On Thursday, the long-awaited plan to privatize Fair Park will reach the Dallas Park and Recreation Board. City staff’s recommendation hands off its management to a group overseen by the newly formed nonprofit Fair Park First, which features a board of mostly locals—the leader of a design firm, an architect, a banker, a representative for black contractors, nonprofit folks, the former president of the Dallas Arts District.
The subcontractor that will take over the park’s operations is Spectra, a Comcast-owned national corporation well versed in park management. A separate community park will be designed by the New York-based Biederman Redevelopment Ventures, the firm behind New York’s Bryant Park and our beloved Klyde Warren Park. Fair Park First will make sure goals get met, money gets raised, and neighborhoods bordering Fair Park get their voices heard as a new master plan gets drawn up. It will also manage capital improvements.
Proponents view the bid as a healthy mix of in-towners and out-of-towners with proven experience in park management, folks who have grown revenue in other public spaces through sponsorships and events and programmed content, the types of things that Dallas struggles to stuff into Fair Park over the course of a full year.
If it all goes according to plan, Fair Park would morph from a poorly used concrete island of beautiful yet decaying art deco architecture into a vibrant asset in the city center, one that binds the surrounding communities. And it’ll save the city money, somewhere between $70 million and $100 million over the next decade, just by passing off the operations. (The city had been spending about $11.2 million annually to manage the 277 acres.)
The city will still own and maintain the buildings, which is why $50 million was set aside for improvements at Fair Park in last year’s bond package. The contract calls for specific percentages of minority contractors, and, while Fair Park First isn’t mandated to retain staff, the nonprofit has agreed to interview everyone for the 72 open jobs. About 50 are currently filled.
We aren’t able to see the full contract yet; state law prevents it from being released to the public until after the City Council approves it. That’s ostensibly because of the way in which it was bid out. But you can take a look at the fully legal briefing here, and we can still ask some questions about the details of the deal. Did we miss any? That’s what the comments are for.
Fair Park First’s governing board is made up of nine people. Can that be expanded?
Yes. Darren James, the president of the Fair Park First board of directors and the head of Oak Cliff-based design firm KAI Texas, says there is no cap in the bylaws on board seats. If a need arises that requires expertise from an outside party, the board gets to decide whether to add another seat and appoint a new member. Bylaws do mandate that the board have at least nine members.
So wait. I’ve heard this Spectra deal is really good financially. Like, really, really good. If this whole operation loses money, can Spectra wiggle out of their contract? Like, stuff the board seats and vote to flee town?
The two other bids for Fair Park—from former Hunt Oil. Co. Chairman Walt Humann’s Fair Park Texas Foundation and developer Monte Anderson’s Fair Park Conservancy—asked the city to fund their entire operating expenses, which amounted to about $16.9 million and $14.8 million each year, respectively. The winning bid, in year one, asked for about $4.5 million from the city to operate the park. Over 10 years, they want just $35 million. That’s a lot less than what the competition requested.
James said this was something Fair Park First considered. And they’re comfortable with Spectra’s pro formas, which harnesses the company’s existing relationships with national entertainment promotors and sports agencies as well as their sponsorship revenue from venues in other cities that it manages.
“It’s not a concern that we believe is a realistic outcome,” James said. “Based on the expertise that we’ve seen in working with Spectra and working through their pro formas and a whole lot of what-if scenarios, we don’t see that coming to pass based on their track record in doing this internationally.”
Sponsorships? So we could be looking at the Goop Hall of State? The Toyota Women’s Museum? The AT&T Supports Equal Rights African-American Museum? The Harold and Annette Simmons Trinity Esplanade?
Fair Park First still has to follow the Park Board naming policy and is governed by the subsequent requirements of the Landmark Commission. The Park Board has to OK any re-naming, and the director has to give his or her OK on any sponsorship that exceeds five years.
The contract with the city is with Fair Park First. So what does the subcontract with Spectra look like?
James says it mirrors the Fair Park First deal. Meaning both are tied to Fair Park for 20 years, with two options to extend another five years. Fair Park First will also receive quarterly performance updates from Spectra to make sure goals are being met.
