Keep Dallas Observer Free

Money for Nothing

Two years ago, Ronnie Crayton believed his restaurant, located just across the street from Fair Park, would succeed for myriad reasons--chief among them, its proximity to Deep Ellum and downtown plus an "elegant atmosphere" that would allow its patrons to "unwind after work with specialty cocktails and a happy hour buffet." His business plan, which he handed over to city of Dallas officials in the fall of 2003, laid out a handful of strengths: Crayton's "perceived reputation" as a top-notch restaurateur, as former co-owner of the Bay Leaf in Deep Ellum; a "unique menu...of French, Asian and Caribbean blends"; and a "very convenient working relationship" with the Women's Museum and Music Hall across the street. Then, last but certainly not least, he insisted that "moderate pricing will allow customers to enjoy a great experience without digging too deep in their pockets."

As it would turn out, Crayton was dead wrong about that last promise.

Used to be Crayton's Restaurant and Bar, which began serving in November 2003, was open for lunch, but not anymore--not even on Fridays, when the sign outside still says it's serving, much to the chagrin of a few folks trying to get in one recent afternoon during the State Fair of Texas. Crayton can save more by locking the doors than turning on the grill. It's open for dinner only--and even then, the place isn't exactly out hustling for business. Mayor Laura Miller insists she recently called to make reservations, left her number and never got a call back.


South Dallas/Fair Park Trust Fund

And right now, the mayor's one of the last people Crayton needs to make angry, considering the city of Dallas, through its South Dallas/Fair Park Trust Fund, sank $50,000 into his restaurant two years ago and has yet to get much of its investment back.

Crayton insists he wants to make good on his loan that came from the embattled South Dallas/Fair Park Trust Fund, created by the city council some 17 years ago to allow for investment in a part of town sorely in need of new businesses, new jobs, new everything. Crayton claims he's embarrassed by the situation in which he finds himself, owing most of his original loan plus the 3 percent interest that accrues with every passing day. But thus far he hasn't been shamed into paying the city back the thousands he owes. After all, you can't pay back what you don't have.

"The trust fund board did their due diligence," Crayton says, "but it took a long time to get the loan. I was open three months before I got the loan, and I had $125,000 from private investors, something like that. We anticipated getting the [trust fund] money between construction and remodeling. Fifty-thousand dollars to a cleaners or a Subway, where you have two employees in a little 800-square-foot box, you can work that out. But $50,000 in a restaurant is not a lot of money at all."

Perhaps it's not to a restaurant owner, but to a city forced to increase fees and taxes to balance its budget, it's a small fortune. And it might be one thing if Crayton's was the only delinquent loan on the trust fund's books, but that's hardly the case.

Put it this way: You, Dallas taxpayer, not only own a small part of Crayton's restaurant in Exposition Park, but you also have an interest in several lawn-mowing businesses, a dry cleaner, a few other eateries, an automotive garage, an art gallery, a funeral home and other assorted enterprises scattered throughout the Fair Park area. And many of them, like Crayton's Restaurant and Bar, owe you a lot of money--about $350,000, give or take a couple of bucks, on recent loans that date back to 1997. City officials insist that isn't out of line with the small-business loan default rate at many commercial lending institutions. Then again, those places aren't lending taxpayer money--much of which will never, ever get paid back. Hell, some of those folks are out of business. Some can't even be found.

In other words, Dallas taxpayer, your investments stink.

But does that necessarily mean it's time to chuck the portfolio into the wastebasket? Or is there, perhaps, a more effective way of investing in a neighborhood in need?

Crayton's Restaurant is just the latest, and highest profile, example of what's wrong with the South Dallas/Fair Park Trust Fund, a relatively small piece of the city budget that's been a huge source of contention ever since it was created in 1988. The trust fund, which has given out almost $6 million over the past 18 years, doles out not only commercial loans but also grants to nonprofits, schools, clinics and other in-need programs in the Fair Park area. And for almost two decades, there has been someone at City Hall trying to kill the damned thing, insisting that at best it just doesn't work, and at worst, it's little more than a political slush fund.

In January, a city audit also revealed it to be severely mismanaged and understaffed. The report revealed that the trust fund had overstated its revenue (by some $1 million) by counting unused money as new cash each fiscal year, failed to properly monitor and administer grants given to nonprofits, granted $150,000 to two programs (including one aimed at keeping the annual Texas-Oklahoma football game at the Cotton Bowl) without proper documentation and failed to review and verify money earned by, among other sources, the Smirnoff Music Center. (The fund receives some $50,000 annually from Smirnoff, $150,000 from State Fair of Texas admissions and other money from various Fair Park facility rentals and ticket sales.)

