Attorneys discuss center's assets: Question surrounding land ownership tops the list

With the Arts Center of North Texas likely facing dissolution, the biggest question surrounding the project is whether the land should be included in the assets split among the owner cities of Plano, Allen and Frisco.

The land, valued at up to $22 million, is the most valuable asset currently owned by the Arts Center. Outside of the land, which is located in Allen along State Highway 121 near the intersection with Custer Road, the project has only about $2.7 million in cash and investments.

Plano City Attorney Diane Wetherbee said attorneys from the Arts Center and all three cities are in the process of meeting to come up with a list of assets and options to present to their respective councils.

"We are continuing to meet and are exploring what the options are for dissolution or for a spinoff," she said. "No decisions have been made yet and the attorneys can not decide what happens next. That decision is up to the three city councils."

The question of who owns the land is more complicated than it may seem at first. What everyone agrees on is that the 124 acres were donated to the then Arts of Collin County Commission by Briar Ridge Investments in 2005. The disagreement stems from what happens with the land if the project is dissolved.

Last month, Mary Vail-Grube, the center's interim executive director, said Briar Ridge would have to approve any land transfer from the arts center to the cities. This belief was also recently mentioned at an Allen City Council meeting by Charles Nies, a vice president at Briar Ridge and a member of the arts center's board of directors. Theoretically, this would kill any attempt by the cities to sell the land and split the money.

A copy of the "Gift Agreement and Bargain Sale" provided by Vail-Grube seems to back up this belief. The agreement was signed by representatives from the center and the land donor in 2005.

Section 9(b) of the agreement states, in part, "The deed will provide that the title to the site automatically will revert to the donor if (1) title to the site is conveyed by done to any party except a nonprofit, public purpose entity unless otherwise approved by donor in writing (2) any portion of the site is used for a permanent non-public purpose without donor's prior written consent, or (3) construction of a public performing arts facility is not commenced on a portion of the site before the tenth anniversary of the closing date ..."

The issue is also mentioned in Section 13(d), which states the "done may not assign this agreement without the prior written consent of the donor."

Still, the issue is not that simple. Wetherbee said she could not comment on the contents or the enforceability of the document, but said there could be some level of dispute surrounding it.

Frisco Mayor Maher Maso said until the attorneys present their report, the city councils cannot be sure what their options are or how to act going forward. He said he feels the three cities have a strong relationship among each other, a relationship that is going to have to remain in tact regardless of how the Arts Center project ends.

Efforts to keep the assets together by spinning the project off into a separate nonprofit fell through last month when the Frisco City Council voted against the proposal. Prior to the vote, councilman John Keating said Frisco's council wishes to wind the project down as quickly as possible.

Splitting the assets would allow the cities to recover some of the nearly $12 million they have invested in the 10-year-old project. With the land included, the cities' payments would be in the millions, rather than the hundreds of thousands. If the project is dissolved, a decision will have to be made on whether the assets should be split evenly between the three cities or split based on the cities' populations, which is how the operating and maintenance costs were calculated. If the split was based on population, Plano would receive the lion's share of the money since it accounts for 56 percent of the overall population.

Copies of the Gift Deed and the Gift Agreement and Bargain Sale can be found at www.scntx.com/pdf/ACNT.pdf.

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