Council Member Casts Doubt on Dallas City Hall Report, Citing Past AECOM Settlement
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In a sign that tensions may continue to rise as officials debate whether to relocate Dallas City Hall, a city council member is pointing to a past legal settlement involving AECOM, the firm that helped produce the building’s property condition assessment.
Council Member Cara Mendelsohn (District 12) shared yesterday a 2023 Dallas Morning News article about a federal settlement involving AECOM’s work as a federal contractor following Hurricane Katrina.
AECOM agreed to pay $11.8 million to resolve allegations that employees included “materially false design, damage, and replacement eligibility descriptions” in disaster aid applications for public buildings in New Orleans, according to the U.S. Department of Justice. The company did not admit wrongdoing and said at the time it settled to avoid the cost and distraction of litigation.
According to the Justice Department, the disputed applications resulted in tens of millions of dollars in taxpayer money being approved for full building replacements rather than repairs. Funding was supposed to be limited to repair costs unless they were 50% or more of an institutional facility’s replacement cost.
AECOM defended its work in a statement at the time, saying they helped applicants secure damages during the hurricane and subsequent flooding between 2006 and 2010.
“The disputed funds in this case were all allocated for rebuilding New Orleans schools and no funds in question were directed to AECOM,” the company said in 2023. “We continue to disagree with any assertion by any government agency that the schools received too much money to rebuild.”
AECOM said it opted to settle for a “small fraction of the damages” sought in order to avoid the “expense and distraction of litigation.”
The original complaint identified a single AECOM project officer as the person who submitted the allegedly fraudulent applications, however, the Justice Department noted that company supervisors “reviewed and did not correct” them.
Mendelsohn, who has been outspoken in opposition to relocating City Hall, referenced the 2023 settlement as she criticized the cost estimates tied to AECOM’s City Hall assessment.
“Folks, this is how we get to a ridiculous estimate of $1 billion to repair city hall,” Mendelsohn wrote on social media. “And then we have voices saying it is improper to question a company like AECOM, because they’re big! And HQ in Dallas.”
AECOM relocated its headquarters to Dallas from California in 2021, setting up shop in Galleria Tower One in North Dallas. The company has scored contracts with the city for big projects, including the Kay Bailey Hutchison Convention Center redevelopment and Fair Park capital improvements. It was also one of the companies contracted by the Dallas Economic Development Corporation to assess City Hall. More recently, it snagged a federal defense contract on a project valued at up to $151 billion.
AECOM is a global infrastructure consulting firm that provides planning, design, engineering, and construction management services for public and private sector clients. It works across industries like transportation, water, environmental services, and disaster recovery, often supporting large-scale infrastructure and government projects.
The firm drafted the final City Hall condition assessment report using third-party site visits by consultants and its own survey of the building. The report concluded that 1500 Marilla St. needed significant repairs and system replacements totaling at least $329.4 million. The remainder of the $1 billion price tag comes from temporary relocation costs, outfitting to get that building move-in ready, and financing.
Mendelsohn has argued the report assumes full system replacement and upgrades rather than more limited repairs.
“No matter what it is, how old it is, how well it functions, their estimate on city hall includes complete replacement and upgrades of every system, pipe, wire, window, floor, fixture, toilet, sink, because some folks want fancier government offices and want to build it to a Class A brand new standard,” Mendelsohn wrote, calling the report a “façade built to justify tearing down your paid-off city hall for sports, gambling, and the profit of nearby landowners.”
Officials like Mendelsohn and residents in the Save City Hall camp have suggested that staff and consultants like AECOM are working to clear the way for a new Dallas Mavericks arena. It is widely believed that the NBA team is interested in building a new arena at or near the City Hall site, though no deal has been approved. Mavericks CEO Rick Welts has said the city would need to take action if it wanted the franchise to set up shop downtown.
Earlier this month, the city council voted to direct the city manager to further explore relocation options and repair scenarios. Council members also adopted a resolution requiring the city to determine whether any companies involved in producing the property condition assessment could have conflicts of interest if they participate in future solicitations related to the sale or redevelopment of City Hall.
That meeting proved rather tense in its later hours, with Mendelsohn and Council Member Adam Bazaldua (District 7) proposing restrictions on nearby landowners within a certain radius of City Hall from participating in redevelopment. Staff and consultants were also questioned about transparency and the assessment process.
Mayor Eric Johnson, who was dismayed by the tenor of the meeting, criticized the insinuations made about the ethics and professionalism of staff and the consultants. A week and a half later, the mayor released a newsletter defending the process.
“It is ironic that some of the same voices who most loudly demanded an outside facility condition assessment are now the loudest critics of the result,” Johnson said, suggesting “some council members” were pushing an alternative arena site “that would simply benefit a different set of developers.”
Mendelsohn has been promoting the former Valley View Center site in North Dallas as a potential arena location if the Mavericks choose to build a new arena in Dallas city limits. The site made the franchise’s shortlist along with an unidentified downtown property widely believed to be 1500 Marilla St.
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The same grifters that tried to convince us we desperately needed the Trinity Tollway are now pushing this absurd scheme to bulldoze City Hall. We need to learn from the past.