$4 million lawsuit settlement at heart of ARK’s bid to take over Las Colinas entertainment center

The city has called yet another vote on the ARK Group's bid to take over the stalled entertainment center project.

You'll recall council was supposed to vote on a contract with ARK last week, but punted after various issues cropped up at the last minute. So now it's supposed to happen Thursday.

I haven't seen the new version of the proposed ARK contract, but a summary posted on the city website reveals a few changes and additions.

Notably, for the first time we learn how ARK will get Las Colinas Group to drop the breach-of-contract lawsuit it filed against Irving after their partnership to build the center collapsed last year.

With $4 million, is how.

That doesn't sound like much compared to the tens of millions in damages LCG stands to get from the city if it goes to trial and wins. But keep in mind LCG  may gain more from the settlement than that $4 million payoff. Since it's a private contract between LCG and ARK, the parties have no obligation to make all the details public.

As soon as the lawsuit is dropped, ARK gets to start building the $165-million concert hall, retail and dining complex for the city. In return, the North Carolina company gets to college the center's profits in the future and hefty city subsidies along the way.

The profits obviously depend on the project's success. Will it help transform Las Colinas into a tourist destination as advocates hope, or fall on its face as some fear?

The city subsidies, on the other hand, are mostly a known factor. And they haven't change much from what they were last week:

ARK would get $40 million from the city up front, plus  another $44 million or so on the back end, plus tax breaks worth untold millions, plus the right to operate the city-owned center for up to 99 years-the first three decades free of charge.

Beyond those payments, the city could end up putting even more money into the center if-to oversimplify a little-Irving's economy does well and generates more tax dollars than expected over the next 40 years.

That's a concern for council member Brad LaMorgese-among many he shared with me over barbecue last week.

LaMorgese imagined mid-21st century Irvingites lambasting their ancestors for signing away such a tax windfall.

"They're going, 'You buffoons. You gave up hundreds of millions of dollars,'" he told me.

It's a little more complicated than that. The tax we're talking about here, paid by hoteliers whenever someone spends the night in Irving, was created specifically to fund the entertainment center. By law, the city can't spend it on anything else. No entertainment center, no tax.

All the same, LaMorgese would rather any excess hotel taxes help pay down the city's share of the operation than ARK's.

Among the council member's other concerns:

- Does the contract have enough teeth to make sure ARK won't skimp on its share of the $165-million project? Or mismanage it?

- Shouldn't there be a cap on the tax incentives ARK stands to collect in future decades? Or perhaps a way to tie those incentives to the center's success, so if the center is sitting empty 20 years from now ARK doesn't keep getting a tax break?

- Does the contract give the city enough audit power to make sure ARK is spending taxpayer money properly?

Without seeing the latest version of the contract, it's hard to know if it addresses LaMorgese's concerns-or those of Mayor Beth Van Duyne and other council members who balked at the deal last week.

Hopefully we'll have the document early next week. Regardless, I expect to be writing about it before and after council votes Thursday.

Feel free to read the summary for yourself in the mean time.

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