The Las Colinas Group (LCG) is proposing a new funding plan for the Irving Entertainment Center (IEC) that would substantially reduce the City’s investment in the IEC. The proposal would decrease the City’s funding, and increase LCG’s funding, so each contributes a net $125 million to fund the Entertainment Center. TDI, a real estate development company with in-depth management experience and whose executives have raised more than $11 billion in capital for over 300 projects in the U.S., Mexico and Canada, is the principal investor raising funds.
“We listened to those in the community who are concerned that a $170 million bond issue is too large of a commitment for the City,” said David S. Margulies, a spokesperson for LCG. “Research in the investment community shows that TDI can finance more of the transaction, which will make it easier for the City to fund its portion of the costs of the IEC.”
“This is the most exciting project I have worked on in 30 years,” said Bobby Page, TDI Managing Partner. “I went to work for Ben Carpenter more than 30 years ago and I have been in business here in Irving since 1980. The IEC is the best way to complete Mr. Carpenter’s vision of making the Urban Center a place to live, work and play.”
“The introduction of TDI, with its top notch executive team and decades of experience in Irving, has already led to great strides in moving the IEC forward,” said Margulies. “TDI is actively involved in the IEC and has been a vital contributor on a number of important fronts including: restaurant leasing, naming rights, food and beverage concessions and on-site entertainment and promotion.”
“TDI and LCG are working closely with the City Staff to continue progress on the IEC and address issues necessary to proceed in a businesslike manner,” said Margulies. “TDI asked for meetings with the City Manager and Mayor, as well as key City Council Members, to explain the new financing plan and the progress that is being made on key elements of the IEC.”
TDI opened an Entertainment Center Discovery Center at its offices at 600 East Las Colinas Blvd., Suite 1800 in Irving, Texas, to showcase the IEC to interested community leaders, residents and business partners.
IEC Called Vital to City’s Economic Development
“This project remains vital to the city’s economic development and commercial tax base,” said Page. “Other cities are growing while Irving’s commercial development is stagnant.”
Irving is lagging in commercial development primarily because of a lack of amenities in the Urban Center, which caused reduced occupancy rates and lower commercial valuations for the buildings there. Without commercial development, the tax burden falls more heavily on homeowners.
“The Urban Center is a critical component of the future success of Las Colinas and the City of Irving,” said Bernard L. Weinstein, who prepared an economic impact study of the IEC for LCG. “When fully developed, the vacant land in the Urban Center will support thousands of additional residents and daytime workers and billions of additional tax base dollars for the City,” said Weinstein’s report. The report goes on to caution that it is unlikely this development will materialize unless the Las Colinas Urban Center is perceived as a more vibrant locale.
The report also states that an improvement in the City’s commercial property tax base would potentially reduce property tax rates by 10 to 15 percent.
Under the new proposal the City would retire its bond debt based on income from the 2 percent Hotel Occupancy Tax plus City and State sales tax rebates and a rebate of the City’s portion of the IEC mixed beverage tax, which are already dedicated to the IEC. TDI’s investment will be repaid from operating revenues from the IEC. The City will be requested to repeal the Parking Tax and Admissions Tax it previously passed, which would have been pledged to pay taxable bonds the City will no longer issue under the new proposal. LCG and TDI would have maximum of six months to fund and close the transaction after the City receives its investment grade bond rating.
TDI executives have decades of experience raising funds for projects throughout the United States, and after meeting with investment bankers and potential investors, are confident they can raise the necessary financing for this proposal,” said Margulies.
“The biggest risk for Irving is letting this opportunity fall by the wayside and having the Irving Convention Center operate on a stand-alone basis,” said Margulies. “This new proposal takes into account many concerns that have been expressed about the IEC while providing an opportunity to get the dirt moving on the IEC sooner.”
