2025-11-17T14:44:43-06:00 2024-12-31 331498605 PLANTE & MORAN PLLC 1098 WOODWARD AVE DETROIT MI 48226 990 2024-01-01 300125283 DETROIT RIVERFRONT CONSERVANCY INC DETR 3135668200 600 RENAISSANCE CENTER 1720 DETROIT MI 48243 RYAN SULLIVAN CHIEF EXECUTIVE OFFICER 3132591780 2025-11-15 1 1 DAVID LOWENTHAL P00378651 3134967200 2025-11-15 2024 2025-03-06 01:10:19Z RYAN SULLIVAN 600 RENAISSANCE CENTER 1720 DETROIT MI 48243 39473017 0 X WWW.DETROITRIVERFRONT.ORG X 2002 MI THE DETROIT RIVERFRONT CONSERVANCY (DRFC), IS RESPONSIBLE FOR THE ESTABLISHMENT, IMPROVEMENT, OPERATION, MAINTENANCE, SECURITY, PROGRAMMING AND EXPANSION OF THE DETROIT RIVERWALK AND ASSOCIATED GREEN SPACES. THROUGH ITS PUBLIC/PRIVATE PARTNERSHIPS, THE DRFC WILL SUPPORT THE DEVELOPMENT OF THE RIVERFRONT DISTRICT AND FACILITATE COMMUNITY ACCESS TO THE WATERFRONT. THE DRFC WILL:- DEVELOP A COLLECTIVE SENSE OF OWNERSHIP, ACCESSIBILITY AND RESPONSIBILITY- ENHANCE DETROIT'S IMAGE TO EMPHASIZE ITS ICONIC, INTERNATIONAL RIVERFRONT- CREATE AND MAINTAIN AN INVITING DESTINATION FOR ALL 43 43 19 43 0 0 45904939 33969062 0 0 -110202 17744 21817 4872462 45816554 38859268 0 0 0 0 2398173 2243688 845288 169206 1391408 14051909 9555008 17295370 11967902 28521184 26891366 168424806 194281766 27924215 30324452 140500591 163957314 X THE DETROIT RIVERFRONT CONSERVANCY (DRFC), IS RESPONSIBLE FOR THE ESTABLISHMENT, IMPROVEMENT, OPERATION, MAINTENANCE, SECURITY, PROGRAMMING AND EXPANSION OF THE DETROIT RIVERWALK AND ASSOCIATED GREEN SPACES. THROUGH ITS PUBLIC/PRIVATE PARTNERSHIPS, THE DRFC WILL SUPPORT THE DEVELOPMENT OF THE RIVERFRONT DISTRICT AND FACILITATE COMMUNITY ACCESS TO THE WATERFRONT. 0 0 9049403 0 AS A REGIONAL LANDMARK, A PUBLIC ASSET FOR DETROIT, AND AMERICA'S BEST RIVERWALK, ACCORDING TO USA TODAY, THE DETROIT RIVERFRONT AND OUR CONNECTED GREENWAYS PLAY A SPECIAL ROLE IN THE LIVES OF DETROITERS AND A CATALYTIC ROLE IN THE CONTINUED TRANSFORMATION OF DETROIT'S INTERNATIONAL WATERFRONT. A COMMUNITY ADVISORY TEAM OF 21 DETROITERS REFLECTING DIFFERENT GEOGRAPHIES, DEMOGRAPHICS, AND USER TYPES WAS ASSEMBLED AND TRAVELED TO NEW YORK, PHILADELPHIA, AND CHICAGO TO LEARN ABOUT OTHER LANDMARK WATERFRONT PARKS AND TO INFORM PLANS FOR THE CONTINUED DEVELOPMENT OF THE RALPH C. WILSON, JR. CENTENNIAL PARK. IN TOTAL, MORE THAN 5,000 COMMUNITY