And there are other deficiencies not pointed out in the audit, chief among them the fact that the trust fund's board, made up of council-appointed volunteers who make recommendations to the council about loans and grants, has been so small in recent years that, on several occasions, it's had to cancel monthly meetings for lack of a quorum. Board member Mary Hasan, appointed by Councilman Leo Chaney, actually works as the executive assistant to council member James Fantroy, which Miller says isn't a violation of the city's ethics rules, though she does damn the appointment as "incestuous." (In the interest of full disclosure, my father, Herschel Wilonsky, has been on the board for four years but was not interviewed for this story.)

The city has "never, ever fully supported the trust fund," says former trust fund Chairman Dwaine Caraway, appointed by former Mayor Steve Bartlett in 1991. "See, we functioned with a full board. We had 15 people. But if you look and see what's taken place now, they've been operating with as few as six people. Is that the board's fault, the trust fund's fault or the council's? If they really wanted it to work, what would they do? They would make appointments. And as far as I am concerned, that hasn't taken place. The blame could be laid at a number of people's doorsteps, but it's a shared blame."

Miller's been trying to demolish the fund for years, often dismissing it even during her days as a journalist as nothing more than a fund controlled by the councilperson in whose district Fair Park lies. And she's been branded a racist by South Dallas politicians each time she suggests that perhaps the city's money could be better spent in the area than pouring it into businesses that can't pay their bills.

"Like so many things in this building, it instantly becomes a fight about race, about poor versus rich, North Dallas versus South Dallas," Miller says. "As soon as you say, 'South Dallas/Fair Park,' you get, 'No, no, no,' and then there's yelling. It's the most volatile combination."

The mayor was reminded of this again at the end of September when Miller, with an 8-7 vote from the council, stripped the city's general-fund contribution of $281,000 from the fund's $640,000 budget in order to pay for police surveillance cameras in the Fair Park area. At a September 19 meeting at City Hall, council member Maxine Thornton-Reese pounded on the table and shouted at Miller, "You're always trying to take away from African-Americans!"

"I'd like to challenge the mayor to stay in South Dallas for two weeks, to deal with the problems they have down here," says Chaney, in whose district Fair Park lies. Chaney waited more than a week to respond to an interview request for this story; he says he feared it would be just one more "negative" story about "a few troublesome loans" rather than the good Chaney insists the fund's done over the years. He also blames the mayor for the trust fund's failures in recent years, pointing out that she's neglected to appoint a full-time chairman for the last three years, which Miller doesn't deny, insisting, "quite candidly, it's always been my impression that the real chair of it was the council member, anyway."

There's less back-and-forth at a tennis match.

"I think the millionaire mayor's attitude would change, and she'd understand why it's so important [to] make the trust fund an economic tool, which it could be and has been with the exception of the few troublesome loans," Chaney says. "I live here. I feel the people's pain."

Pain is precisely what you receive when you bring up the subject of the South Dallas/Fair Park Trust Fund, which is understaffed, overworked but never overlooked by those seeking to protect their small piece of this pie. That is, perhaps, to be expected whenever one broaches a subject that consists of the Holy Trinity of hot-button issues: race, money and politics. From nowhere, gadflies and self-proclaimed community activists and former trust fund board members and chairpersons call to offer their opinions about the fund--not because they've been asked, but merely because they somehow heard that the Dallas Observer was working on a story about it.

A UFO the size of Texas Stadium has a better chance of flying beneath the radar than the South Dallas/Fair Park Trust Fund, yet so few know so little about its actual mission and accomplishments and, alas, its many, many failures.

The South Dallas/Fair Park Trust Fund, created in part by former city council member Diane Ragsdale, was intended to do one thing: transform the Fair Park neighborhood from a wasteland to a Promised Land. Yet the area looks as it did in 1988, if not worse--a collage of weeds and litter and broken glass and gutted storefronts and empty promises. Which is not to say there have not been success stories down here, but often the tales have sad endings: Loans are defaulted on, grants are wasted, hopes are dashed.

