Final Judgment on The Arts Center of North Texas

8/10/2019 Final Judgment on The Arts Center of North Texas

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INRE:

THE ARTS CENTER OF

NORTH TEXAS

CAUSE

NO. 199-00002-2014

IN THE DISTRICT COURT

199th

JUDICIAL DISTRICT

COLLIN COUNTY, TEXAS

FINAL JUDGMENT OF MODIFICATION AND DECLARATORY RELIEF

On this day came on to be heard the Original Petition for Modification and Declaratory

Relief, filed in this Court by The Arts Center of North Texas ( Petitioner ). Petitioner appeared

by and through

its

attorneys of record. The City of Frisco, Texas ( Frisco ); The City of Allen,

Texas ( Allen ); The City of Plano, Texas ( Plano ); and Greg Abbott, the Attorney General of

the State of Texas, have filed Waivers in this proceeding. Respondent Janice Brittingham

( Brittingham ) appeared by and through her attorneys of record. This Court, having considered

the pleadings and the Waivers filed by Frisco, Allen, Plano, the Attorney General, and

Brittingham, and having heard the arguments

of

counsel, makes the following findings:

1. This Court has jurisdiction over this action, and venue for this proceeding is

proper in Collin County, Texas pursuant to Section 15.002(a)(l) of the Texas Civil Practice and

Remedies Code.

2.

This Court, acting in equity, has the authority under the doctrine of cy

pres

to

modify a restriction on the purpose of a charitable gift if the restriction has become

impracticable, impossible and/or wasteful.

3.

Petitioner was formed in 2004 as a local government nonprofit corporation

incorporated under Section

431 of

the Texas Transportation Code, Chapter 394 of the Local

FINAL JUDGMENT OF MODIFICATION

AND

DECLARATORY

RELIEF

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Filed: 12/2/2014 2:23:36 PMAndrea S. ThompsonDistrict ClerkCollin County, TexasBy Lucy Van De Loo DeputyEnvelope ID: 3347095


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Government Code, and Chapter 22 of the Business Organizations Code. It was formed for the

purpose of aiding, assisting, and acting on behalf of the cities of Allen, Texas, Plano, Texas and

Frisco, Texas (hereinafter Cities ) in the performance of their governmental functions to

promote the common good and general welfare of the Cities and to promote, develop, encourage

and maintain cultural facilities, commerce, and economic development in the Cities. The

original Articles of Incorporation continued that Petitioner was organized to aid, assist and act,

on behalf of the Cities by financing, constructing, owning, managing and operating performing

and visual cultural arts facilities, together with land and improvement related thereto, and other

cultural facilities.

4.

Petitioner's Articles of Incorporation were amended on July 14, 2006 to update its

purpose statement to include the following along with its initial purpose statement:

The Corporation is organized and shall be operated exclusively

for charitable, scientific, educational, public and/or cultural

purposes to the fullest extent permitted under both the Act and the

Internal Revenue Code

of

1986, 26 U.S.C. 50l(c)(3) or any

successor statute, as the same may be now or hereafter amended.

No part

of

the net earnings

of

the Corporation shall inure to the

benefit of any private individual,

no

substantial part

of

the

activities

of

the Corporation shall be the carrying on

of

propaganda

or otherwise attempting to influence legislation (except as

otherwise permitted by 26 U.S.C. 501), and the Corporation shall

not participate in, or intervene in (including the publishing or

distributing

of

any statements), any political campaign on behalf of

(or in opposition to) any candidate for public office.

On June 27, 2011, Petitioner's name was changed from the Arts of Collin County Commission,

Inc. to The Arts Center

of

North Texas.

5.

At all times since its formation, Petitioner has been governed by a board

of

directors composed of representatives from each of Frisco, Allen, and Plano (the ''Cities ) with

FINAL JUDGMENT

OF

MODIFICATION AND DECLARATORY RELIEF

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the goal

of

constructing and maintaining an arts hall and park (the Arts Center ) to support the

arts and culture activities

of

the Cities.

6.

Voters in each

of

the Cities approved providing approximately $19 million in

public bond monies to fund Petitioner and develop the Arts Center.