Where does the State Fair factor into this deal? Doesn’t the city have a contract with the Fair that lasts through 2028?
Yup. The City Council OK’d that resolution in 2002 and signed it in 2003. The city can issue a non-renewal notice in 2025, which would trigger negotiations. The State Fair’s governing board will need to approve or deny assigning the contract away from the city over to Fair Park First, at which point we’ll get a better idea of what the Fair’s footprint will look like in the future.
James says there have been some “preliminary conversations,” but everyone is waiting to see whether the Park Board and the City Council approve the contract before entering into more formal discussions. The Texas Department of Transportation also has a separate contract for a parking lot along Parry Avenue that will need to be assigned over to Fair Park First. Those are the only two contracts that have the board-approval stipulation, according to Ryan O’Connor, the city’s senior park and recreation manager. Fair Park First will assume control of the rest upon approval of the deal.
What is going to happen to the revenue share between the city of Dallas and the State Fair?
Per its contract, the State Fair of Texas is supposed to share “excess revenues” with the city of Dallas, which the Park Board then allocates for uses inside Fair Park. This has been the subject of some controversy in recent years. If the Fair agrees to assign the contract over to Fair Park First, that revenue share would go with it.
There is an interesting provision within the proposed contract with the nonprofit. If Fair Park First wishes to perform any capital expenditures over $250,000, it must first get approval from the Park Board and the City Council. So the city would still have a say with how that money gets used.
OK so about the Fair’s footprint. How does the Biederman park and the Fair coexist?
That’s another question for another day. The park hasn’t been designed yet, but James says that process can begin immediately after the city gives its approvals. It’ll be done concurrently with a new master plan for Fair Park. I couldn’t get Biederman on the phone, but I imagine this will be brought up in the Park Board meeting on Thursday.
James also says there’s a significant community outreach component that will need to occur, in order to hear what the community would like in the park. He did speak philosophically about what he’d like the park to be.
“There’s no defined boundary to a park, except the fact that you may have a street. There is no wall that separates the park from access,” he said. “I think the community park is a way to start to weave the community back into the park, so there’s an osmosis there. It becomes a little more porous than the defined entry points, so to speak. The community park gives the opportunity for individuals who live down the street to come and put some meat on the grill, kick the ball around, play soccer, volleyball; those are the things devoid from Fair Park right now, and I feel the community park has the ability to do that immediately so the residents feel like it’s their park as opposed to it being just for somebody else.”
So what’s the deadline for producing this park? Is there a contractor to build it? And what about the funding?
Biederman has two years to finish a new comprehensive plan and design the park. Fair Park First is leading the fundraising portion. They’ll need to raise $3 million in year one and $30 million over the course of the next 10 years. James says that’ll pay for all sorts of things: the park, maintenance, maybe some capital improvements.
OK, so the city is saving upwards of $100 million over the next 10 years by handing off operations to the nonprofit. What’s going to happen to that money?
Short answer: it’ll be allocated in the budget in the same way that money from the general fund is. So it’s not necessarily tied to Fair Park or the Parks Department, but it certainly could be if the city manager deems it best used for those purposes. Anyway, the savings won’t show up until at least a year or two after the contract is executed.
The terms require Fair Park First to launch with two reserve accounts, one for operations and another for transitions. The city is providing seed money: $500,000 for operations (pending city-approved access and investment policies) and another $2 million for transition, “for use in the event the manager is unable to meet its fundraising targets during the first three years of the agreement.” The city can also opt to help fund some early capital projects, if requested from Fair Park First. So the city is spending some money up front, but will make money later.
Here’s a more formal rundown from Elizabeth Reich, the chief financial officer for the city of Dallas:
“The Fair Park management agreement is an incredible opportunity for the City. Because the non-profit manager will substantially increase revenues and private funding for Fair Park, it will cost the City less than we are currently paying to manage the park. In the first year, we anticipate using roughly the same amount of money as we are spending on the park now to fund the transition to Fair Park First. Beyond that, the City Manager will recommend a budget each year to the City Council that uses our available resources to provide the best service to residents and taxpayers.”