The man who administers the fund--who gets blamed when a loan doesn't get paid back or when a grant recipient takes the money and runs--is the first to admit there is a problem with it. Leo Barron Hicks, an attorney and the third administrator in five years, has no choice but to accept the responsibility; the proof's in the paperwork that piles up on his desk and the desk of Assistant City Attorney Charles Black, whose job it is to chase down those who have defaulted on loans.

Hicks never wanted the gig. He was working for the Office of Economic Development in January 2004 when he was tapped to administer the trust fund--a job he took because, hell, he figured it was just his turn. He got more than he bargained for: a bunch of bad loans, a stack of sketchy grants and his own chapter in a tumultuous tale.

Hicks, who must answer to both the community and the council, is in a tight spot. He must appease those in the neighborhood who demand more and more money from the fund, and those at City Hall who want it brought under control lest it keep leaking precious dollars down a drain that looks more like a rat hole. He wants big things for South Dallas--more stores like Walgreen's and Minyard's, which, in recent years, have sprung up across from Fair Park like roses in the desert--but is perpetually bogged down in the small turf wars fought between two groups of "stakeholders," to use Hicks' term, that keep anything from getting done.

On a warm fall evening, with the State Fair of Texas hopping just down the street, Hicks sits in the South Dallas/Fair Park Trust Fund's offices in the Martin Luther King Jr. Recreational Center. He's a thin man, whose suit and tie look a size too large for him. He looks tired, too, not just because he's at the end of the day, but because he's at the end of his rope--tired of being blamed by the mayor for the trust fund's failures, tired of being yelled at by community residents who demand their few thou, tired of having to run the fund almost single-handedly as a result of budget cuts that have left him with one part-time employee and one temp.

In front of him Hicks keeps a binder of papers bearing such headers as "Trust Fund Talking Points" and "Vision." Among the talking points, many of them written in bold letters, are such things as, "No One has Ever Been Harmed By the Trust Fund," "No City Resources Have Ever Been Lost, Misplaced or Misappropriated by the Trust Fund" and "The Story is Not What the Trust Fund Has Not Done--But What The Trust Fund Has Done." Occasionally, Hicks will answer a question by reading directly from the binder. And occasionally, he will use florid, overwrought language, the poetics of politics and then some. But he does have a particularly good read on why the trust fund ain't workin'.

"I think the community has been underserved historically, and there are certain [parties] that think they are entitled to the trust fund," he says. "And without saying that's good or bad, I think it's a fair representation of one group of stakeholders. The other group of stakeholders you might call 'the city,' for lack of a better word, and this particular group elevates form and procedure and the process over results. So one group is concerned about substantive outcome, what actually happens, and one is concerned about the procedural process by which to make it happen.

"Everybody agrees on the goal, and that's to make this a thriving community, but there are fundamental differences on how you make that happen. And because the differences are so irreconcilable, it's almost like two tectonic plates that collide into each other, and that produce earthquakes. And when they collide, that collision produces a great deal of energy, a great deal of friction, a great deal of heat but, sadly, no light. I think what the trust fund needs is not the heat but the illumination."

What he means is this: City officials have never liked the fund, because some believe they were guilted into creating it, and Fair Park residents have always loved the fund, because they believe it's nothing more than money owed them all these years.

The South Dallas/Fair Park Trust Fund began as little more than a recommendation of a commission assembled in the late 1980s by Ragsdale, among the most polarizing figures in recent city politics, which is to say, she was loved in South Dallas, where she helped to launch the Inner City Development Corp., and feared in North Dallas. In 1987, the council adopted the South Dallas/Fair Park Neighborhood Preservation and Economic Development Plan, of which the trust fund was an essential piece, and in 1989 it began distributing money--$200,000 of which came from the city's general fund, with other contributions coming from Pace Concerts (which owned the concert venue formerly known as the Starplex Amphitheatre), State Fair of Texas ticket sales and other revenue generated by Fair Park.

"Fair Park was an isle of plenty in a sea of poverty," Ragsdale says now. "People would say, 'Well, when you have different events there, it benefits the community,' which was bunk. If anything, the fair discouraged business because of the traffic and the noise...What we said was we need to be more direct, and that means we will create a fund from revenue generated by Fair Park to benefit the residents and businesses in the area."