7. Beginning in 2002, funds were raised for a regional arts and cultural facility in

North Texas. The original fundraising vehicle was the Arts

of

Collin County Foundation, a

private fundraising entity whose primary purpose was promoting the fine and performing arts

within Collin County, Texas, by establishing an entity charged with the responsibility

of

providing for the raising

of

the necessary capital and operational funding and obtaining

of

the

necessary endowment to construct, operate, and maintain a rehearsal, display, and performance

facility reflective

of

the present and future educational, artistic, and civic needs and tastes

of

the

citizens

of

Collin County, Texas. Consistent with its specific purpose, the Arts of Collin County

Foundation, on its dissolution, transferred its remaining assets to Petitioner to be used as part

of

the capital campaign.

8.

Since its formation in 2004, Petitioner has also raised funds for its purposes, and,

more specifically, the Arts Center. As part

of

its fundraising efforts, Petitioner undertook

various solicitation campaigns designed to raise private support for its operations and financing

and construction of the Arts Center. Among its efforts, Petitioner conducted the BRAVO

Capital Campaign, a continuation of efforts by the Arts of Collin County Foundation program

under the same name, the Pave-the-Way to the Arts Campaign, allowing donors to choose an

inscription for a brick paver to be installed at the Arts Center, and the Best Seat in the House

Campaign, allowing donors to choose an inscription for a plaque to be placed on a seat inside the

Arts Center. In addition to these named campaigns, Petitioner received funds through North

FINAL JUDGMENT OF MODIFICATION AND DECLARATORY

RELIEF

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Texas Giving Day, sponsored by Communities Foundation of Texas, events hosted by

supporters, and many other private gifts. Some donations were given based on a pledge

agreement specifying that the funds could be used for any purpose permitted by the Articles of

Incorporation and Bylaws

of

Petitioner, others were given with pledge agreements containing no

such language, some donations contained express restrictions that they be used for construction

and related expenses of the Arts Center, and other donations were simply in the form of a check

or online contribution. Accordingly, some of the funds held by Petitioner are unrestricted, while

others are subject to restrictions as to their use. The funds held by Petitioner subject to

restrictions (the Restricted Funds ) are the subject

of

Petitioner's request for modification.

9.

In relation to its fundraising efforts, on July 18, 2005, Petitioner entered into a

Gift Agreement and Bargain Sale (the Gift Agreement ) with Briar Ridge Investments, Ltd., an

investment vehicle

of

Brittingham. The Gift Agreement describes a plan for the donor to deed to

Petitioner an approximate 124 acres, which would include up to

12

acres

of

land to be retained

by the donor to

be

used for retail/hospitality/entertainment sites. The Gift Agreement provides

that the deed conveying the property (the Deed ) is to include a provision that title to the Site

automatically will revert to Donor if (i) title to the Site is conveyed by Donee to any party except

a non-profit, public purpose entity unless otherwise approved by Donor in writing, (ii) any

portion of the Site is used for a permanent non-public purpose without Donor's prior written

consent, or (iii) construction

of

the public performing arts facility is not commenced on a portion

of

the site before the tenth anniversary

of

the Closing Date unless extended by mutual agreement

by both parties.

10. The Gift Agreement defines the donor as Briar Ridge Investments, Ltd.; however,

at the time the Gift Agreement was executed, Briar Ridge Investments, Ltd. was not the owner of

FINAL JUDGMENT OF MODIFICATION AND DECLARATORY RELIEF

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the land. Rather, Brittingham owned the real property in her individual capacity. Ultimately, it

was Brittingham (the record owner of the property) who executed the Deed conveying the

approximate 124 acres to Petitioner. However, despite the language of the Gift Agreement, the

parties failed to include the agreed-upon reversionary provision in the Deed. The signatories to

the Gift Agreement have communicated to Petitioner that failure to include the reversionary

provision in the Deed was an inadvertent mistake, and Petitioner has no records to suggest

otherwise.

11. On May 14, 2011, an election was held in the city of Frisco on a proposition to

revoke the city's authority to issue bonds on the Arts Center project. The proposition narrowly

passed, revoking the city

of

Frisco's authority to issue the additional $16 million

of

bonds it had

initially contemplated. Thereafter, all three of the Cities ceased funding the ongoing operation

and maintenance expenses of Petitioner.

12. As a result of the uncertainty regarding continued public support of the Arts

Center project, private donations also slowed. Ultimately, the decision was made for Petitioner

to abandon the Arts Center project and terminate its corporate existence. Based on the interplay

of Chapter 431 of the Texas Transportation Code, Chapter 394

of

the Texas Local Government

Code, Chapter 22

of

the Business Organizations Code, and Petitioner's dissolution provision in

its Restated Articles

of

Incorporation, Petitioner was obligated to marshal its assets, pay its debts,

return property held on a condition requiring return, transfer assets required to be transferred, and

thereafter distribute its remaining assets. At all times since its formation, Petitioner 's Articles

of

Incorporation have provided that, upon Petitioner's dissolution, Petitioner's assets are to be

distributed equally among the Cities then participating in the activities of Petitioner.

