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DALLAS The City of Irving scored a legal victory Tuesday in its plan to build the proposed Las Colinas Entertainment Center.

Civil District Court Judge Craig Smith ruled that Irving can use tax revenue from alcohol sales to fund the $250 million project.

The destination concert, hotel and dining venue was planned near the new Irving Convention Center. The Entertainment Center project was to be financed by hotel occupancy taxes, ticket taxes and alcohol taxes that the district would take in.

In court, the Texas Attorney General challenged that premise.

Alcohol taxes were the key. The state wanted to keep a portion of taxes on booze at the entertainment complex, as it does most alcohol tax.

The city disagreed.

Usually, cities and towns in Texas are allowed to keep about 10 cents for every dollar of alcohol tax the state takes in.

To help fund the Entertainment Center, Irving proposed to keep all of it as much as $7 million a year of alcohol tax revenue that would be collected at the new development. It was a key source of funds for the project.

In front of Judge Smith, Irving's lawyers argued that Houston, San Antonio and Dallas are allowed to keep all the alcohol tax revenue on new developments in their cities.

They said the Irving couldn't sell bonds for their project if that revenue wasn't guaranteed.

In the end, Judge Smith agreed with the City of Irving, and that decision pleased Mayor Herb Gears.

We think the judge looked the case over carefully and made the right decision, he said. We think the revenue streams we've made in conjunction with the state are valid, and we continue to move forward with the project.

Gears said the city may start selling bonds to build the Entertainment Center within two months.

E-mail bharris@wfaa.com

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