Harlan Crow/Unfair Park weigh in on Dallas Convention Center Hotel

I’m glad to see more and more people weighing in on the idea of a convention center hotel. The latest are Harlan Crow (his family owns the Hilton Anatole) and Unfair Park. Unfair Park gives some of the highlights of Mr. Crow’s latest letter to Dallas Mayor Tom Leppert on their website.

In a previous letter to Mayor Leppert, Mr. Crow’s feelings about the proposed convention center hotel are pretty straight forward. “The reason Dallas does not have a convention center hotel today is simple,” Mr. Crow says, “IT IS NOT ECONOMICALLY VIABLE.”

When I read the letter that Mr. Crow’s wrote the mayor last year, the first thing I thought about was his father, Trammell Crow. Mr. (Trammell) Crow was a real life J.R. Ewing in the 70’s and early 80’s, only nicer from what I can tell.

I immediately went to my bookshelf and started thumbing through my copy of Trammell Crow: Master Builder, a book about how Mr. Crow basically redefined commercial real estate in the United States and the world. He is responsible for much of what we see and know as Dallas today.

I turned to the chapter that talked about how the Anatole came about. My memory was that The Anatole was the senior Mr. Crow’s favorite project, out of hundreds and hundreds that he built. Page 198 yields the following information:

The same forces that impelled Crow to create new marts, also mandated the development of a major new hotel…At the time Dallas lacked a truly distinguished modern hotel like the 1,000-room giants that helped draw conventions to New York, Chicago, Los Angeles, New Orleans, and other major hubs.

If Dallas were to be competitive it too would have to have them. The Hilton interests…were already considering a site near the Market Center, and Crow wanted to beat them to it.

Later in the chapter Trammell Crow comments on the risk of such a project. “A hotel has most of the dangerous aspects of real estate and of an operating business,” Crow reflects, “and few of the good aspects.”

What Crow saw as an opportunity 30 years ago many see with the convention center hotel today. With the added caveat of that old real estate adage, location, location, location. And there are lots more cities vying for convention business than the days when Trammell Crow helped put Dallas in the trade show rotation.

There is no doubt that the prospect of a convention center hotel in Dallas makes for a tough business decision. For some of the reasons the Harlan Crow mentions in his letter to mayor Leppert.

Unfair Park points to a January 2005 Brooking’s Institute Study by Dr. Heywood Sanders that discusses just how difficult the convention center business has become. Part of the reason driven home by Dr. Sanders is an excess of convention center space – which we have here in Dallas.

That’s where most of Dr. Sanders’ 36 pages focuses, on the convention center itself. He looks at all the cities that are adding convention spaces through renovation or new facilities. Dr. Sanders explores the trend of declining convention bookings nationwide and emerging convention giants (as mentioned by me here) Orlando and Las Vegas.

If there were five 1960’s model cars in my driveway that I used to get to work, should I not buy a new one because I already have too many?

He also talks about declining hotel bookings in cities as well. And while he gives a number of examples of cities that are struggling, I did not see factors such as airports, infrastructure, visitor satisfaction, entertainment and others used to contrast the cities. What are all the factors that made St. Louis tank so bad despite investing in a convention center and hotel?

In the analysis of hotel occupancy in Dallas, it is rarely mentioned how disjointed and dysfunctional the current inventory of rooms are. If there were five 1960’s model cars in my driveway that I used to get to work, should I not buy a new one because I already have too many?

That is one of the reasons why I support constructing the Dallas Convention Center hotel on the southern side of the building. It presents less risk. Less risk because the up front costs will be less, and because the “entertainment options” will not have to be built from scratch.

Look, in the end my opinion counts for very little and I gladly defer to the expertise of Mr. Crow and Dr. Sanders. But I know that Dallas can be great, and the city took bigger steps towards greatness under the leadership of a visionary Mayor Kirk than the pothole filling Laura Miller.

Mayor Tom Leppert has done everything thus far to make me believe he’s on the side of the citizens of Dallas. Leppert is trying to walk the line between visionary and pragmatist. Thus far I think he is doing a fine job. His leadership on the convention center hotel is on point.

It will also take visionary business leaders, like I believe Jack Matthews to be. With all due respect to Mockingbird Station and the West Village, what bigger risk has their been in the last decade than the Southside on Lamar (which is actually making money)? The city should give him a shot with the hotel.