MEMBERS HAVE BEEN ENGAGED IN DEVELOPING THE VISION FOR THE PARK AND FUTURE PROGRAMMING. THE DETROIT RIVERFRONT WELCOMES MORE THAN THREE MILLION VISITORS PER YEAR AND HAS GENERATED SIGNIFICANT PUBLIC AND PRIVATE INVESTMENT SINCE ITS FOUNDING. THE DETROIT RIVERFRONT HAS BEEN NAMED AMERICA'S BEST RIVERWALK BY USA TODAY IN 2021, 2022, AND 2023.CELEBRATING OUR 20TH ANNIVERSARY IN 2023, THE CONSERVANCY WAS ESTABLISHED WITH A VISION AND FOUNDING PROMISE TO TRANSFORM DETROIT'S RIVERFRONT, THE FACE OF OUR CITY, INTO A BEAUTIFUL, EXCITING, SAFE, ACCESSIBLE, WORLD-CLASS GATHERING PLACE FOR ALL. TODAY, THE CONSERVANCY IS RESPONSIBLE FOR: - STEWARDSHIP AND MAINTENANCE - SECURITY AND SAFETY - REINVESTMENT AND DEVELOPMENT - PROGRAMMING AND EVENT ADMINISTRATION THE RIVERFRONT ENCOMPASSES 5 PARKS 3 GREENWAYS, AND MULTIPLE PLAZAS PROVIDING A DIVERSITY OF OUTDOOR EXPERIENCES FOR VISITORS OF ALL AGES AND NOW HOST PROGRAMS FOR MORE THAN 350,000 PEOPLE EACH YEAR: - CULLEN PLAZA - DEQUINDRE CUT - GABRIEL RICHARD PARK & CHRISTOPHER STROH PLAZA - MAYOR DENNIS W. ARCHER GREENWAY - MT. ELLIOTT PARK - RALPH C. WILSON, JR. CENTENNIAL PARK - ROBERT C. VALADE PARK - SOUTHWEST GREENWAYONCE A NEGLECTED STRETCH OF INDUSTRIAL SITES AND SHUTTERED BUSINESSES, THE DETROIT RIVERFRONT IS NOW A SERIES OF CHERISHED PUBLIC SPACES WHERE ALL FEEL WELCOME. BEGINNING WITH A BEST-IN-CLASS COMMUNITY ENGAGEMENT PROCESS, THE DETROIT RIVERFRONT CONSERVANCY HELD MORE THAN 100 COMMUNITY MEETINGS BEFORE STARTING CONSTRUCTION ON THE RIVERWALK, AN UNPRECEDENTED APPROACH AT THE TIME. THE LESSONS FROM THIS PROCESS CONTINUE TO INFORM PROGRAMMING ON THE DETROIT RIVERFRONT AND PLANS FOR NEW SPACES.THE DETROIT RIVERFRONT CONSERVANCY BROKE GROUND ON THE RALPH C. WILSON, JR. CENTENNIAL PARK IN MAY, 2022 AND HAS FULFILLED OUR BRIDGE-TO-BRIDGE VISION SINCE COMPLETING CONSTRUCTION ON THE FINAL SEGMENT CONNECTING THE EAST RIVERFRONT TO RALPH WILSON PARK. THE NEW PARK OPENED IN 2025; IT FEATURES THE DELTA DENTAL PLAY GARDEN, AN EXPANSIVE LAWN FOR PROGRAMS AND SPECIAL EVENTS, BASKETBALL COURTS IN THE SPORT HOUSE AND A LARGE WATER GARDEN. 