Until just recently, the Women’s Basketball Hall of Fame had become somewhat of a stepchild. Its corporate parent, the Knoxville Tourism and Sports Corp, had placed day-to-day operations in the able hands of General Manager Dana Hall, but little parental attention was being given to planning and funding enhancement of the Hall of Fame’s exhibits, which are getting stale. Actually, KTSC had placed nominal responsibility in the hands of a subordinate entity, Sports Management, Inc., but it was little more than a shell with a board of directors that understood its role to be advisory and seldom met.
Following the forced departure in January of KTSC’s and SMI’s long-time president Gloria Ray, however, the Hall of Fame has gained much stronger new direction. SMI has morphed into a separate entity, Hall of Fame Management, Inc., whose chairman, David Conklin, has assembled a stellar new board of directors committed to fulfilling its potential both as a local visitor attraction and a national shrine for the sport in which the University of Tennessee’s Lady Vols have figured so prominently. The board includes: as vice chair, UT’s Women’s Athletic Director Emeritus Joan Cronan; the chairman of Bandit Lights and former chairman of the Knoxville Chamber of Commerce, Michael Strickland; the president of Regal Entertainment, Greg Dunn; the executive director of Legacy Parks Foundation, Carol Evans; public relations maven, Susan Richardson Williams; and the list goes on.
As one of the first steps toward fulfillment, Conklin wants to acquire the Hall of Fame’s iconic facility on Hall of Fame Drive, which is presently owned by Knox County and which County Mayor Tim Burchett wants to sell. Relations between the Hall of Fame and Burchett had been strained under the prior regime, but with the new board in place, they now appear harmonious. So Conklin is hoping for a negotiated sale, which is permissible if the county determines that the building is unique, which it most certainly is.
A recent appraisal conducted for the county by Donald White and Associates places its value at $4 million. Fortuitously, the new entity has almost that much in the bank reflecting what’s left of $4.2 million in donations for the hall that were received in the late 1990s when Gloria Ray was spearheading its creation, plus investment income on these restricted funds.
When Ray’s fund-raising efforts fell short of the Hall of Fame’s $8.5 million cost, she turned to then County Mayor Tommy Schumpert for help. For complicated reasons, that help took the form of an $8.5 million county bond issue of which $3.75 million remains outstanding. So a sale for $4 million would also enable the county to retire the bonds and thus wipe out the debt.
However, a $4 million outlay on Hall of Fame Management’s part would strip it of a nest egg that’s much needed to bring the hall’s exhibits up to date, especially in terms of interactivity. And a cushion could also be needed in the short run to cover the expected loss of a $150,000 annual contribution by State Farm and possibly the $150,000 a year Knox County has been contributing.
But wait, there’s more. On June 28, 2002, and again on Feb. 16, 2004, KTSC made payments of $1 million each to Knox County that were classified as “donations.” Ray is known to have believed that they would go toward eventual acquisition of the facility, which remained her goal. And it is reliably believed that she had tacit understandings with both Schumpert and his successor Mike Ragsdale to that effect. But there couldn’t be anything in writing because an agreement to sell the building on the county’s part would have tainted the validity of the tax-exempt bond issue that financed it.
With the passage of a decade and the advent of a new county mayor who wasn’t privy to anything that went before, it’s unclear whether Burchett will let the $2 million count toward the purchase price. And I’ve refrained from asking him because the question is better posed by Conklin and his colleagues on the board.
One way or another, though, Hall of Fame Management should get credit for the money that was contributed to its predecessor as a building fund. If Burchett is unwilling or unable to do so, then Hall of Fame Management should seek recovery of the $2 million that was “donated” to the county.
One basis of such a recovery is that the donation wasn’t authorized to begin with because it wasn’t properly approved by KTSC and/or because it was precluded by the terms of the contributions to KTSC that were used.
The special audit of KTSC that was conducted by Pugh and Company at Burchett’s behest under a cloud of suspicion surrounding Ray’s departures shockingly fails to address these questions. However, from examining the minutes of the KTSC board of directors and executive committee meeting as well as asking questions, I know for sure that neither of them approved the “donations” to Knox County. “I can say unequivocally it wasn’t approved by the executive committee,” says Michael Kelley, who was a member at the time while serving as the City of Knoxville law director. William Stokely III, who was then KTSC’s board chairman, has not returned my phone calls. But while it’s highly probable that he individually approved Ray’s making the payments, other lawyers I’ve consulted believe that at the very least, executive committee authorization was required for an outlay of this magnitude.
Hopefully, the Hall of Fame can be made whole without resort to legal action.