Walton Arts Center seeks reorganization, restructuring of governing board

With the Walton Arts Center’s plans to construct two new venues in Benton County now in place, center officials are seeking to restructure their governing board to reflect a more regional, multi-campus approach.

WAC officials this month presented a plan to Fayetteville Mayor Lioneld Jordan on what that restructured organization might look like.

According to documents obtained by Flyer staff, Walton Arts Center would like to create a new governing 501(c)(3) organization called “Arts and Entertainment Foundation of NWA,” with a new self-appointed, 20-member board to conduct operations, including oversight of all fundraising, programming, and construction of new venues.

One purpose for the restructuring, it appears, is so that the new regionally-focused board could be made up of self-appointed members, instead of members appointed by the Fayetteville City Council and the University of Arkansas. Currently, the center’s governing board is made up of five appointees each from the city and UA, along with 10 at-large appointees.

“Our documents indicate we are both an agency of the City of Fayetteville and an independent 501c(3) nonprofit,” states the proposal. “These conflicting classifications have raised legal questions about Walton Arts Center’s ability to execute its vision. We won’t be successful with either our fundraising for the $20.6 million expansion of Fayetteville or our proposed new facility in Bentonville without clarifying this issue once and for all. We owe this to our stakeholders.”

The proposal also states that the center’s largest donor – likely the Walton Family Foundation – has asked for a restructuring of governance before offering any further financial support. The donor in question apparently contributes over 20 percent of the WAC’s annual operating budget.

“We can’t be successful in our renovation of the Fayetteville campus or be assured of their long term support for our programs without their continued support,” the proposal states.

Another factor likely contributing to the desire for a restructure is the issue of donor confidentiality, and whether or not an organization considered an agent of the city and the university is subject to the Freedom of Information Act. The Walton Arts Center Council in August sought an official opinion from Arkansas Attorney General Dustin McDaniel on the issue, but McDaniel’s opinion on the matter was inconclusive.

The arts center is also seeking to secure a new, 25-year lease for its Dickson Street facility, set to auto-renew on March 30, 2017 unless one of the parties gives a one-year notice to terminate in March 2016. Under the terms of the recent WAC proposal, the lease with the city would be held by the newly-formed Arts and Entertainment Foundation of NWA, and the restructured Walton Arts Center Council would lease the property from the AEF.

WAC officials are requesting that all assets be transfered from the Walton Arts Center Council to the AEF, including all administrative management, intellectual property, mailing lists, computers, and financial assets. In return, the AEF would agree to raise $20 million for the renovation of the city/UA owned venue.

The transfer of assets, however, may be a sticking point for Fayetteville city attorney Kit Williams.

“I recommend that we request an Attorney General Opinion about the constitutionality of giving current assets to an independent corporation,” wrote Williams in a May 15 memo to Mayor Jordan.

Any restructuring of the Walton Arts Center Council, or the Walton Arts Center Foundation must first be approved by the Fayetteville City Council and the University of Arkansas Board of Trustees.

WAC officials, however, are requesting that the restructuring process begin immediately.

“Our business model depends on continued growth in the region and the expansion of our central facility, the Fayetteville Campus,” the proposal states. “The expansion and impact on the Arts will be tremendous.”

Walton Arts Center restructuring proposal

Organize Arts and Entertainment Foundation of NWA (AEF)

  • 501(c)(3) organization
  • Mission: To bring great performing artists and entertainers from around the world to Northwest Arkansas, connecting and engaging people through inspiring arts experiences.
  • Construct and/or operate venues
  • 20 member Governing Board to be self-appointed with initial board to be selected by the Council’s Nominating Committee. The Board may have I ex-officio member each from the City of Fayetteville and the University of Arkansas. Other ex-officio members may be appointed (for example: representatives from Bentonville, Rogers, the Governor’s Office, at large, etc.)
  • Members of the WAC Council may serve on the AEF Board and vice versa.
  • The Fayetteville City Council and UA Board of Trustees must approve the creation of AEF.
  • Council transfers administrative management team, intellectual property (logo), mailing lists, computers, financial assets etc. to AEF. In return, AEF commits to raise $20 million for the renovation of City/UA owned campus and venue.
  • AEF enters into a new 25 year lease with City/uA to use the Fayetteville Campus, and Nadine Baum Studios along with the transferred assets and personnel exclusively for the benefit of AEF to:
    • Manage venues
    • Book and promote arts and cultural events
    • Fund-raise
    • Manage and operate AMP
    • Employ administrative staff – CEO, COO, CFO
    • Provide education and programming assurances that would satisfy the terms of the new lease
  • Future endowments, unless specifically ear-marked, will be administered by AEF.

Restructure Walton Arts Center Council

  • New WAC Council purpose is to provide oversight of Fayetteville Campus.
  • The Council will consist of five City appointed, five University appointed, and one AEF appointed members.
  • Enters into new 25 year lease agreement with AEF for Walton Arts Center campus including the Nadine Baum Studios building and property
  • Council will oversee the physical property of Fayetteville Campus including maintenance and care, improvements and renovations. Responsibility for this will be delegated to AEF through a 25 year lease.
  • The Council could be a co-signature to the new lease agreement between AEF and the City/UA.
  • Original monies from City/UA may be transferred to new WAC Council.
  • Oversight/approval of WAC Council budget would be removed from City/UA.

Restructure Walton Arts Center Foundation.

  • The Board is proposed as three City appointed and three University appointed members plus adding six at large members.
  • Foundation may hold operating endowment funds and disburse funds as requested by Council for their use and benefit or Foundation may return endowment principal of $1.5 million to City and UA respectively
  • On occasion, Foundation will receive and hold (public) funds on behalf of AEF and Council and disburse as requested.
  • Future endowments, unless specifically ear-marked, will be administered by AEF.
  • Oversight/approval of WAC budget would be removed from its duties and responsibilities