Fair Park’s finances are being audited after its nonprofit manager “reported monetary issues to the city” similar to a subcontract with the operator. The nonprofit Fair Park First is a sponsor of the Oak View Group, which manages the park’s daily operations. In a statement, Brian Luallen, executive director of Fair Park First, said the organization learned “a little over a year ago week” that Oak View Group “may have inadvertently and incorrectly allocated and used a limited budget raised through Fair Park First for newspaper fleet operations.
“If there is an erroneous and unauthorized reallocation of the budget, it is a significant challenge and undermines our confidence,” he said. “If we notice that the limited budget donated to Fair Park First has been misused, we will do everything in our power, in partnership with the City of Dallas, to ensure that budget is returned and redirected as intended by donors. “
Luallen said Fair Park First hired Malnory, McNeal and Company, P. C. to conduct the forensic audit in “close coordination” with the city of Dallas. The philanthropic donations are for capital innovations on its 277 acres, particularly the structure of the long-awaited network. Park in an above-ground parking position, and not for operating expenses.
“We have officially informed Oak View Group of our goal to thoroughly investigate this matter, if possible in partnership with them, so that we can provide strong assurances to our donors who are making a long-term investment in Fair Park that the limited budget has been appropriately allocated,” Luallen said.
In a letter sent through its in-house counsel, Oak View Group said it had done nothing wrong: “We vehemently deny any wrongdoing by our component regarding the use of a limited budget. We are pleased – and have documentation – that all uses of the donated budget were made with the full wisdom and approval of Mr. Luallen, acting on behalf of Fair Park First.
The City Council was briefed in closed consultation to seek “legal recommendation from the City Attorney in connection with the City’s control contract with Fair Park First. “The Dallas Parks and Recreation Board is hearing the same thing today behind closed doors.
No one on the park’s board would comment. But the city showed the audit and posted last night: “Fair Park First, the nonprofit administrator of the city’s Fair Park, recently informed the city of monetary issues similar to those of his sub-administration. agreement with Oak View Group, the entity that manages the day-to-day operations of Fair Park. The City takes those considerations seriously and takes all mandatory and appropriate measures to protect its interests. The City is committed to monetary transparency in all of its operations, adding Fair Park, and will seek to maintain the continued momentum and good fortune of Fair Park.
To see what’s happening, you have to go back to 2018, when the Dallas City Council voted unanimously to privatize Fair Park. Under the terms of the contract, the city retained ownership of the park’s surface and buildings, but allowed a for- Profit Operator, then called Spectra, acquired through Oak View Group in 2021, to fill its buildings and open spaces with occasions and similar programming. He also controlled day-to-day operations.
Fair Park First at the top of that org chart, a new nonprofit board tasked with managing the operator, raising funds, building this networked park, and making agreed-upon primary innovations for the old Art Deco structures. In return, the city agreed to pay $35 million to help operate prices for the canopy for the first 10 years of the contract. This is touted as an annual savings of $8 million compared to what the city itself spends to run Fair Park.
There were two other bidders to manage the park. Or they asked the city to foot the bill in full in the form of an annual monitoring fee; One location charges $14. 8 million, the other $16. 9 million. You may know why the Council made this decision. Maintaining Fair Park First’s offering meant saving $100 million over the next decade.
Spectra’s argument at the time was that it didn’t want that much cash because it was confident it could use its existing relationships with music promoters and sports agencies, etc. , to fill the ground 365 days a year, generating a sufficient source of revenue. All of the “surplus revenues” were intended to expand operations in the park or make much-desired innovations in the buildings, but the cash generated in the park is intended to remain there.
However, how this money was distributed was one of the considerations raised at the time by members of the park’s board of trustees and the city council. Bobthrough Abtahi, then chairman of the park’s board of trustees, wondered where the money was for the network. (Luallen and his team then conducted a fundraising campaign to meet the city’s demands that it provide $85 million to fund the new park and other amenities. It is contractually obligated to generate $3 million per year, and has raised more than $44 million to fund the project. date). In an interview with Dallas Observer columnist Jim Schutze ahead of the privatization vote, Abtahi also questioned how profits between the holding company and the nonprofit would be consistent, i. e. , “excess profits. “
It’s unclear exactly how long the audit will take and no one will comment on the amount of cash in question. But Fair Park has had notable successes since its privatization. The Cotton Bowl is undergoing $140 million worth of improvements, an amount secured after voters approved a proposal that would allocate a portion of hotel tax revenue to the park and a new conference center. It has hosted the Rolling Stones and Lionel Messi and his Inter Miami CF. Construction of the network park is scheduled to begin in November 2025, once the municipality completes an environmental analysis of the site.
The money it generates is a combination of proceeds from events and other reserves, as well as philanthropic donations. The contracts that gave rise to Fair Park’s personal operation are complex and dictate express uses for express portions of cash. We don’t know which Fair Park First found it, but it was vital enough to remove it and order a forensic accounting of where the dollars were going.
Update, 5/4: Below is a letter that Oak View Group’s internal staff suggests sending to Fair Park First.
Correction: A previous edition of this story said that Fair Park First needed to raise $85 million by the end of the year; It’s the total amount of your fundraising campaign and there’s no deadline.
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