News
Fair Park First suspends fundraising until audit findings clarify park’s finances
Fair Park First, the nonprofit manager of the 277-acre South Dallas site, has paused fundraising, at least until some questions are answered, according to board president Veletta Forsythe Lill.
The non-profit organization commissioned a forensic audit in April to assess whether the park’s operator, Oak View Group, mismanaged donor funds. The results are expected in August. While they wait, Lill and other board members have been in touch with donors, keeping them informed about the project’s progress and the audit.
“We’re not going to go out and ask for new grants until we can give good answers,” Lill said. The Dallas Morning News.
The city has tasked the nonprofit with the enormous responsibility of repairing its relationship with black residents in South Dallas, who have suffered a long history of inequality and neglect in area. The audit has worried longtime residents like Anna Hill, who has attended community meetings related to a master plan for the park. Delays could make the promise of revitalization seem like a distant dream, Hill said in May.
The non-profit organization provided The news with a breakdown of the funds that have been committed and raised for capital improvements on July 5 at the park. Lill said the numbers are estimates and could change, but they are the best numbers they have.
So far, the group has raised approximately $44 million in donations, pledges, partnerships and government grants, based on the data. The goal is to reach $85 million.
Of the $44 million, Fair Park First raised $29.27 million from pledges and donations for capital improvements and construction, including the construction of the long-awaited community park. About 59 percent of that donor money — $17.3 million — was raised directly by Fair Park First and held in a bank account overseen by Oak View Group, according to a contract.
That’s the money that is largely at the heart of the audit, Lill said.
Fair Park First is investigating allegations that Oak View Group may have used restricted philanthropic funds earmarked for capital improvements on day-to-day operating expenses.
A former board member and a familiar face in the city’s arts and history circles, Lill began leading the nonprofit’s board amid lingering questions about the park’s finances. Many public officials, including Dallas Park Board Chairman Arun Agarwal, have said they are waiting for the audit and warned that a delay could test public trust.
The nonprofit asks for patience. Auditors from Malnory, McNeal and Company, P.C. are reviewing every donation and receipt, Lill said.
She said Fair Park is a complex organism, as is its accounting. Each project is supported by a mix of funds, some raised by Fair Park First and some administered by the city.
Planners, architects and engineers were paid. Money was also used for signage or web designers. Did all of these expenses meet the donor’s terms? Was some of it appropriate to be an operating expense? Lill said that’s what Fair Park First hopes the audit will reveal.
OVG360, the hospitality division of Oak View Group that operates the site, has denied any wrongdoing.
“We are confident — and have documentation to prove it — that all uses of the donated funds were with the full knowledge and approval of (Fair Park First CEO Brian Luallen), acting on behalf of Fair Park First,” Brian Rothenberg, an attorney for Oak View Group, wrote in an April letter to city officials.
What funds are supporting Fair Park?
Most of the money flowing to Fair Park for improvements comes from the 2017 bond and Proposition A, which passed in 2022. Proposition A designates hotel occupancy tax to pay off debt the city is taking on to renovate Cotton Bowl Stadium.
Christina Turner-Noteware, assistant director of the Department of Parks and Recreation, said the city was managing the $140 million earmarked for the stadium. Dallas also oversees bond funds, she said.
Dallas set aside $50 million for 12 projects in the 2017 bond program. The funds would pay for repairs to the Food and Fiber Building, Centennial Building and the Coliseum, among others.
City data shows that about $44.8 million has been allocated.
The 2024 bond proposal would add $5 million to Fair Park, and that money has not yet arrived. The city also pays an average of $3.4 million to Fair Park First and Oak View Group in annual administrative grants.
Direct federal or state funding from entities like the Texas Historical Commission is also on the table. Fair Park First estimates it has used $300,000 in grants to upgrade HVAC systems in Fair Park buildings and build a site for the new cultural district.
Fair Park officials also spent $600,000 on initial designs for the Cotton Bowl and concepts for other buildings, but that money has been repaid, Lill said.
Grants from federal and state agencies, which the city would have to match, totaled $2.4 million. One example of those expenses includes the park’s plan to put a new cooler in the visitor center. Lill said half of that would be paid for using a grant from the state of Texas, and the other half would come from the city.
Another level of funding to support development in and around Fair Park will come from the Texas Trees Foundation, a nonprofit that seeks to develop greening initiatives in North Texas. Fair Park First estimated that the foundation could invest $12 million in the area to support development.
Elissa Izmailyan, the foundation’s director of strategy and operations, said the organization was partnering with Fair Park First to plant 500 trees in the park. But the plan isn’t limited to Fair Park. The foundation secured a $15 million grant from the Inflation Reduction Act through the U.S. Forest Service’s Urban and Community Forestry program.
The donation will support the South Dallas Greening Initiative, which aims to plant thousands of trees in Fair Park, Mill City, Queen City, Wheatley Place and surrounding neighborhoods.
The foundation will manage the funds and the project, Izmailyan said.
Why is the audit process complicated?
When Dallas brought Spectra, later acquired by Oak View Group, and Fair Park First on board, the spirit of the deal was to make the nonprofit the authority in overseeing Fair Park. However, the contract between the nonprofit and Spectra gave the for-profit company more financial power.
OVG360 is responsible for the park’s overall maintenance, according to the agreement. Maintaining the lawn, attracting acts like the Rolling Stones and Coldplay and keeping the lights on in several buildings throughout the complex are all part of OVG’s job description.
The way the agreement was worded also allowed the venue management company to manage bank accounts and oversee accounting, meaning that even though checks were made out to Fair Park First, OVG had the power to make deposits and withdrawals, according to the contract.
The mechanism OVG and Fair Park First used to authorize the money that could be withdrawn is unclear. Emails obtained by The news Through an open records request, John Jenkins, director of the Dallas Department of Parks and Recreation, asked Luallen to create a new bank account for donor funds shortly before the audit became public.
Lill said the nonprofit wants to amend the contract with Oak View Group and the city to gain more oversight and financial control over the donated funds the nonprofit raises. More than anything, “we want greater oversight over the future of Fair Park,” she said.