More Details Emerge About Lack of Code Compliance at City-Owned Stemmons Freeway Building

Last week’s meeting of the Ad Hoc Committee on General Investigating and Ethics proved that District 12 Councilwoman Cara Mendelsohn is not suffering fools. That somebody messed up by allowing employees to work for four months in a building that didn’t have permits and wasn’t up to code is an accusation she takes seriously. 

As chair of the committee, Mendelsohn called the May 2 meeting to ask questions and request an audit of the Development Services Department’s move from the Oak Cliff Municipal Center to a new building at 7800 N. Stemmons Freeway in December, only to move back to OCMC in April. 

The Stemmons building was purchased in 2022 for $14.2 million with another $5 million allocated for improvements and $1.5 million for furniture and moving expenses. 

“As elected officials, our governance role requires we understand what happened,” Mendelsohn said. “As council members, we don’t run the day-to-day activities of the city. Our role has been to be briefed by management to understand their idea of improving service and efficiency to the development community by purchasing a new building that would need minimal planned improvements, then authorizing the funds to proceed.” 

City Officials: The Only Reason For Stemmons Evacuation Was ‘Roaming Employees’

It’s the management staff’s role to carry out the actions and activities to make that vision — approved by the City Council — a functioning reality, she added. 

“Today we must learn what’s gone wrong,” Mendelsohn said in Thursday’s committee meeting. “Accountability is needed, and we must ensure the mistakes made do not happen again.” 

The councilwoman pointed out that a similar situation occurred when Dallas purchased Hotel Miramar more than three years ago and later found out the building had asbestos damage. 

“The project was stalled, and it remains unoccupied,” she said. 

Accountability And Best Practices

A lot of discussion occurred in last week’s meeting about three dozen fire code violations and the fact that city officials moved 70 employees into a building when only one floor of the 11-story tower had been cleared for use. 

Interim City Manager Kim Tolbert said her staff “fully owns the delays.” 

“This is a project that has had a lot of miscommunication,” she said. “We hold ourselves accountable for that confusion and those delays.” 

Citing Code Issues With Stemmons Building, Development Services Moves Back to Oak Cliff Municipal Center

Employees were “roaming” throughout the building and leaking information to the media about the problems with the fire code and a lack of permits. Although a lot of questions were asked at last week’s meeting, the gathering involved minimal finger-pointing. 

Assistant City Manager Robert Perez, who wrote the now-infamous memorandum saying city staff wasn’t obligated to tell employees they were working in a building that wasn’t up to code, said he oversees the bond office and “was helping with delivery of the project.” The bond office, led by Jenny Nicewander, oversees capital improvement projects like the Stemmons building. 

Assistant City Manager Majed Al-Ghafry said he was responsible for the purchase of the Stemmons property. When the Development Services Department determined it had outgrown OCMC in 2017, Al-Ghafry, a structural engineer, looked for space that could accommodate numerous departments including Public Works, Transportation, Code Compliance, and Dallas Water Utilities. 

Tolbert took over as interim city manager last week and swiftly updated the city’s organizational chart, removing the responsibility of overseeing Development Services from Al-Ghafry and adding it under a new assistant city manager, former Economic Development Director Robin Bentley.

JLL Commercial Real Estate presented a 138-page property assessment of 7800 N. Stemmons Freeway in July 2022 that identified needed improvements. 

Development Services Director Andrew Espinoza said his team was the “customer and client.” When asked what could have been done differently, Espinoza said building inspections should have been outsourced to a third party. 

“Now you have the fox guarding the henhouse, like they say,” he said. “So, outsource that, get updates from a third-party inspection group to make sure everything was done correctly, and then allow Development Services to do what they’re supposed to do, which is issue permits, not project manage.” 

Council Reacts to Staff Report on Stemmons Building

City officials directly involved in the Stemmons building purchase, the move to Stemmons, and the move back to OCMC were questioned during last week’s three-hour briefing, but we’ll stop short of saying they were grilled. 

Council members acknowledged embarrassment and disappointment in the situation but appeared to accept the reasoning that problems occurred or were identified after employees moved into Stemmons. 

“Several employees were going to media outlets, going to council members, frankly, and complaining about things that may not be true,” Al-Ghafry said. 

The assistant city manager repeatedly emphasized there were no “life and safety issues.” 

For example, some elevators are broken and the parking lot needs to be restriped. Employees complained that there were no mirrors in the women’s restroom and a broken urinal in the men’s restroom on the fifth floor, so they were accessing other areas that were under construction and reporting that the building was unsafe. The 70 employees who returned to OCMC on April 9 were not “forward-facing” employees who interacted with the public, and walk-in customers were not showing up at Stemmons. 

“I will tell you … in full transparency, some of the [employees] on the fifth floor were starting to wander around other floors, which were light construction,” he said. “It was a challenge for us even though we sent several communications to staff to please stay on your floor. They didn’t. For the sake of making sure there’s not going to be interruptions with construction areas, I made the decision to send them back to OCMC until we finish the work.”

At the close of Thursday’s meeting, the committee asked Dallas’ internal auditor to conduct an investigation of the City’s due diligence process for the purchase of the building and subsequent improvements, inspections, and permitting activities completed before the decision to start moving employees into the building, including comparing the practices observed to industry practices.

“The role of this committee is actually to complete an investigation — what happened and why, and what we can learn from it so we don’t repeat the same mistakes,” she said. “This isn’t a witch hunt. We have to understand it. We can’t continue to purchase buildings and not have a very specific checklist of things that must be required. How do we buy a building and not have an asbestos check?”