The Real Cost of Abandoning City Hall? It’s Nowhere Near $1B

Feature photo courtesy of Leonid Furmansky.

The push to abandon Dallas City Hall is barreling ahead despite a shocking lack of reliable cost details and a fast-approaching and entirely manufactured deadline.

It’s a sweeping and irreversible proposal brought with zero taxpayer input by the same minds whose leadership caused our largest downtown tenant, AT&T, to flee for the suburbs after specifically citing a loss of confidence in the city’s “effective/sustained governance.” 

The plan would hand over some of the city’s most valuable public land for redevelopment into a privately controlled sports, entertainment, and potentially casino district owned and operated by Dallas Mavericks owner Miriam Adelson. By giving up its paid-for City Hall building, the city would be stuck with a recurring bill that would likely cost hundreds of millions of dollars in lease and maintenance costs for a vast assortment of aging office tower space.

Grab Your Wallets: Leaving City Hall Could Cost $1.07 billion

According to the EDC/AECOM study commissioned by the City Council, abandoning City Hall and moving to one of nine unidentified downtown office towers (each as older or older than 1500 Marilla), could cost up to $1.07 billion. That doesn’t include the $250 million price tag for moving emergency operations cited by some council members. 

The EDC/AECOM report came back with an equally scary $1.4 billion price tag for keeping and repairing City Hall by including make-ready costs and line items that are separate from repairing. But look deep within the report’s line items, and you’ll see that the actual cost of repairing the building is $349 million, but even that number is grossly inflated. Really, that might be more like $70 million according to independent experts. 

They Don’t Want You to Compare the Numbers

One key problem is that it’s impossible to make a good faith comparison between cost estimates for repairing and staying in City Hall and moving to one of the Downtown towers secretly described as Options 1 through 9. 

For one thing, the city’s stated cost estimates for moving do not appear to include significant additional expenditures that could jack up the estimates by hundreds of millions of dollars. Consider: the EDC report estimates spending $164 million to $264 million on making a refurbished City Hall "move-in ready" — which almost any building would require.

Writes Candy’s Dirt:

Making City Hall move-in ready will purportedly run $165-264 million, and there’s quite a lot to that. The biggest component of that is work on the interiors, coming in at $54-107 million. This includes office fit-out, modernization, and workplace improvements. Then, furniture, fixtures, and equipment at $20-45 million, followed by getting the building ADA-compliant for $33 million. Outfitting a restored 1500 Marilla St. with necessary technology — which includes things like more AV equipment, surveillance and security systems, emergency dispatch consoles, etc. — is estimated to cost $15-31 million. Soft costs, moving, and change contingency would be $43-48 million.

Of course, those line items are conspicuously absent from estimates the EDC recommends for abandoning City Hall and moving city services to a leased Downtown tower. Also, leasing office space saddles taxpayers with tens of millions of dollars in lease payments every year forever. 

Lost in the dizzying dollar signs is the fact that those pushing to give away City Hall are also behind a plan already moving forward to move 911 and other emergency services out of City Hall and relocate to Red Bird at a cost of $250 million. That drives up the cost of moving even more!  

The True Cost of Phased Repairs

Disinterested experts have determined such a phased repair plan would cost $70 million to $153 million – not the $1.4 billion identified by the EDC/AECOM report.  

So the real question is, why is the city pushing something that could cost $1.32 billion, in addition to long-term lease payments, when it could spend $153M or less to stay in the building it already owns. And why the rush? Think of the good the city could do by going the more fiscally responsible route?

Why Abandon City Hall?

That big push to sell City Hall? It started with the Mavericks. Owned by a Las Vegas billionaire, the team has made it known that it wants to leave Victory Park to build its own entertainment complex that would take up 60 acres. 

Not considered in the city’s proposal is something economists call “opportunity costs,” tradeoffs that occur when you choose one decision over another, those what ifs that come after choosing a fork in the road. 

What happens if City Hall is demolished and the arena deal falls apart?

Dallas could be left with another vacant downtown tract or surface parking lot occupying one of the city’s most valuable and symbolic sites. It’s certainly happened before. Then we’re saddled with the cost of moving City Hall without any additional revenue to offset the cost.

Writes the Dallas Morning News’ Pulitzer Prize-winning architect Mark Lamster:

"It is not hard to imagine City Hall being razed only for the economy to turn and for the site to become yet another empty parking lot.”

Downtown Dallas already has abundant development-ready land, including property south of City Hall and future land freed by the convention center redesign — enough space to accommodate a new arena without destroying City Hall.

The Dallas Mavericks insist they need to make a decision by July, even though they’ve known their 30-year lease was set to expire. Rather than a rushed decision, why not tap the brakes and extend the lease a little?

Shuttering the AAC and Destabilizing Victory Park. What is the Cost of That?

The American Airlines Center remains the economic anchor of Victory Park, an area that struggled for more than two decades before finally gaining momentum. Removing the Mavericks will undermine one district while attempting to recreate essentially the same concept elsewhere downtown.

Lamster describes it as a “whack-a-mole” approach to development: subsidizing one district at the expense of another.

“Removing its anchor tenant would be an enormous setback to its fragile status. More to the point, what is being proposed for the area around City Hall - an up-from-scratch development anchored by an arena - is simply another version of Victory Park. Why should it work any better on the other side of downtown?”

What would demolition itself cost?

The City Hall that I.M. Pei designed is in many ways a unicorn. The unique architectural design, construction techniques and materials ensured the building was built to last. Some AI modeling has revealed eye popping figures such as 400,000 tons of concrete and 6000 tons of rebar that would need to be separated and carted off at a potential cost of $60 million. This would result in a mountain of concrete dust and rubble that could pose serious health risks (remember 911 syndrome?) to the entire southern portion of downtown for months. Unfortunately, the city while considering demolition, has never actually explored the costs and ramifications of such a move.

What is the Value of Losing an Architectural Landmark?

1500 Marilla is a paid-for and purpose-built structure that checks all the boxes to represent and serve as this city’s civic heart and not easily replaced at any cost.

Writes the American Institute of Architects Dallas Chapter:

Dallas City Hall is more than an aging office building. It is a distinctive civic landmark, widely recognized and now under active consideration for landmark status, with a large plaza that can be improved and more actively programmed. Most importantly, it is a visible symbol that local government is accessible and present in the heart of the city. Moving core City functions into leased private space would make Dallas an outlier among major U.S. cities, where owning and occupying a central city hall remains the norm. It would reduce the City’s long-term control over security, access, and essential operations, and remove a daily source of foot traffic and civic presence from downtown just as we are working to strengthen it.

Before taxpayers surrender a publicly owned architectural icon for a speculative private development deal, they deserve transparent numbers, honest debate, and a genuine opportunity to decide whether demolishing City Hall is truly in the city’s long-term interest.