the Fed’s contacts say we’re  “up off the bottom”:

“We are likely to see a prolonged period of sluggish economic performance and uncomfortably high unemployment as businesses reallocate capital and labor to fit the new economic landscape.”

I’m tired of this meltdown slowdown. Anything more inspiring on TV tonight?

Collin County Forces Arts Hall Forward

Are Collin County leaders gnashing their teeth every time they’re reminded of Dallas’ shiny new arts district opening this fall? In almost seven years of efforts, the Arts of Collin County — a partnership between Allen, Frisco, and Plano to create an arts hall and park — has only managed to help build a road.

And while Dallas raised more than $330 million in funding during a nine-year campaign, the Arts of Collin County Foundation collected just $9 million (granted, in only about four years of concentrated effort). For some reason, the Foundation disbanded, saying that the Arts of Collin County Commission could take it — and the remaining $12-16 million shortfall — from there.

Then last year, the executive director who had been hired to usher the project into existence figured his work was done and headed off to North Carolina.  That was shortly after project leaders asked McKinney to consider yet again participating in the project and ponying up $19 million as the other cities already had. McKinney refused even to take it back to the voters that had rejected it already.

Mike Simpson, the former mayor of Frisco, was tapped late last year to get the project out of its purgatory. You certainly can’t fault the man’s optimism. Last week, the Arts of Collin County Commission voted to start taking bids. Though they remain well short of their stated fund-raising goals, it seems they’ve found some new math to lead them to salvation: (more…)

Houston Disses Downtown Dallas

Ouch,  Jeff Moseley, CEO of the Greater Houston Partnership. Sure, you can brag about your fancy medical center, but did you have to pick on the size of downtown Dallas while you did it? You better watch yourself or we’ll ask Jerry to launch his giant space turtle to swallow downtown Houston whole.

Leading Off (8/11/09)

1.In Dallas City Council news, while the current members are mostly accepting of the proposed cuts in services to address the city’s $190 million budget deficit, former Mayor Pro Tem Don Hill was allegedly very accepting of kickbacks from minority contractors who got jobs based on the pressuring of developers.

2. Virgin America, the low-cost airline, is considering opening routes to Dallas and Austin. You may begin your “I’m flying Virgin” jokes in three, two, …

3. Frisco will fight its school district rating of “recognized,” because it thinks it deserves “exemplary.” This is because they deserve it. Even if they didn’t quite make it. Because it’s not fair. I mean, it’s Frisco.

Leading Off (7/31/09)

1. The City Council kicked off its retreat at Garrett Creek Ranch in Paradise, where members will try to figure out how to solve the city’s budget deficit, set priorities for the new year, and see if Tripper can lead them to a victory over the rich jerks from Camp Mohawk.

2. The Dallas Zoo could get new ownership, as the City Council seems open to a plan to have it run by the Dallas Zoological Society. Dallas would still have to contribute annual lump-sum payments—which sound suspiciously to me like elephant loans.

3. And, high-end condo sales in Dallas are still suffering. This news brought to you by the years 2008 to 2011.

Number Of Millionaire Households In Dallas Dropped Last Year, Research Firm Says

It’s “official”: the number of rich people in Dallas went down last year. According to a San Diego-based market-research firm called Claritas, Dallas had 83,594 millionaire households in ‘08–1.4 percent fewer than the year before. But, here’s the silver lining: Claritas says the number of millionaire households here will increase by a whopping 31 percent in the next five years. Meantime, Houston’s millionaire households (73,601 now, up 2.3 percent from ‘07) are expected to grow 33 percent in five years. Good luck with all that.

Dallas Dogged in Wall Street Journal by “Water Hog” Label

I’m reading this story about how North Texas needs more water. About how we’ve got about 6 million residents right now, but come 2060, we’ll have more than 13 million. About how we’re looking around to dam up some rivers to accommodate all those new residents (and their lawns). About how the people on those rivers don’t particularly cotton to our scheming. And I’m thinking: gee, this sounds familiar.

Here’s looking at you, Rod Davis.

American Airlines Parent Loses $390 Million In 2nd Quarter

AMR blames swine flu (among other factors) for the steep revenue drop. After a second quarter like that, the company really needs to regroup at halftime. (Sorry, so sorry. Couldn’t resist.)

Texas Jobless Rate Hits 7.1 Percent in May

I don’t know why Wick doesn’t want comments. Why, look at the political insight offered by readers of this DMN unemployment rate story. Now that’s just good reading. Especially the parts in all caps.