Fresno · Highlight

Bredefeld: Shady accounting, $10mil demand by Frazier leaves “stench”

As the Fresno City Council voted on Aug. 15 to approve a $659,000 subsidy for developer Terance Frazier on a stalled downtown project, three men sitting on the dais knew something the others didn’t.

One month earlier, Frazier had filed a $10 million damages claim against the City, claiming that the city harmed his reputation and targeted him while conducting an audit of his nonprofit’s management of Granite Park.

Fresno’s City Council President Paul Caprioglio and Vice President Miguel Arias were notified via email by City Attorney Doug Sloan shortly after Frazier’s claim was filed in July, Fresno City Councilman Garry Bredefeld said Tuesday.

During a press conference, Bredefeld said the current state of affairs with the city-owned Granite Park, operated by Frazier and his Central Valley Community Sports Foundation (CVCSF), has opened a chasm at City Hall.

“The reality is there’s a lot of stench with this and there’s a lot of incompetence,” Bredefeld said. “I think enough is enough with this.”

He added: “We have a history of problems with this particular developer.”

Bredefeld called for the City Council to hold a special meeting to determine whether the Frazier-led nonprofit rectified its accounting practices and had made steps to come into compliance with its 2016 agreement with the City of Fresno over Granite Park.

The Claim

In his original July 3 demand, totalling $10 million, $6 million was assigned to CVCSF, including its former Treasurer, Rep. TJ Cox (D–Fresno). The other $4 million was for Frazier himself.

The initial filing was rejected by the City, as Frazier cannot claim a specific damage amount. On July 17, he re-filed his demand stating that damages would exceed $10,000 (enough for an unlimited suit in Superior Court)

In his filings, Frazier lists his damages as “loss of reputation, false light, loss of sponsorship and other consequential damages, and contract damages including the breach of the covenant of good faith and fair dealing.”

Frazier blames the damages on the City’s internal audit report, conducted in 2018 and released in February 2019.

The audit made a number of key findings about CVCSF’s operation of Granite Park, including:

  • $1.14 million worth of taxpayer funds for Granite Park that either could not be supported by CVCSF financial records or were not documented at all.
  • CVCSF allowed people to live on Granite Park premises and later paid for those individuals’ apartment
  • Deposited $50,000 from Cox’s New Market Tax Credits firm, which was withdrawn by Cox on the same day and described as paying off an uncorroborated “note payable.”

“There were 31 bookkeeping errors out of a sample of more than 143 transactions,” Bredefeld said on Tuesday. “There were personal loans, missing documents, a lot of unaccounted money. A lot of important fiscal issues raised in that audit.”

In the immediate aftermath of the audit’s release, Arias claimed that there was “no evidence of mismanagement of money.”

“What’s clear is that nonprofit organizations use a different accounting system and accounting mechanism than we do in city government,” Arias told KSEE24.

Bredefeld said Arias’ initial assertions were “absurd.”

“It doesn’t pass the giggle test. It’s a sad commentary if that’s what he truly believes nonprofits do. Nonprofits, like any other business, have to account for all of their money.”

In his filing, Frazier claimed the audit “contained known errors and false and misleading information about the foundation’s operations at Granite Park.”

Weeks after the audit was publicly released, CVCSF received its annual payment of $150,000 from the City of Fresno to operate Granite Park.

Bredefeld argued that the funds should have been withheld until progress was made on the nonprofit’s accounting practices.

“[The annual payment] was the leverage and it was just given,” the councilman said. “Mr. Frazier hasn’t felt it was important enough to rectify those problems before he asked for $700,000, because he got it.”

In April, after the audit’s release, Arias publicly mused about the status of Granite Park and Frazier’s nonprofit before turning a query to Sloan, the City Attorney.

Sloan described CVCSF as being “substantially compliant” with the City’s agreement.

On Tuesday, Bredefeld rebuked Sloan, pushing back hard at his April assertion.

“The reality is he is not in compliance. When you look at the ground lease when this contract was arranged it was supposed to have basketball courts, volleyball courts, a restaurant – none of those are there.”

The Vote

While Granite Park has posed a headache for City leaders, they were confronted with more Frazier-related issues when he and partner Mehmet Noyan approached the City Council asking for $659,000 in additional funds to build “The Park at Fresno,” a mixed-use housing development in the South Stadium neighborhood.

Noyan and Frazier received the property from the City in 2016 and have yet to make any progress in getting the project up-and-running.

The funds were approved in a 5-1 vote on Aug. 15. Bredefeld was the lone dissenting vote against the additional funding to Frazier and Noyan.

“I don’t think that money should have been given until that audit had been cleared up,” Bredefeld said.

“Instead, since January – now we’re in September – that audit has not been rectified. Documents showing that all those financial records are now in order have not been given to the City of Fresno.”

Bredefeld noted that, at the time of the vote, only three people in the legislative branch – Sloan, Caprioglio, and Arias – knew of Frazier’s $10 million claim.

“Surprisingly, none of the other council members were told about any of this,” Bredefeld said.

The City Attorney

Trouble with Granite Park has exposed long-simmering tensions between Fresno City Council members and City Attorney Doug Sloan.

Under Fresno’s Charter, the City Attorney is hired and fired by the City Council, not the Mayor or City Manager.

For Mayor Lee Brand and his administration, that relationship has wreaked havoc and upgraded the exploration of seeking legal counsel independent of City Council influence.

For Sloan, that relationship means knowing how to count to four.

When asked whether he felt Sloan is worried about losing his job over offering legal opinions on operations at Granite Park, Bredefeld concurred.

“I think that the City Attorney is concerned about losing his job,” Bredefeld said. “I think he made a significant error when he said to the citizens of Fresno that this developer was in ‘substantial compliance’ of this agreement.”

“All one has to do is be objective and read it to understand that there is not compliance.”

When reached by The Sun, Fresno City Councilman Luis Chavez declined to comment on issues related to the claim filed by Frazier or the status of the City Attorney.

Keeping an eye on things

Bredefeld during his 30 minute news conference reiterated the fact that the City wouldn’t stand down to attempted intimidation or shakedown by Frazier.

“One of the issues they say is perhaps Mr. Frazier is trying to intimidate the city,” Bredefeld said. “It’s never going to happen if that’s what this suit or claim is about.”

While he seeks a special meeting to air out the various issues facing Frazier’s CVCSF, Bredefeld made it clear that something needs to change.

“When you’re not in compliance with an agreement the agreement needs to change or something needs to terminate,” he said. “People shouldn’t turn a blind eye to an agreement that everyone agreed to but is not being fulfilled. That’s what’s happening here.”

He was careful to note that the City seized operation of Al Radka Park from Frazier and CVCSF in September 2018 due to the fact that Frazier had locked up the park and restricted access to its baseball fields.

As for examination of some of the more questionable financial transactions, Bredefeld said it’s up to respective agencies, including law enforcement, to make determinations as to how to proceed with CVCSF.

“It raises lots of questions,” he said in response to a question on the number of unaccounted transactions. “If what I’ve read in the paper was accurate, I think there are other agencies that are looking into this.”

As for the Council maintaining a watchdog presence over Granite Park and its operator, Bredefeld said he’s staying hopeful but realistic about the prospects.

“Do I think people are willing to take a blind eye to things? Yeah. I think the evidence is there.”

Alex Tavlian
Alex Tavlian is the Executive Editor of The San Joaquin Valley Sun and Executive Director of Valley Future Foundation. You can reach Alex at alex.tavlian@sjvsun.com.