Texas Billionaires Convert ‘Lucky’ Failure in Dallas Arts Zone

Bloomberg
October 9, 2009

Dallas billionaires found a way to get an art museum, concert hall and opera house when voters rejected a $47 million bond issue for financing: They forked out their own money to build a cultural zone.

“What we did instead was so much better” than the 1978 plan, said Margaret McDermott, the Dallas arts benefactor and widow of Eugene McDermott, co-founder of Texas Instruments Inc. “We were lucky it failed.”

The final piece of the Dallas Arts District, the $392 million AT&T Performing Arts Center, will be dedicated Oct. 12. Its 10-story theater and cylindrical, 2,200-seat opera house join three museums and a symphony hall built during the past three decades. The district covers 19 blocks in downtown Dallas, the eighth-largest U.S. city.

Ross Perot, Charles Wyly and other Dallas billionaire and millionaire arts supporters persevered through the mid-1980s collapse in oil prices, the Texas savings-and-loan crisis, eight mayoral administrations and today’s recession. After spending almost a billion dollars, they have just $30 million still to raise.

“What is extremely impressive is the number of individual big donors” to the AT&T Center, said Bruce Thibodeau, president of Los Angeles-based Arts Consulting Group Inc., which advises clients on fundraising and didn’t work on this project. “This is the first time there have been more than 100 $1 million donors.”

McDermott, 97, led the charge to develop the district, seeking a new home for the Dallas Museum of Art when she headed its board in the late 1970s. A 1977 planning study said that grouping the city’s major arts institutions in the northeastern corner of downtown would be mutually beneficial.

Reviving Downtown

“The idea was to bring some vibrancy to downtown,” said Veletta Forsythe Lill, the Dallas Arts District’s executive director. “A lot of cities in the 1970s were looking to revitalize their downtowns, which had become unfashionable.”

By 1998, the art museum and symphony hall had been built, and McDermott kicked off fundraising for the performing arts center with a $3 million gift. She gave another $3 million in 2002. The interior hall of the opera house is named for McDermott, while her husband Eugene McDermott’s name is on the hall at the symphony center.

Perot, 79, a Dallas resident, jump-started the I.M. Pei- designed symphony hall with a $10 million donation, stipulating that it bear the name of a longtime lieutenant, Morton H. Meyerson. He made the gift in 1984, the same year he sold Electronic Data Systems Corp. to General Motors Co. The $3.9 billion sale of Perot Systems Corp. to Round Rock, Texas-based Dell Inc. is pending. Perot declined to comment.

Opera Benefactors

Opera house namesake Bill Winspear and his wife, Margot, contributed $42 million before his death in 2007. Winspear founded Associated Materials Inc., a Dallas maker of building supplies that he sold in 2002.

The theater received a $20 million boost from Wyly, 75, co- founder of Dallas hedge-fund company Maverick Capital Ltd. and former chairman of Michaels Stores Inc., and his wife, Dee.

“No arts center has been built on this scale since Lincoln Center, said Lill, referring to the New York performing-arts showcase that marked the 50th anniversary of its groundbreaking this year. “I don’t expect to see another like it in my lifetime.”

Construction of the district’s buildings has cost about $900 million, Lill said. Private gifts are paying for all but $65 million of the AT&T Center’s cost, she said.

Only $30 million for the AT&T Center remains to be raised, said Randy Kurtz, chief financial officer. Gifts of more than $1 million came from each of 132 donors, said Maria May, a spokeswoman.

Paying for Bonds

The private money will help pay off $151 million of tax- exempt bonds issued by a nonprofit corporation through the city. An outdoor venue and second theater will be added to the AT&T Center later.

AT&T Inc., the largest U.S. phone company, moved to Dallas from San Antonio in 2008 and signed on as the performing arts center’s sponsor last month, helping offset city budget cuts. Details of AT&T’s support haven’t been disclosed.

London architect Norman Foster designed the opera house, a red glass drum seven stories tall that is rimmed by a louvered canopy to block the Texas sun. The theater, designed by Joshua Prince-Ramus of New York and Dutch architect Rem Koolhaas, is a box-shaped structure covered with 466 aluminum tubes resembling giant metal curtains.

“There’s a lot of excitement with the new house and a big pop in new subscriptions,” said Jennifer Schuder, director of marketing for the Dallas Opera. New subscriptions for the five- opera season are up 22 percent from a year earlier, she said.

Development on Hold

Not yet built are most of the buildings that developers once proposed to flank the district. Of six high- or medium-rise structures announced after plans for the AT&T Center were unveiled in 2004, only one has been constructed.

“I’ve been more patient than I’ve wanted to be,” said Lucy Billingsley, a developer whose $125 million, 24-story One Arts Plaza mixed-use building was completed in 2007.

Her plans to erect two more buildings are on hold indefinitely because of the recession and a glut of office and condo space, Billingsley said.

“Dallas civic leaders and big-money people love to say we’re the biggest and best,” said Darwin Payne, a city historian and retired professor at Southern Methodist University in University Park, a Dallas suburb. “I can’t imagine another city trying to build it in quite the same way.”