The entities responsible for running Fair Park say the cost of maintaining the 277-acre historic asset far outweighs the revenue they collect annually, especially in times of extreme weather and the complexity of refurbishing old architecture.
In the upcoming fiscal year, the park has a $3 million shortfall in its accounts, Dallas Park Board members learned in an annual report at its Thursday meeting.
Fair Park First board chair Veletta Forsythe Lill and interim CEO Alyssa Arnold briefed the board on the city landmark’s events, programming, fundraising and naming rights. Representatives from Oak View Group, the for-profit global venue management company tasked with managing the park’s day-to-day operations, presented a financial update on various revenue and expenses of the year.
Notably absent, however, were complete findings from a monthslong audit into the landmark’s finances, which was expected to come last month.
The audit has taken much longer than expected, Lill told the board, adding that it required reviewing every donation, income and expense transaction from March 2021 through the end of April this year.
While she acknowledged there had been a “comingling” of donor-restricted funds with operational money, Lill didn’t say a specific amount in question.
“I know you’re all waiting for the audit,” Lill said. “It will be completed shortly.”
Lill said she would coordinate with Ryan O’Connor, assistant director of the city’s park and recreation department, on an exact date to present the audit findings to the park board.
She clarified that despite previous talk of a “forensic audit” into the park’s finances, Fair Park First tasked Dallas-based accounting firm Malnory, McNeal & Company with an “agreed-upon procedures audit.”
Auditors have gone over 2,000 invoices. They’ve inspected expenses, donor agreements and reimbursement receipts.
The city of Dallas contracted Baker Tilly to conduct its own audit of Fair Park’s finances. It’s unclear when that audit will be made public.
Park board President Arun Agarwal lamented the agreement the city struck with Fair Park First, which then entered into a sub-management agreement with the company OVG eventually bought. Agarwal called the contract “a false promise.”
OVG’s president of venue management Greg O’Dell denied that his company misled the city about the complexities and the “enormous investment” required to manage the park. However, O’Dell did acknowledge that not all of their intentions to fundraise for operations and a capital campaign have materialized.
Agarwal acknowledged Fair Park First and OVG’s attempts at transparency and transformation, but ultimately, he told the managers of Fair Park that he wants action.
“We inherited this contract, a horrible contract,” Agarwal said. “We need a shake-up. […] People ask me what keeps me up at night. Fair Park keeps me up at night.”
Fair Park First, OVG and the park board agreed on one thing Thursday: The contracts that govern the roles and responsibilities of the three bodies need amendments for the park to have a sustainable future.
A review of the contracts showed the agreement between Fair Park First and OVG limited the nonprofit’s authority to manage the park’s operator. The contract gives OVG control over all funds that belong to the park — including money raised for improvements in and around the city’s 277-acre crown jewel.
Lill said Thursday the park needed an economic impact study and a financial plan. Fair Park First and Oak View Group’s budget for the upcoming fiscal year showed the park’s operating expenses would have a $3 million shortfall.
The board chair also asked the board for more help in building a sustainable future for the park.
“I plead with you, we need more tools to fix this park,” Lill said.
Park officials have now taken on building maintenance and upkeep of facilities and grounds and earmarked about $1 million to that end. The takeover could help close some of the shortfall.
The shortfall in revenue has been a pain point for both Fair Park First and OVG. Lill, in previous interviews, has often talked about how the original contract and bidding process potentially set up the park for failure.
Back when Fair Park First and OVG, formerly known as Spectra, were competing against two Dallas-based bidders, Hunt Oil CEO Walt Humann’s nonprofit foundation and Oak Cliff developer Monte Anderson, the understanding was that Fair Park First and Spectra offered the city the cheapest and most profitable plan for running the park.
During the bidding process, the nonprofit said it would only need $4.489 million from the city to run the park annually and a total of $34.5 million over 20 years.
The nonprofit and OVG also promised to bring more revenue than the others at $7.4 million, while the others gave figures between $3.8 million and $5 million.
In a July interview, Lill said Humann’s calculation of what it would take to run Fair Park was accurate: $11 million. That’s more than twice the figure Fair Park First gave.
Another piece of the puzzle is the understanding that a portion of the revenue generated in Fair Park goes toward paying off the debt the city took on to refurbish the Cotton Bowl.
For instance, excess revenue from the State Fair of Texas, which largely pays for capital improvements in Fair Park, is promised to flow into debt repayments for the next 10 years. The Park Board and Fair Park partners, such as Live Nation, could charge a 2% service fee on tickets. That money, too, will go into the city’s bonds.
Though that money is flowing back into Fair Park, it rids the nonprofit and OVG of a significant amount of revenue that would have paid for repairs, Lill said. In Fair Park, with its historic buildings and ever-growing laundry list of aging infrastructure, maintenance needs are omnipresent.
