Dallas' new sports arena will cost more than $300 million, a price tag at

least 30 percent higher than originally anticipated, arena officials said this

week.

The budget, up from a projected $230 million, will not affect taxpayers'

contribution because the city capped its share at $125 million.

"The city cut a very smart deal capping our costs at $125 million," said

Mayor Ron Kirk, who led a campaign that won narrow voter approval

of the arena deal in January 1998. "If it's costing more because we're

building a more dynamic facility, I'm excited."

The arena, called American Airlines Center, will be one of the most

expensive arenas ever built. Staples Center in Los Angeles is scheduled

to open this fall at a cost of $350 million.

"It's going to be a bigger and better arena than we thought about when

we first started," said Larry Stuart, a partner with Hicks, Muse, Tate &

Furst, a member of the development group building the arena. "At this

point, you'd have to say what a great deal the city made for capping their

cost."

American Airlines Center will feature an expensive double-vaulted roof,

top-notch materials and a variety of amenities for fans, all of which are

driving up the cost, arena officials said.

The final arena budget won't be set until the design is completed in the

coming weeks, officials said.

But the Arena Group, a consortium involving the Dallas Mavericks,

Dallas Stars and related firms, has notified the city that it plans to borrow

$210 million to pay for its share of the project. Coupled with the city's

contribution, that would boost the projected cost to $335 million.

Mr. Stuart said that the $335 million figure includes financing fees,

reserves, up-front interest payments and the Arena Group's contribution

to a planned extension of Houston Street. Those costs weren't included

in the preliminary $230 million budget, he said.

Even after those additional costs are subtracted, the project still will top

$300 million, officials said.

"All the materials we're looking at are geared toward giving the residents

of Dallas the best possible arena," said American Airlines Center

architect David Schwarz, who designed The Ballpark in Arlington.

Mavericks owner Ross Perot Jr., chairman of Hillwood Development

Corp., declined through a spokesman to comment about the arena's

budget. Stars owner Tom Hicks, chairman of Hicks, Muse, Tate &

Furst, couldn't be reached for comment.

City Manager Ted Benavides, who took over the city's top executive

post after the arena deal was signed, said the city was smart to limit its

costs.

"It looks like they are committed to building a first-class facility, and that's

very gratifying, especially because the city's not going to have to pay any

more," he said.

American Airlines Center is being built north of downtown along

Stemmons Freeway. It is tentatively set to open in the fall of 2001.

The $230 million arena price tag surfaced officially in October 1997,

when the teams and the city unveiled a tentative deal to share

construction costs. At the time, the arena had not undergone even a

preliminary design, and no site had been chosen.

The arena deal, approved by the City Council in December 1997, called

for the city to use higher taxes on hotel rooms and rental cars - as well as

$3.4 million per year in rent from the sports teams - to pay its share.

Dallas voters approved the tax increases by a margin of only 1,642 votes

on Jan. 17, 1998.

The city also is paying $12.5 million to extend Houston Street from the

West End north to Wichita Street, near the arena. Voters approved most

of those funds in a May 1998 bond referendum.

Aside from the annual rent, the city does not get any income from the

arena. The Arena Group will keep all revenue from tickets, concessions,

parking and advertising.

In March, the Arena Group announced that American Airlines is paying

$195 million over 30 years for the right to name the arena and to enjoy

other promotional opportunities.

Mr. Kirk said he believes the size of the American Airlines deal reassures

him that the Arena Group can afford to spend more than anticipated on

the arena. He said the naming-rights deal was "explosively more" than he

had thought it would be.

Mr. Kirk is running for re-election against two challengers, lawyer

Margaret Donnelly and investor Billy Jack Ludwig. Both have criticized

him for his support of the arena project and other "big-ticket" items.

City Council member Donna Blumer, who led a campaign against the

arena taxes, said she would not worry about the higher price tag unless

the teams ask the city for more money.

"If it costs more than projected, that's all well and good as long as our

costs are capped," she said.

Staff writer Nora Lopez contributed to this report.