Probe Into City Dept.’s Botched Move To New Building Expands

Dallas City Hall | Image by Victoria Ditkovsky/Shutterstock
Dallas City Hall | Image by Victoria Ditkovsky/Shutterstock

The scope of the investigation into how Dallas allowed employees to work in a building that hadn’t received appropriate certificates of occupancy broadened on Wednesday.

The Dallas Economic Development Corporation (EDC) Board of Directors agreed to join a probe launched by the City earlier this month.

On May 17, Assistant City Manager Robin Bentley sent a memo to Mayor Eric Johnson and Dallas City Council members outlining plans to “engage” the EDC for “third-party expertise to develop a go-forward strategy for the City-owned property at 7800 N. Stemmons Freeway.” However, the $100,000 agreement between the entities required board approval.

And “the item was approved,” Bentley told The Dallas Express.

That decision follows an inquiry by members of the Ad Hoc Committee on General Investigating and Ethics on May 2, when Chair Cara Mendelsohn (District 12) grilled Andrew Espinoza, director and chief building official for the Development Services Department, about what he knew and when he knew it regarding nearly 70 employees being moved into 7800 North Stemmons from the Oak Cliff Municipal Center.

On May 3, “the EDC announced the hiring of its Chief Executive Officer, Linda McMahon, an executive with expertise in commercial real estate development,” Bentley wrote in her memo.

As previously reported by The Dallas Express, the EDC is a public non-profit corporation established in January 2022 for the purpose of attracting and developing business in Dallas.

“Given the scope of the [interlocal agreement] and Ms. McMahon’s relevant knowledge and expertise, the EDC is a natural partner to take on this important work,” Bentley’s memo continued.

The EDC’s work will involve fact-gathering, evaluation, and recommendations. By July 31, the EDC “will prepare a report” for interim City Manager Kimberly Tolbert that includes:

  • A complete assessment of the property’s condition, including information technology, HVAC, elevator, roof, electrical, plumbing, mechanical, parking garage, exterior lighting, security system, and environmental concerns. This entails a floor-by-floor review of work — complete or incomplete — “to ensure regulatory compliance for occupancy and move-in of City staff to each unleased floor.”
  • An estimated budget and timeline.
  • Recommendations framed as a “go forward plan” to complete the property renovation and move staff in by a certain date.

EDC officials are expected to present their report to the Dallas City Council in August.

Assistant City Manager Majed Al-Ghafry, in a May 17 memo to Johnson and council members, provided some background on the acquisition of the new DSD home base and the costs related to it “as a follow-up to address the additional information requested” by the Ad Hoc Committee on General Investigating and Ethics two weeks earlier.

“The City Council approved the purchase of the Stemmons Building on August 10, 2022, and the City took possession on September 23, 2022,” according to the memo.

“After several different inspections … including assessment by a third-party consultant, the Office of Bond and Construction Management (BCM) began the renovations of floors 1, 2, 5, 8 and 9. As renovation continued, the scope of work expanded when existing tenants vacated their suites in the building, when their leases expired.”

A temporary certificate of occupancy was issued on December 19, 2023, and DSD staff began moving to the fifth floor. The following February and in April, fire inspections were conducted.

“[A]s an outcome of the April 3, 2024, inspections, a fire system issue was identified as a safety concern,” the memo stated. “With the approval of Dallas Fire-Rescue (DFR) and in accordance with the City of Dallas standard practice, a Fire Watch was immediately established on April 3, 2024, as a remediation of the identified safety concern.”

Six days later, employees were sent back to Oak Cliff “until final improvements at the Stemmons Building were completed” — a scenario Mendelsohn on May 2 called ironic, considering the same officials responsible for issuing permits couldn’t satisfy the requirements for one of its own properties.

“First and foremost, I do want the committee to know that we fully own the delays” in occupying the building, Espinoza said during that meeting. “This is a project that’s had a lot of misconceptions. There’s also some confusion with the public, and we hold ourselves accountable for that confusion and for the delays.”

The director of the Office of Bond and Construction Management, Jennifer Nicewander, gave a 26-page presentation that provided a timeline of the building purchase, inspections, improvements, and budget estimates. However, she did not explain the decision-making process, prompting committee members to request a detailed timeline of the events Al-Ghafry provided in his memo.

DSD earned a reputation for inefficiency and dysfunction under former City Manager T.C. Broadnax, who oversaw periodic permit backlogs and increases in City spending, crime, and tax collection during his seven years in that position.

Earlier this month, during an interview with CBS News Texas’ Eye on Politics, Johnson said the situation at 7800 North Stemmons is “not something I’m happy about at all.”

“I think the residents of Dallas clearly deserve better than that,” he continued.

“This is not news coming from me saying that we’ve had issues [with] permitting in the City. … The city manager is directly in charge of those things and has been asked by me repeatedly to address those things. … We can’t be making the newspaper for asinine stuff like this. We have to do a better job on permitting.”

Espinoza took the brunt of the scrutiny, with committee members asking him several times on May 2 about what he knew and when he knew it, and what factored into his decisions to move into the building in December and leave it in April.

“It was a challenge to us,” Espinoza said. “We sent communication to staff to … [tell them to] stay on [their] floor. They didn’t. For the sake of making sure there’s not going to be interruptions in construction areas, I made the decision to send them back [to Oak Cliff]. There wasn’t any … incompetency. There wasn’t [sic] any life and safety issues. I just didn’t want the minutia of staff members going back and forth, going to different floors, and creating all types of stories that they perceived to be an issue. I wanted to put a stop to that.”

That became the crux of Espinoza’s argument — a point that committee members appeared to have a difficult time grasping. They also wanted access to employees’ emails they said may shed light on safety issues and concerns at the building, where City officials have spent more than $22.8 million. The staff has identified thousands of emails sent to the assistant director position “or higher” between December 18, 2023, and April 9, 2024, that contain the words “7800” and “Stemmons,” and others that include “fire,” “safety,” or “plumbing.”

“Emails have been collected by the Department of Information and Technology Services (ITS),” according to the Al-Ghafry memo. “The filter identified 5,600 emails. That list was further filtered for emails containing the words “Fire” OR “Plumbing” OR “Safety”. The additional filter reduced the number of emails to 2,268. Staff is now working to further review and identify the emails specific to safety concerns at the facility.”

Those communications are expected to be available for review by committee members on Friday.

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