This shows how eminent domain works.
The Governor's Sweetheart Deal
BY ROBERT BRYCE
Governor George W. Bush and the other owners of the Texas Rangers are deadbeats. Rich deadbeats, but deadbeats nevertheless.
In early January, Bush and his baseball partners hit a home run, selling the Texas Rangers to Thomas Hicks for $250 million. Bush himself hit a grand slam. For his 1.8 percent share of the club -- which cost him $605,000 -- the Governor gets paid between $10 and $14 million. That is a return of up to twenty-three times his original investment -- in less than nine years. But even though Bush and his cohorts are making nearly three times what they paid for the club in 1989, they haven't paid $7.5 million they owe the city of Arlington.
The Rangers owners owe the money
because of a court judgment against the
Arlington Sports Facilities Development Authority (ASFDA), which was set up by the city to condemn land for, and administer, the Ballpark at Arlington project. In May of 1996, a Tarrant County jury found the ASFDA had not paid a fair price for thirteen acres of land it condemned, and awarded the sellers (the Mathes family) more than six times what the city had agreed to pay. A year after the jury's decision, the city decided not to appeal and paid the plaintiffs $7.5 million. That's where the Rangers' obligation arises.
In 1990 the Rangers agreed to pay any costs that exceeded $135 million on the Ballpark project. Under those terms, the city's position is that the $7.5-million judgment should be paid by Bush and the Rangers. Two days after Hicks purchased the Rangers, Arlington city attorney Jay Doegey told this reporter, "We have a
contract with them that says they will pay anything over $135 million. The costs in the condemnation case are over that amount." But Doegey has not demanded payment; it appears that Arlington city
officials don't want to irritate the owners of the Rangers.
Tom Schieffer, who was a general partner and president of the Rangers, said, "It's not our debt. That's the position we have taken. And that's consistent with what the master agreement says." But now that Schieffer and Bush are cashing in their chips, wouldn't making good on their $7.5-million debt be a nice gesture to the city? "I'm sure we will work out something," said Schieffer.
"I think when it is all said and done, I will have made more money than I ever dreamed I would make," Bush told the Fort Worth Star-Telegram. And he's making millions because the Ballpark at Arlington is a gigantic, taxpayer-supported, cash machine. Last year, Financial World magazine named the Ballpark the most profitable venue in baseball. Hicks didn't buy the Rangers because he wants Juan González's autograph. He bought them because he can make a lot of money at the stadium that George W. Bush takes credit for building.
In 1993, while walking through the stadium, Bush told the Houston Chronicle, "When all those people in Austin say, 'He ain't never done anything,' well, this is it." But Bush would have never gotten the
stadium deal off the ground if the city of Arlington had not agreed to use its power of eminent domain to seize the property that belonged to the Mathes family. And evidence presented in the Mathes lawsuit suggests that the Rangers' owners --
remember that Bush was the managing general partner -- were conspiring to use the city's condemnation powers to obtain the thirteen-acre tract a full six months before the ASFDA was even created.
In an October 26, 1990, memo from Mike Reilly (an Arlington real estate broker and part owner of the Rangers), to Tom Schieffer, Reilly says of the Mathes property, "... in this particular situation our first offer should be our final offer.... If this fails, we will probably have to initiate condemnation proceedings after the bond election passes."
The Mathes memo reveals a sharp contrast between Bush's public pronouncements in defense of property rights and his private profiteering. While running against Ann Richards, Bush said, "I understand full well the value of private property and its importance not only in our state but in capitalism in general, and I will do everything I can to defend the power of private property and private property rights when I am the governor of this state."
Yet Bush and his partners used Arlington's powers to condemn the land for the stadium, and relied on taxpayers to repay the bonds sold to build the Ballpark -- receiving what amounts to a direct $135-million subsidy. Now, after tripling the amount they paid for the Rangers, Bush and his partners won't re-pay the city a measly $7.5 million.
"The best way to allocate resources in our society is through the marketplace. Not through a governing elite," Bush said on the first day of his 1993 campaign. By selling the Rangers, Bush and his fellow sports moguls demonstrated the power of the marketplace -- not exactly a "free-market" marketplace, but who worries about small details? Now, by refusing to pay their debt to the people who pay the taxes in Arlington, they are also proving that the governing elite live by their own rules.
Robert Bryce is a Contributing Editor for the Austin Chronicle, where a version of this story first appeared. He broke the story of the Governor's Ballpark at Arlington in the Observer of May 9, 1997.
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