What’s Wrong with the City’s Management Contract for Fair Park: Part 4

 Candysdirt.com is breaking down the most recent Fair Park Management Agreement.  Remember, there is a special City Council meeting on this agreement tomorrow at 1 p.m. Click here, here and here for parts 1, 2, and 3.

Part IV subtitle: Are We Giving the Fox the Supra Keys to the Henhouse?

To refresh your memory, to aid in separating language taken directly from the 12-page slim contract and my interpretations, I’ve left the original language as is.  Sections where I note where “articles” and “sections” (major and minor buckets) have been left out of the shortened contract, I’ve tried to summarize their contents.  Long and/or complex paragraphs I have inserted “returns” to break them into more easily digestible chunks, their wording is unchanged.   My opinions are underlined from here on …

As I’ve said, the most recent contract has a few things missing from earlier versions …

Whole ARTICLES and their subsections removed from the latest public version:  Most of these subjects are non-controversial and fairly standards in contracts.  I’ve noted anything I thought unusual (Article IX).

ARTICLE V, UTILITIES, TAXES, INSURANCE, AND INDEMNIFICATION. (The City pays for utilities at reduced rates and bills the Foundation. Foundation responsible for tax payments and insurance. Foundation hold City blameless in lawsuits and liabilities. The City can join in any legal action if it desires.)

ARTICLE VII, REVENUE OPPORTUNITIES (Renting facilities, selling naming rights, concessions, etc.)

ARTICLE VIII, OTHER CITY SUPPORT. (City must maintain roads into Fair Park and City gives responsibility for security to the Foundation.)

ARTICLE IX, FINANCIAL REPORTS, ENTITY STATUS, AND TRANSPARENCY.

Foundation required to provide to the City quarterly and annual financial statements along with the (opaque) IRS Form 990 (the same form the State Fair uses). The Foundation is subject to the Texas Public Information Act (similar to the federal Freedom of Information Act). But this is NOT enough. On August 2, 2016, the State Fair of Texas, setup as a similar non-profit, successfully overturned a lower court ruling that would have forced them to release additional financial information. This contract between the City and the Fair Park Foundation must specifically grant public access to ALL financial information for fear the Texas Public Information Act is not enough.

ARTICLE X, ENVIRONMENTAL QUALITY. (Handling hazardous materials and waste)

ARTICLE XI, CASUALTY LOSS. (What happens if Fair Park burns or is otherwise damaged or destroyed)

ARTICLE XII, CONDEMNATION. (Seizing lands by eminent domain action)

ARTICLE XIV, GENERAL PROVISIONS (Standard contract language)

ARTICLE XV, DEFINITIONS.  (An index of terms)

TOPICS MISSING COMPLETELY FROM CONTRACT

• Remove the parking lot moat. City and privately owned parking lots choke Fair Park from the community. Part of the City’s goals in Section 1.01 should be the condemnation and removal of the vast majority of surrounding parking.  Turn the land into parkland or repurpose for neighborhood business or income-sensitive residential use.

• Non-Compete Clause.  ALL decision-making employees and consultants of the Foundation, City, Subcontractor or Park Tenant are barred from taking any paid position within a related organization for a period of five years. (This avoids people making sweetheart deals for their future employer)

• Barring of tenants or contract holders from voting positions within the Foundation. You can’t have the fox guarding the henhouse.

Summary. This contract is not a contract to revitalize Fair Park. It is a contract to outsource the management of Fair Park from the City of Dallas.  Any revitalization plans and their implementation are up to the Foundation and so one step further removed from public view.  

Funding for those plans is set out in this contract, but without plans for Fair Park’s eventual revitalization, estimating the actual monies required to implement them are impossible to know.  What we do know is the long-form of this agreement contains $443 million of projects of which $225 million are currently projected to be funded via City bond issues ($125 million) and private donations ($100 million).  The annual ~$20 million Management Fee is not seen as a significant source for renovation or improvement monies. The source of the remaining half of the listed projects funding is unknown. And no one knows what might be required beyond that.

The City’s current contract with the State Fair should sound a claxon that the City enters into contracts without tight enough language to ensure optimal performance.

On May 13, 2016, City Auditor Craig Kinton published an “Audit of Fair Park Business Partners Oversight” that included this, “The State Fair of Texas (State Fair) contract does not clearly define “Application of Excess Revenues”. Without a clear definition of “excess of its revenues less its expenses” and “all reasonable and prudent reserves”, the City cannot readily verify the reasonableness of the amounts determined by the State Fair as available for the development and enhancement of Fair Park. “

The State Fair contract is another example of a loose contract between the City of Dallas and a non-profit organization operating out of Fair Park. The City can’t tell if it’s being ripped off or if it should thank its lucky stars.

(I hope all this reading gives you an idea why the contract, or agreement, or whatever you call it, as it stands, needs improvement.)

 

Remember:  High-rises, HOAs and renovation are my beat. But I also appreciate modern and historical architecture balanced against the YIMBY movement.  If you’re interested in hosting a Candysdirt.com Staff Meeting event, I’m your guy. In 2016, my writing was recognized with Bronze and Silver awards from the National Association of Real Estate Editors.  Have a story to tell or a marriage proposal to make?  Shoot me an email [email protected].