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OF

MODIFICATION AND DECLARATORY

RELIEF

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impossible for Petitioner to fulfill the purpose

of

the Restricted Funds to construct the Arts

Center as a public/private venue to further arts and culture in Allen, Frisco, and Plano. Based

upon the failure of the original purpose of the Restricted Funds, modification

of

the Restricted

Funds to a use for arts and culture in the Cities, and where possible, for facilities and

infrastructure for arts and cultural purposes is appropriate.

17.

Petitioner, after consulting with the Cities and with the Attorney General, has

proposed the organizations identified on Exhibit A attached hereto and incorporated herein by

reference as appropriate recipients ( Proposed

Recipients ) on Petitioner's termination. The

Proposed Recipients are appropriate organizations to receive the Restricted Funds because they

are established, or have projects established, to further arts and culture in Allen, Frisco, and

Plano.

IT

IS

THEREFORE ORDERED ADJUDGED AND DECREED that the purpose of

the Restricted Funds is modified as follows:

(a) it has become impracticable or impossible for Petitioner to fulfill the purpose

of

the Restricted Funds to construct the Arts Center as a public/private venue to

further arts and culture in Allen, Frisco, and Plano;

(b) the purpose of the Restricted Funds is modified to furthering arts and culture in

the cities

of

Allen, Frisco, and Plano, including construction and/or renovation of

facilities and infrastructure for same;

(c) the Proposed Recipients are organizations established, or have projects

established, to further arts and culture in Allen, Frisco, and Plano; and

(d) the Restricted Funds shall be transferred to the Proposed Recipients in the

percentages set forth on Exhibit A hereto, subject to an amount to be retained


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by Petitioner to satisfy any outstanding expenses, including legal fees and

accounting fees related to its orderly winding up and termination with any residue

thereafter transferred to the Proposed Recipients in the same percentages.

IT IS FURTHER ORDERED ADJUDGED AND DECREED

that based on the

sworn affidavits of Briar Ridge Investments, Ltd. and the individual serving as Petitioner's

President at the time of the conveyance from Brittingham, which the Court admits and adopts

herein by reference, the absence

of

a reversionary provision in the Deed is a result of mutual

mistake, and the Deed is hereby reformed to correct such mutual mistake, such that the Deed

now states:

title to the Site automatically reverts to Donor if (i) title to the Site is conveyed by Donee

to any party except a non-profit, public purpose entity unless otherwise approved by

Donor in w'riting, (ii) any portion of the Site is used for a permanent non-public purpose

without Donor's prior written consent, or (iii) construction of the public performing arts

facility is not commenced on a portion

of

the site before the tenth anniversary

of

the

Closing Date unless extended by mutual agreement by both parties.

IT IS FURTHER ORDERED ADJUDGED AND DECREED based on the

abandonment

of

the Arts Center project, as found above, that the property subject to the Deed, as

more specifically described in the attached Exhibit

B

( Property ), reverts to Brittingham and

that title to the Property hereby vests in Brittingham.

IT

IS FURTHER ORDERED ADJUDGED AND DECREED that this Judgment

disposes of all parties and issues before the Court and is final and appealable for all purposes.

SIGNED this ay

of

2014.

JUDGE PRESIDING


RELIEF

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3rd December


9/12

State Bar No. 24027519

Email: [email protected]

BOURLAND, WALL

&

WENZEL, P.C.

301 Commerce Street, Suite

1500

Fort Worth, Texas

76102-4115

Telephone: 817-877-1088

Telecopier: 817-877-1636

ATTORNEYS FOR PETITIONER

THE ARTS

CENTER OF

NORTH

TEXAS

AGREED AS TO FORM AND SUBSTANCE

REGARDING

DEED

AND

PROPERTY:

State Bar

o.

00788Q,O .

Email: [email protected]

NESBITT, VAS SAR &

McCOWN,

L.L.P.