But almost from the very beginning, the trust fund was under attack: In 1992, then-Councilman Chris Luna suggested to his colleagues that they kill the fund, which he (and others, though less vocally) believed to be little more than a private slush fund for council member Charlotte Mayes, who beat Ragsdale in the 1991 council election. Mayes made it easier for folks to get those grants, which they didn't have to pay back, and some on the council, like Luna, believed Mayes used the trust fund "to reward campaign supporters in a fierce battle to retain her council seat," according to a March 11, 1993, story in The Dallas Morning News. Mayes, who served four terms on the council and died last year of leukemia, denied the allegations, and for his efforts, Luna was branded a "Tio Taco" by then-Councilman Al Lipscomb.

Back then, both private businesses and nonprofits were eligible for grants they didn't have to pay back. And it seemed to work, too, especially for small business owners to whom $10,000 was a fortune--like, say, Henry Smith, who owned Eagle Trophies on Martin Luther King Jr. Boulevard till he retired last year. According to former fund Chairman Caraway, Smith took his $10,000 and bought an engraving machine, which meant that no longer would he have to do everything by hand.

"He said to me, 'Thank you, son, now I can bid on contracts,'" Caraway recalls. "And he would be up in his shop late at night--he was on top of Grant's Barber Shop--and you could hear the computerized machine buzzing. It cost him $7,000, but look how that money was used. It changed his entire business and his entire life." (Smith, who closed his shop last year, couldn't be reached for this story.)

Albert Black Jr. got such a grant from the trust fund in 1991, when he moved his On-Target Janitorial Services from Rowlett to Logan Street off Martin Luther King Jr. Boulevard. Black, who had grown up in Frasier Courts housing projects and whose father worked as a doorman downtown, used the money to hire new employees and renovate the building, which, he says now, "wasn't much, but back then, every day, man, we were waiting for something good to take place." Black would eventually get his master's degree at the SMU Cox School of Business, change the business from janitorial services to a business supply and service company and open offices in Houston and San Antonio.

"The impact [of the $10,000 grant] is still something we consider very, very important to us," says Black, who in 2000 became the first African-American to chair the Greater Dallas Chamber of Commerce board of directors. "It created a momentum we're still building on. The trust fund was a catalyst for turning three employees into the largest African-American employer in the region--we have 169 full-time employees--and we think that's the kind of impact that allows us to say we've delivered. You're supposed to employ people with that money, add to the tax base. And I realize our story is not what the reputation of the fund is, and we may be a unique story, but it's not a story that can't be replicated over and over again. We expected to do real well because of the support we received from the trust fund, and we believed we were going to be held accountable if we did not deliver."

Five years after Black got his grant, business was so good that he renovated another warehouse, this time a 160,000-square-foot building on South Madison Avenue--in Oak Cliff, where it's well out of the area served by the South Dallas/Fair Park Trust Fund.

There is an obvious question: How is it one man can create a multimillion-dollar business out of $10,000 and another can find himself bankrupt, or at least on the desk of the city attorney, with $50,000 in his pocket?

To answer it, perhaps you must go back to 1993, when the city council was forced to overhaul the trust fund when it was revealed that its all-volunteer board approved 49 grants that it couldn't afford to pay out, lest the thing go broke. There was another problem, too: It had become too easy for businesses to get the grants and harder for nonprofits. The fund, wrote Lori Stahl in the News, had shifted "away from its grassroots focus," which the council fixed by making businesses ineligible for grants they didn't have to pay back. Now they would be allowed to borrow as much as $20,000 from the fund. Meanwhile, Fair Park-area residents could get grants for home improvements, and nonprofits could get anywhere from $10,000 to $50,000 over a three-year period.

Not that Caraway believed it needed to be fixed. "When I was on the board it was moving forward," he says. "Since that time it's taken a dive." Nevertheless, for a while it appeared the trust fund could be trusted.

But the business loans started getting bigger, ballooning to the $50,000 they are at present. And folks lined up to get them, from Leon Batie, who would open a Subway franchise on Grand Avenue, to dentist Michelle Morgan to Al Davis, whose 40-year-old Davis Apparel on Martin Luther King Jr. Boulevard began supplying uniforms to companies in the late 1980s. These would be some of the trust fund's bigger success stories, people who came forward with legit, viable plans and used their trust fund money wisely. All would eventually pay back their loans--and then some, with Davis Apparel being due some $4,489 in overpayments.