9049403 1 1 0 1 0 0 1 0 0 1 1 0 0 1 1 0 0 0 0 0 0 0 0 1 1 0 0 0 0 1 0 1 1 0 0 0 0 0 1 0 0 0 1 0 0 0 0 1 17 0 1 19 1 0 0 0 0 0 1 1 0 0 0 0 0 0 X 43 43 0 1 0 1 0 0 0 1 1 1 0 1 1 1 1 1 1 1 1 0 MI X QUATRRO BUSINESS SUPPORT SERVICES 3135668200 600 RENAISSANCE CENTER SUITE 1780 DETROIT MI 48243 MATTHEW CULLEN CHAIR 1.00 X X 0 0 0 JENNIFER HUDSON-PARKE SECRETARY 1.00 X X 0 0 0 JOHN BLANCHARD TREASURER 1.00 X X 0 0 0 STEVE HAMP VICE CHAIR 1.00 X X 0 0 0 SANDY BARUAH DIRECTOR 1.00 X 0 0 0 MARVIN BEATTY DIRECTOR 1.00 X 0 0 0 ALISHA BELL DIRECTOR 1.00 X 0 0 0 DAVE BLASZKIEWICZ DIRECTOR 1.00 X 0 0 0 M SCOTT BOWEN DIRECTOR 1.00 X 0 0 0 LAURA CHEVEZ-WAZEERUD-DIN DIRECTOR 1.00 X 0 0 0 MARY CULLER DIRECTOR 1.00 X 0 0 0 PETER CUMMINGS DIRECTOR 1.00 X 0 0 0 PATRICK DEVLIN DIRECTOR 1.00 X 0 0 0 GARLIN GILCHRIST II DIRECTOR 1.00 X 0 0 0 JOHN HARTIG DIRECTOR 1.00 X 0 0 0 HIRAM JACKSON DIRECTOR 1.00 X 0 0 0 WENDY JACKSON DIRECTOR 1.00 X 0 0 0 KEVIN JOHNSON DIRECTOR 1.00 X 0 0 0 ANDREW KANDREVAS DIRECTOR 1.00 X 0 0 0 ERIC LARSON DIRECTOR 1.00 X 0 0 0 ROBERT MARANS DIRECTOR 1.00 X 0 0 0 DAVID MASSARON DIRECTOR 1.00 X 0 0 0 PAUL MATTHEW DIRECTOR 1.00 X 0 0 0 SONYA MAYS DIRECTOR 1.00 X 0 0 0 LATRICE MCCLENDON DIRECTOR 1.00 X 0 0 0 SARAH MCCLURE DIRECTOR 1.00 X 0 0 0 LEONA MEDLEY DIRECTOR 1.00 X 0 0 0 MITCHELL MONDRY DIRECTOR 1.00 X 0 0 0 CLAUDE MOLINARI DIRECTOR 1.00 X 0 0 0 REIMER PRIESTER DIRECTOR 1.00 X 0 0 0 MICHAEL RAFFERTY DIRECTOR 1.00 X 0 0 0 BRIAN RINEHART DIRECTOR 1.00 X 0 0 0 AMY ROBINSON DIRECTOR 1.00 X 0 0 0 PAMELA RODGERS DIRECTOR 1.00 X 0 0 0 MARIA ELENA RODRIGUEZ DIRECTOR 1.00 X 0 0 0 MARY SHEFFIELD DIRECTOR 1.00 X 0 0 0 JOHN STROH III DIRECTOR 1.00 X 0 0 0 MARGARET TRIMER DIRECTOR 1.00 X 0 0 0 FRANK VENEGAS DIRECTOR 1.00 X 0 0 0 MATTHEW WALTERS DIRECTOR 1.00 X 0 0 0 SCOTT WICKENS DIRECTOR 1.00 X 0 0 0 BRADLEY DICK DIRECTOR 1.00 X 0 0 0 STEPHANIE WASHINGTON DIRECTOR 1.00 X 0 0 0 ERIC DIETZ DIRECTOR - PART YEAR 1.00 X 0 0 0 ANTOINE BRYANT DIRECTOR - PART YEAR 1.00 X 0 0 0 RACHEL BENDIT DIRECTOR - PART YEAR 1.00 X 0 0 0 NANCY TELLEM DIRECTOR - PART YEAR 1.00 X 0 0 0 MARK WALLACE PRESIDENT AND C.E.O. - THRU 5/2024 40.00 X 174437 0 23441 WILLIAM SMITH C.F.O. - THRU 5/2024 40.00 X 82770 0 18513 RYAN SULLIVAN CHIEF EXECUTIVE OFFICER 40.00 X 58177 0 4756 CASSIE BRENSKE CHIEF DEVELOPMENT OFFICER 40.00 X 200517 0 25115 STEPHAN BOBALIK SENIOR DIRECTOR OF DEVELOPMENT 40.00 X 129868 0 19744 RACHEL FRIERSON VP OF OPERATIONS & PROGRAMMING 40.00 X 130417 0 19221 KAREN SLAUGHTER-DUPERRY EXECUTIVE IN CHARGE OF