By GABRIEL GOODWIN
Sunday Times Newspapers
ALLEN PARK — The Allen Park Community Center faces ongoing debt and a third party evaluation, presented to the City Council Tuesday, showed bigger problems may be looming.
President of Leisure Resources Group Ron Reinke presented the evaluation report and said the facility, 15800 White, is operating in a deficit situation because of money owed — in excess of $200,000 — to DTE Energy and a contracted employee. He said Temple Entertainment Arena Corp. owes the utility company roughly $160,000 in unpaid electric bills dating back to 2012 and the employee is owed about $30,000.
Residents have questioned the council about the transfer of contract and a possibility of the company mismanaging the community center's finances in the past, but the council said it could not provide detailed information and would look into the situation.
City Administrator Karen Folks said the evaluation done by Reinke was meant to answer those questions. She confirmed the company's debt with the electric company and said Temple was approached by DTE to create a payment plan for past bills, but the company did not make payments under the payment plan.
Folks said Emergency Manager Joyce Parker met with Temple officials and DTE representatives to create a new payment plan that required the company to make a $50,000 down payment. At the time of the meeting, Folks said, the payment had not been made by the company and city officials are working on transferring the service back into the city’s control without the debt.
The Temple Entertainment Corporation employee referenced in the report, who wished to remain anonymous, supplied the Downriver Sunday Times with the drafted contract between him and the company. The contract — which stated the company would pay the employee $29,620 — was signed by the employee, TEC Vice President Roberto Carta, and a witness and stated the company would pay him $29,620.
The duties of the employee were not disclosed, but the employee said he has not been paid by the company. He provided a copy of a $2,800 check given to him that didn't clear due to insufficient funds.
Other documents obtained by the Downriver Sunday Times show an outstanding water bill of $15,937 owed to Allen Park. The statements show payments toward the water bill have not been made since March 2013 and the amount does not include January 2014.
Reinke said the contract between the city and Temple Entertainment is a standard contract for leasing a public facility and has clauses built in that allow a termination by default. The contract can be transferred or assigned, he said, but the company would need consent from city administration before moving forward with that process.
“The community center was initially under contract to be operated by Temple Entertainment Corporation, but the contract was conveyed to Temple Entertainment Area Corporation, in June 2013, without proper notification to the city,” Reinke said. “In my opinion, the city was neither notified 60 days before the transfer — which is required by the contract — that the contract would be conveyed to another operator nor was the city was given any documentation after the contract was conveyed.”
Dan Vasquez, operations manager for Temple Entertainment Co., said TEC originally had five partners, but three of the partners left the company, so he and Carta formed TEAC and "essentially" conveyed the contract to themselves.
Reinke said neither company — TEC nor TEAC — held up its end of the contract because the city entered in an agreement with TEC that made it responsible for the daily operations and finances associated with running the center in October 2012.
Reinke said he requested a business plan, organizational chart, mission statement, and a facility policies and procedure manual, but the documents never were provided. The company did not provide Reinke or his associates with copies of an insurance policy for the building, he said, which made him believe there is not proper insurance coverage on the building.
"It was stated by one of the management staff that a portion of the liability coverage is handled by the Amateur Athletic Union since a number of their programs and activities are athletic," he said. "In checking that, they do have coverage through the AAU, but is only covered when the building is being used by an AAU program or activity and by registered AAU members."
Reinke did note that TEAC employees are registered with the AAU but as non-athletic members and said it is unclear whether they are covered full-time. An emergency action plan was also requested from the company, but Reinke said he was told it was pending approval by the city administrator.
Folks told Reinke she never received a copy of any emergency action plan to approve, which Reinke said he believes one does not exist.
"To succeed in this endeavor of keeping the community center open, the operation must be sustainable and have a stable base of operations," Reinke said. "All the actions taken must be consistent with current laws, contracts, and expectations of the community.
"The facility was built with bonds secured through a millage being paid for by the citizens of Allen Park and they deserve to have a facility to be proud of and use."
A plan needs to be developed for the proper operation and sustainability, Reinke said, and provided some recommendations based on the information he gathered. Those recommendations included bringing in an outside auditor to review the finances of TEAC, addressing the current contract while considering a hybrid model, and conducting a "deep clean" of the building.
The hybrid model, Reine said, would allow the city to have more control over the operation of the community center, while not being completely financially responsible.
Reinke said the city needs to develop an emergency action plan and implement it "rather quickly." The ice in the arena has not been replaced in almost two years, which he said is a cause for concern because it will begin to cause the boards to warp and other structural damage around the ice sheet.
"The ice has to be removed on a regular basis," he said. "Usually, the ice needs to be changed about every 18 months to reduce the chance of damage to the concrete floor and piping underneath. It would be a tremendous investment later on to repair any damage done."
Reinke said the city needs more safeguards in place to protect them moving forward. It was his opinion that the city should appoint a full-time contract administrator to be on-site or make daily visits to ensure the contract is being followed.
He said that individual should regularly review the condition of the facility and oversee the operations of the arena.
(Gabriel Goodwin can be reached at firstname.lastname@example.org.)