But then there were the "troublesome loans" Leo Chaney would like to ignore--those who took their seed money and planted it six feet under. They're the businesses that give the South Dallas/Fair Park Trust Fund a bad name and a bad rep, the ones that owe a combined $350,000 and, in some cases, haven't even made good faith efforts to repay a small portion of their loans. There's a gallery called Art on the Boulevard, Collins Lawn Service, an eatery called Lady Di's, McFarland Gardens, Premium Custom Cleaning, Spears Seafood Market and, of course, Crayton's Restaurant.

Charles Black, the assistant city attorney charged with collecting this money, says at any given time he has five to 10 trust fund files on his desk; he only recently received Crayton's. Some wind up in court, including a case filed against Dianne Thomas, who borrowed $15,000 in July 1999 to open Lady Di's Restaurant and Catering and still owes almost $12,000. The city settled its suit with Thomas in September, but Black says, "I have no idea whether it will be paid...We'll see if it comes to fruition."

In the case of McFarland Gardens, a lawn care and landscaping business, Black claims the Dallas County Sheriff's Department has been unable to find owner Richard McFarland. When they do, he says, "I will continue to try and collect." McFarland borrowed $50,000 in August 2000 and owed, as of August 1, 2005, $41,500.

And then there's Spears Seafood, which borrowed $50,000 in July 2002 and now owes $52,870 the city isn't likely to collect, since owners Xavier and Verna Spears have filed for bankruptcy.

But here's the kicker: Crayton--and Ragsdale and Caraway and even Albert Black--all insist that $50,000 is just enough money to do one thing: get you in deep, deep trouble.

See, Black says, with $10,000 in grants, which you don't have to pay back, a business owner has to be careful, thoughtful about the investment. It's just enough to do something, but not everything. You can hire a couple of employees, pay for a few small renovations, invest in an important piece of equipment, maybe help secure a larger loan with a traditional lender. Better still, there's no threat of legal action hanging over your head if you screw it up. It's the ol' win-win: You make something of the cash, great; if not, well, hey, we tried.

"One of the reasons that people wanted to stop providing grants was because we needed a way to generate money," Ragsdale says. "When you got $10,000 and $15,000 grants, you could have seed money without wondering about how you were going to pay it back. It's small seed money, but it helped."

But $50,000 loans, well, they come with more than strings attached--3 percent interest over five years. As more than one person says, it comes with just enough rope with which a business owner can hang himself.

"Albert Black probably didn't need it, but if you look at some of the $10,000 grants that were given versus the $50,000 loans, goddamn, come on," Caraway says. "Which is better served? These people are still in business. Now, not all of them are. Not all of the grants were great. We probably had some shysters in there. But I would much rather help a person pull up their bootstraps with $10,000 and try to do better versus giving them just enough to hang themselves, which is what makes me different from the rest of those son-of-a-guns."

The top board members who approved most of the now-defaulted loans insist they were good loans at the time--risky, absolutely, but what could one expect from folks who came to the South Dallas/Fair Park Trust Fund after other institutions had turned them down? Not for nothing do the trust fund's opponents and supporters refer to it as "a lender of last resort."

"You had to look at the spirit the commercial loans were set up for," says architect Todd Howard, who resigned as the trust fund's co-chair in April 2003, as did co-chair Harold Woods, South Dallas business owner John Radovich and Delphine Ganious, who was in charge of overseeing the grant applications. The quartet left after a run-in with Chaney, who didn't approve of the grant recipients they'd chosen and wanted them to "start from scratch," according to one of the four former board members. This, coupled with a community forum at Charles Rice Elementary that spring that turned into a shouting match between some board members and community leaders, caused the foursome to walk out the door, believing their time had been wasted and efforts taken for granted. Chaney says only that they resigned because of a "misunderstanding," and that he was trying to fix the trust fund by eliminating red tape that, he says, held up the dispensing of loan and grant money.

"The loans were to encourage economic development within the census tract," Howard says. "You looked at that, at the application and you interviewed them. Were they running 700-plus credit scores? No. Most were 400 or so, but there was a story presented...and they worked. They worked to concur with the spirit and purpose of the loan committee and why it was there. If they were businesses that had been supported, they would have worked. I think part of the challenge was, could these businesses go into an area where it's challenging for businesses to grow and thrive and succeed?"

The answer, in most cases, was no.