CONSTRUCTION 40.00 X 131922 0 1635 908108 0 112425 5 0 1 0 BRINKER CHRISTMAN 3633 MICHIGAN AVE SUITE 300 DETROIT MI 48216 CONSTRUCTION MANAGEMENT 42550602 EAGLE SECURITY SERVICES LLC 500 GRISWOLD SUITE 400 DETROIT MI 48226 SECURITY 4726431 DOWNTOWN DETROIT PARTNERSHIP 1000 WOODWARD AVE SUITE 380 DETROIT MI 48226 CLEANING/MAINTENANCE 1617265 JONATHAN WITZ & ASSOCIATES 301 WEST 4TH STREET SUITE 440 ROYAL OAK MI 48067 EVENT HOSTING 1436164 BRIGHTVIEW LANDSCAPES LLC PO BOX 740655 ATLANTA GA 30374 LANDSCAPING 1431790 31 408423 4180260 29380379 1975260 33969062 17744 17744 146629 0 146629 146629 146629 45690 408423 194791 -149101 -149101 293892 418958 -125066 -125066 CANCELLATION OF DEBT 900099 5000000 5000000 5000000 38859268 0 0 4890206 587726 297652 290074 1270988 774703 171365 324920 66315 46742 5085 14488 187996 94654 35757 57585 130663 56649 31528 42486 200489 200489 25000 25000 169206 169206 38410 38410 550290 154149 387434 8707 183536 154809 12237 16490 230388 50098 58743 121547 205455 89075 49575 66805 846696 645661 85636 115399 38381 16640 9261 12480 2034900 2034900 135027 135027 RIVERWALK MAINTENANCE 4157920 4157920 RIVER DAYS EVENT 836540 722301 114239 VOLUNTEER EXPENSE 35124 35124 DUES & SUBSCRIPTIONS 19209 8328 4635 6246 17643 7650 4257 5736 11967902 9049403 1527091 1391408 1897284 3453415 304 304 9207254 9135125 344960 429180 169928953 16818733 128643985 153110220 39260 39260 7687945 7865403 20603814 20248859 168424806 194281766 7340326 10014814 500000 146912 20083889 20162726 27924215 30324452 X 110411592 134287214 30088999 29670100 140500591 163957314 168424806 194281766 X 26891366 839925 -4274568 X X 0 0 1 0 X 25697477 18251410 25007175 45422022 33969062 148347146 25697477 18251410 25007175 45422022 33969062 148347146 39545052 108802094 5424 42736 24097 216433 164373 453063 428818 5339582 5768400 154568609 0.70390 0.61540 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 0 0 0 0 0 0 0 1 25000 25000 0 PART II-B, LINE 1: DETROIT RIVERFRONT CONSERVANCY, INC. HIRE A LOBBYIST TO ENGAGE AND INTERACT WITH STATE LEGISLATORS AND AGENCIES ON ITS BEHALF. X X 14 54.82 0 0 0 1 0 30912969 6360000 1959318 624056 88335 38519896 7399948 23818433 653463 922329 36546 30912969 8767141 -1023386 309426 34381 7399948 8118746 974970 257924 39993 28658 8767141 7397573 974123 227655 25295 8118746 