15851 Dallas Parkway, Suite

800

Addison, Texas

75001

Telephone: 972-371-2411

Telecopier:

972-3

71-2410

ATTORNEYS

FOR

RESPONDENT

JANICE BRITTINGHAM

FINAL ,JlJDGMENT

OF

MODIFICATION AND

DECLARATORY

RELmF

30750Jv5

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a.) Frisco

EXHIBIT A TO FINAL JUDGMENT OF

MODIFICATION

AND

DECLARATORY RELIEF

1. Frisco Association for the Arts: as to the first $250,000

(specifically restricted

to

be used for assisting in multiyear community wide

programming that will engage students and local arts organizations in coordination with

the City of Frisco and/or

the

Frisco Community Development Corporation)

2.

Frisco Community Development Corporation: Remaining portion of 1/3

(specifically restricted to be used for infrastructure and capital improvements for the

Frisco

Discovery

Center

which

Center

is managed by the Frisco

Association for

the Arts)

b.) Plano

1. The ArtCentre of Plano, Inc.: as to the first $250,000


to be

used for multiyear programming that will engage students

and

local arts organizations at the Saigling

House

in coordination with the City of

Plano)

2. The City of Plano: Remaining portion of 1/3

(specifically restricted to be used for renovations and related capital costs for the

Saigling House Project in coordination with The ArtCentre ofPlano,

Inc.)

c.) Allen

1. The Allen Arts Alliance Association, Inc.: as to the first $250,000


to be used for

multiyear community

wide

programming

that

will

engage students, the library

and

local arts

o r ~ n i z t i o n s

and include a summer camp

programming

for

students from 7th through

10

11

grade that connects the

arts

and science

subjects

and

aligns with

the

Texas Essential Knowledge and Skills, and a lecture series

to

be held in conjunction

with

Allen Arts Alliance member organizations and

the

Allen

library that will bring speakers in on topics that connect the arts and science subjects)

2.

As to the Remaining portion of 113, divided pro rata among the following:

a. Allen Civic Ballet

b. Allen Philharmonic Symphony, Inc.

c. Allen's Community Theater

d. The Allen Heritage Guild, Inc.

e.

Allen Public Art Committee

f The Allen Arts Alliance Association, Inc.

g.

Allen Friends

of

the Library (specifically restricted to be used

for arts education at the library)

Exnrnrr "A" TO FINAL JUDGMENT OF MODIFICATION AND DECLARATORY

RELIEF

309421.5

Percentage

1/3

1/3

1/3

SOLO PAGE


11/12

Being

a 124.374 acre tract

of land

situated in

the

J.J. Driggers Survey, Abstract No.

274, and the

Chadrick Jackson Survey, Abstract

No. 489, in the City

of Allen,

Collin

County,

Texas, and

being

a part

of the

remainder

of

Tract

I

called

242.672 acres,

described

in

deed

to Briar

Ridge

Investments,

Inc.,

recorded in County Clerk's

File

No. 910064625,

of the

Deed

Records of

Colin County,

Texas

(D.R.C.C.T.),

said 124.374 acre

tract

being

more

particularly

described by metes and bounds as follows:

Beginning

at

a concrete highway monument with aluminum disc stamped No. 471

found

for

the

northwest corner

of said

remainder

of

Tract I

and the common

northeast corner

of the

remainder of Tract

II, called 45.738 acres, described

in

deed

to

Mixon

Investment

Co. Inc., recorded

in

Volume 803, Page 446,

D.R.C.C.T.,

said

corner

being

in

the

existing

south

rightof-way

(R.O.W.)

line of

State

HighwayNo.121;

Thence North 66

degrees

52

minutes 48

seconds East, along the north line of said remainder

Tract I

and the common south R.O.W.

line of said State

Highway No. 121, a distance of

2884.93

feet to a concrete highway monument

with aluminum

disc

stamped No.

472 found for the

northeast corner

of

said

remainder

Tract I

and the common

northwest

corner of

a

called 138.038 acre

tract

of land

described in

deed

to

Thomas

0

Hicks, recorded

in County Clerk's

File No.