Which brings us back, for a moment, to Ronnie Crayton. When his loan came before the trust fund, no one on the board considered it a bad loan--far from it, in fact. He was a legit businessman wanting to make a go of it in a part of town that could only benefit from having a black-owned supper club, and not only that, but his restaurant is perched not in the bleakest parts of South Dallas, but on the bright and shiny corner of Exposition and Parry avenues, near bars and hangouts populated by urban hipsters and their wannabe suburban brethren. And it was a place where, on any given day, diners might bump into Dallas County Commissioner John Wiley Price or former Mayor Ron Kirk.

Crayton applied for his loan in August 2003, and though he now says the loan of $50,000 was too small, and that it took too long to get it, he received the maximum amount allowable, the most macro of the fund's so-called "micro loans." When he took the money from the city on December 11, 2003, Crayton agreed to begin paying back the city $898.43 for 60 months, beginning February 2004; his final payment is due January 1, 2009.

Problem is, Crayton is about $12,000 behind on his payments to the trust fund, with hundreds of dollars in interest and fees accruing every day. He has not made a payment toward his loan since August 9, 2005, when he cut the trust fund a check for $200. A few weeks ago, his loan documents were handed over to the City Attorney's Office, which will try to collect from Crayton--even if it means filing suit against the restaurant owner.

Even so, says trust fund administrator Leo Hicks, "Crayton's Restaurant was a grand experience. Heretofore, to the best of my knowledge, there was not a supper club that provided an upscale dining experience for the residents of South Dallas. Crayton's filled that niche, and he did a good job of filling that niche, and the trust fund still looks forward to working with Crayton's. We want that to be successful. It does provide a valuable service. We're working to do so. I don't think that the last chapter has been told about Crayton's. We still have high hopes with that, and we will work with them to the best of our ability."

Hicks is reminded that during this interview he said he didn't even know if Crayton's was still open for business.

"I don't know what I'm gonna eat for dinner tomorrow," he says, smiling, "but I do know that I'm going to eat something tomorrow."

The man is nothing if not eloquently cryptic.

Fact is, the South Dallas/Fair Park Trust Fund might be a moot point by year's end: Assistant City Manager Ryan Evans, who readily acknowledges the trust fund doesn't work, has proposed turning some 300 acres around the Fair Park area into yet another of the city's tax increment financing reinvestment zones, to be called the Grand Park South TIF. A September 2005 feasibility study, conducted in part by former City Manager George Schrader, acknowledged the city's lousy history of proposing solutions for South Dallas and then abandoning them, including a 1995 Fair Park Gateway Revitalization Concept Plan, which led to the building of one successful housing development, Eban Village, but little else of change-making substance.

"The area still lacks the necessary public amenities, upgraded infrastructure, enhanced image and critical mass needed to create an environment that will stimulate private development" in the area, the study concludes. In short, the neighborhood needs not only quality and affordable housing, but the basics--"significant office, retail and service facilities," which means more than one decent Subway sandwich store on Grand Avenue. And one way to achieve all that, the report insists, is through a TIF that would reinvest tax money paid by businesses within the 300 acres back into the neighborhood.

In short, no longer will the city be in the business of loaning money to businesses that probably won't be around long enough to pay the city back.

"The mission of the trust fund was noble," Evans says. "It was good to do loans and grants in a lower-income neighborhood, but it doesn't work by itself. We're now looking for a developer to take it on. And it wouldn't be a trust fund any longer. We're going to call it a redevelopment fund that would work with the TIF. From the staff's point of view, there has not been, till lately, the intestinal fortitude on the part of the elected body to change this, and I am pleased the council says we need to go in a different direction with this thing. You just can't have a fund for loans in a neighborhood that can't support the businesses run by businessmen who have no experience running a business. The loans don't make sense."

Evans, who is working to fix the fund with recently hired Office of Economic Development Director Karl Zavitkowsky and his second-in-command Lee McKinney, does hint that perhaps grants will remain as part of the fund, which Chaney will demand. But for all the good work folks in the community insist they've done--funding substance-abuse programs, building football fields, allowing the occasional homeowner the chance to fix a sagging roof--they're almost as problematic as the loans.

According to one former trust fund board member, many of the grants given out aren't being used properly. She recounts having to quit her neighborhood association when she discovered part of a $5,000 grant was going toward refreshments at a get-together--and not, as it was supposed to, toward making the neighborhood safer.

"My name was on the checking account," says the former board member who asked not to be named. "And I didn't want to go to jail if someone started coming around to see if the money was being used appropriately."

