The nonprofit board that oversees Fair Park said its subcontractor misallocated millions of dollars from donors. The subcontractor disputes the report.
DALLAS — Several Dallas city council members told representatives from the organizations that manage and operate Fair Park they are not open to using taxpayer dollars to make up for millions in misallocated funds.
How the money will be recouped remained an open question following a city council meeting Wednesday as the nonprofit Fair Park First and its subcontractor, OVG360, disagreed on the amount and the responsibility for the funds.
Fair Park First said an auditor found OVG360 used $5.7 million in philanthropic funds raised for capital projects for day-to-day operations instead. There are no allegations that money was stolen nor spent outside the park boundaries.
For example, the auditor said it found $1.7 million earmarked for the Magnolia Lounge and $4 million meant for the community park were spent on other operations instead.
“Fundamentally we don’t agree with the report and the $5.7 million,” said Greg O’Dell, the president of venue management for OVG360 said.
O’Dell and OVG360 said they had permission from now-former CEO of Fair Park First, Brian Luallen, to spend donor funds on invoices for daily operations.
The subcontractor provided emails which they said show multiple instances where the former CEO authorized the spending.
In one from January 2023, Luallen writes “For now, please process from our regular capital fundraising account. We are arranging bridge financing with the [city of Dallas] that will backfill that payment.”
Luallen, who was suspended, then reinstated by Fair Park First before resigning from the nonprofit, could not immediately be reached for comment.
Fair Park First said the emails don’t tell the full picture — and the structure of its contracts with OVG and the city of Dallas meant projects, vendors and invoices were all comingled and paid through OVG360 under Fair Park First’s name.
Veletta Forsythe Lill, the new chair of the Fair Park First board of directors, said the organization has set up its own bank accounts for unrestricted donations and will keep donations that come with specific earmarks in an account maintained by the Dallas Foundation.
As for the misallocated funds, Fair Park First said it wants OVG to pay them back. OVG360 reiterated it doesn’t believe the money was its responsibility.
Complicating matters, Fair Park’s finances show it is operating at a deficit again and OVG360 has indicated it may ask the city for an additional stipend.
But city council members said a bailout from the city is out of the question.
“You’re gonna look to mama to cut a check and we just can’t cut any more checks. That’s the bottom line,” said District 9 Councilperson Paula Blackmon. “Get in a room and figure it out.”
Fair Park First, OVG360 and the city all indicated they are open to renegotiating the contracts and city staff promised regular updates to councilmembers on their progress.