20000129958, D.R.C.C.T.;

Thence,

departing

said common line, and along the east line of said

remainder Tract I

and the common west line of said 138.038

tract,

the

following

courses:

South 00 degrees 44 minutes 48 seconds East,

a

distance of 1400.05 feet to

a

1/2 inch iron rod found for corner;

South

01 degrees

04

minutes

10

seconds East, a distance

of

455.64 feet to a

5/8 inch iron

rod

with

yellow plastic cap

stamped

Carter

Burgess set for corner;

Thence,

departing

said common line,

over

and

across

said

remainder Tract I

the

following

courses:

South

52

degrees

04

minutes

25

seconds West, a distance of 218.19 feet

to

a 5/8 inch iron

rod

with yellow plastic

cap

stamped

Carter Burgess set for

the

beginning

of

a tangent

curve

to

the left;

Southwesterly,

along

said tangent curve to

the

left

having

a

radius of

1060.00 feet, a

delta angle of 10 degrees 53

minutes

38

seconds, a

long chord

that

bears South

46 degrees 37 minutes 36 seconds

West,

a distance

of

201.24

feet,

and an

arc

length

of

201.54 feet

to a

5/8 inch

iron

rod with

yellow plastic

cap stamped

Carter


South 41

degrees

10

minutes 47 seconds

West,

a distance

of

100.00 feet to a

5/8 inch iron

rod with yellow plastic

cap

stamped

Carter

Burgess set for

the

beginning of

a tangent

curve to the right;

Southwesterly,

along said

tangent curve to the right

having

a radius

of

1060.00 feet, a

delta angle

of 20

degrees 36

minutes

01

seconds, a

long chord

that

bears South

51 degrees

28

minutes 47 seconds

West,

a distance

of

379.07

feet,

and

an arc

length

of

381.

12

feet to

a

5/8

inch iron rod with

yellow plastic

cap stamped

Carter


South

61 degrees 46 minutes 48 seconds

West,

a distance

of

331.93 feet to a 5/8

inch iron

rod with yellow plastic cap stamped

Carter

Burgess set

for

the beginning of

a tangent

curve to the

right;

Southwesterly,

along

said tangent curve to the right having a radius of 1080.00

feet,

a delta angle of 24 degrees 48 minutes 49

seconds,

a

long chord

that

bears South 74

degrees 11 minutes

13

seconds

West,

a distance

of

464.08

feet, and an arc length of

467.73 feet to a 5/8

inch

iron

rod

with yellow plastic cap stamped Carter Burgess set

for

corner;

South

86

degrees 35 minutes 37

seconds

West,

a distance

of 407.23

feet to a

5/8 inch iron rod with

yellow plastic

cap stamped

Carter Burgess

set

for

the

beginning

of

a tangent

curve

to

the left;

Southwesterly,

along said tangent curve to

the

left

having

a

radius of 1185.00 feet,

a

delta angle of 23 degrees 22 minutes 36

seconds,

a

long chord

that

bears South 74

degrees

54 minutes 19 seconds West,

a

distance of

480.13

feet, passing at an arc length

of

192.41 feet anell corner

of said

remainder Tract I

and

the

common

most northerly northeast corner

of

Tract

1A,

called

66.036

acres, described in

deed

to Hillwood RLD, L.P., recorded in County Clerk's File No. 20040013887, D.R.C.C.T.,

and

continuing

along

a

south line

of

said remainder

Tract I

and the common north line of said

Tract

1A, for

a

total arc length of 483.48

feet to a

5/8 inch

iron rod with

yellow plastic cap stamped Carter Burgess set for corner;

Thence,

continuing

along said common line, the

following

courses:

South

63 degrees

13 minutes 02

seconds

West,

a

distance of 49.34 feet to

a

5/8 inch

iron

rod with

yellow plastic

cap stamped

Carter Burgess set for

the

beginning

of

a tangent

curve

to

the left;

Southwesterly,

along said tangent

curve

to the

left

having

a

radius of 1060.00 feet,

a

delta angle

of 22

degrees 16 minutes 49

seconds,

a

long chord

that

bears South

52 degrees

04

minutes

38

seconds

West,

a distance

of

409.60

feet, and an arc length

of

412.19 feet to a

5/8 inch iron

rod with yellow plastic

cap stamped

Carter Burgess

set for the

southwest corner

of said

remainder

Tract I

and the

common

most

northerly northwest corner of

said

Tract 1A, said point

being

in the east line of a called 21.2218

acre

tract

of land

described in

deed

to Catholic

Diocese of Dallas, recorded

in County Clerk's

File

No.

20020163177, D.R.C.C.T.,

and

from said

point

the north corner

of Bridgewater Crossing Addition,

an

addition to

the

City

of Allen, recorded

in

Volume L, Page 52, of

the Plat Records of Collin

County,

Texas, bears South

00

degrees

18

minutes 03 seconds

West,

a distance of

8.37

feet;

EXHIBIT

B


12/12

Final Judgment on The Arts Center of North Texas

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