But who was going to know? It's not like anyone's checking to see if the money's being used correctly. It's putting the "trust" in trust fund--not such a good idea.

Take, for instance, the case of J. Daytona Burch.

In May 2005, the trust fund board approved a $22,750 "community-based nonprofit grant" for something called the Dr. Burch Arts and Magnet School. Not two months later, Leo Hicks sent Burch a letter informing him that his grant was to be suspended. As it turned out, on July 7, Hicks learned from the director of the Jeffries Street Learning Center, which has received more than $100,000 from the trust fund, that Burch was trying to operate his school out of their facility, even though he told the trust fund's board he was going to use a building on Second Avenue near Fair Park--going so far as to present a lease that Hicks learned Burch didn't actually have.

In his letter to Burch, Hicks writes that he also got a call from someone at the Texas Workforce Commission, who "advised that former employees of the Magnet School have filed a claim against you for unpaid wages and that you informed said employees that they would receive their wages upon receipt of the grant." This was a huge no-no: Before handing over the grant, Burch had signed a contract stating that the money was to be used for funding the tuition of students.

Hicks refuses to acknowledge that he and the board were duped by Burch or that the money would have been lost forever had he not gotten those two calls.

"The letter didn't say he lied to us," Hicks says. "The letter said that we found out some additional information. I won't disparage anyone. I just think your interpretation is something I don't agree with."

Burch could not be reached for comment.

And then there's the case of Derrick Mitchem, who got a $29,000 grant in 2001 to open his motor sports museum in the old Bama Pie Co. building on Pennsylvania Avenue across the street from Fair Park, in a neighborhood where it sits next to abandoned, weed-strewn lots. Mitchem's been trying to get the museum open since 2000, when he bought the building for $50,000 and said he'd need $600,000 to rehab the place. Yet after getting trust fund money, as well as $290,000 from the city in community development block grant money and another $45,000 from the South Dallas Development Corp., the place looks like an abandoned construction site and nothing more.

Sources say Mitchem's delay is making the trust fund "nervous," because the grant was supposed to be used within a year of its being received--and he is way overdue, to the tune of four years.

I Support
  • Local
  • Community
  • Journalism
  • logo

Support the independent voice of Dallas and help keep the future of Dallas Observer free.

Mitchem couldn't be reached on his cell or home numbers, but Chaney insists it will be open by the holidays.

"Maybe," says Caraway, "but who in the hell wants a motor sports museum right there? Black folks ain't interested."

Hicks insists he welcomes any changes Ryan Evans or Zavitkowsky or McKinney or the mayor want to throw his way. Fact is, he's exhausted by the last two year's worth of fighting--tired of being scapegoated by city officials who blame him for the fund's failures and tired of being dogged by folks in the neighborhood who line up each May for the grants handed out like early Christmas presents.

"I know there will be some changes," he says. "I know that the process by which we will arrive at that will be prudent, that it won't be instantaneous and that it will happen in the fullness of time. But there will be some changes to the trust fund. I think they are necessary. I think they will be appropriate. I don't think the changes will be without conflict because growth is conflict. I think there will probably be some new rules and procedures, a tightening-up process. There will be more due diligence before the money is given out, more stringent requirements. I think to some extent there will be a lessening of the mindset and practice of the 'lender of last resort,' and I think the change in that mindset will be unsettling." He smiles, then offers with deadpan understatement, "It should be interesting. "

Keep the Dallas Observer Free... Since we started the Dallas Observer, it has been defined as the free, independent voice of Dallas, and we would like to keep it that way. Offering our readers free access to incisive coverage of local news, food and culture. Producing stories on everything from political scandals to the hottest new bands, with gutsy reporting, stylish writing, and staffers who've won everything from the Society of Professional Journalists' Sigma Delta Chi feature-writing award to the Casey Medal for Meritorious Journalism. But with local journalism's existence under siege and advertising revenue setbacks having a larger impact, it is important now more than ever for us to rally support behind funding our local journalism. You can help by participating in our "I Support" membership program, allowing us to keep covering Dallas with no paywalls.

We use cookies to collect and analyze information on site performance and usage, and to enhance and customize content and advertisements. By clicking 'X' or continuing to use the site, you agree to allow cookies to be placed. To find out more, visit our cookies policy and our privacy policy.


Join the Observer community and help support independent local journalism in Dallas.


Join the Observer community and help support independent local journalism in Dallas.