0.02894 0.91145 0.05959 1 0 10779521 10779521 159149432 16818733 142330699 153110220 EASEMENTS 19366508 RIGHT-OF-USE ASSETS 882351 20248859 LEASE LIABILITIES 934001 CONSTRUCTION RETAINAGES PAYABLE 2228725 REFUNDABLE ADVANCES 17000000 20162726 PART II, LINE 9: INTANGIBLE ASSETS OF THE CONSERVANCY AT CONSIST OF 14 PERPETUAL EASEMENTS FOR THE IMPROVEMENT OF PROPERTY ALONG THE DETROIT RIVERFRONT WITH A TOTAL CARRYING VALUE OF $19,366,508 AT BOTH DECEMBER 31, 2024 AND 2023. DONATED EASEMENTS ARE CARRIED AT THEIR ESTIMATED FAIR MARKET VALUE AT THE TIME OF DONATION. PURCHASED EASEMENTS ARE CARRIED AT COST BASIS. ALL OF THE EASEMENTS HELD ARE PERPETUAL IN NATURE, THEREFORE THEY ARE NOT SUBJECT TO AMORTIZATION. IN 2012, THE CONSERVANCY SOLD 7 EASEMENTS WITH A TOTAL CARRYING VALUE OF $15,691,354, ALONG WITH RELATED IMPROVEMENTS CONSTRUCTED ON THOSE EASEMENTS, TO THE MICHIGAN DEPARTMENT OF NATURAL RESOURCES ("MDNR") FOR CONSIDERATION IN THE AMOUNT OF $15,000,000, AND SIMULTANEOUSLY THEREWITH, THE CONSERVANCY AND MDNR ENTERED INTO A LEASE DATED NOVEMBER 20, 2012, UNDER WHICH THE CONSERVANCY LEASED BACK THE EASEMENTS AND IMPROVEMENTS (AS AMENDED, THE "2012 LEASE AGREEMENT"). THE 2012 LEASE AGREEMENT HAS AN INITIAL TERM OF 50 YEARS WITH AN AUTOMATIC EXTENSION OF 49 YEARS. DURING THE YEAR ENDED DECEMBER 31, 2023, THE CONSERVANCY ASSIGNED 2 ADDITIONAL EASEMENTS TO MDNR WITH A TOTAL CARRYING VALUE OF $1,860,000, ALONG WITH RELATED IMPROVEMENTS CONSTRUCTED ON THOSE EASEMENTS FOR CONSIDERATION IN THE AMOUNT OF $2,000,000, AND AMENDED THE 2012 LEASE AGREEMENT TO INCLUDE THE 2 ADDITIONAL EASEMENTS THEREUNDER. UNDER THE TERMS OF THE 2012 LEASE AGREEMENT, THE CONSERVANCY RETAINS CONTROL OF THE EASEMENTS AND IS RESPONSIBLE FOR MAINTENANCE OF THE PARCELS. THEREFORE, THE TRANSACTIONS DID NOT QUALIFY AS A SALE, AND THE EASEMENTS REMAIN ASSETS OF THE CONSERVANCY. UNDER THE 2012 LEASE AGREEMENT, THE PROCEEDS FROM THE TRANSACTIONS MUST BE RETURNED TO MDNR IF THE UNDERLYING EASEMENTS ARE TERMINATED AS A RESULT OF ABANDONMENT OR NONUSE DURING THE TERM OF THE 2012 LEASE AGREEMENT. ACCORDINGLY, THE PROCEEDS FROM MDNR ARE ACCOUNTED FOR AS CONDITIONAL GRANTS AND ARE REFLECTED AS A REFUNDABLE ADVANCE OF $17,000,000 IN THE ACCOMPANYING CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF DECEMBER 31, 2024 AND 2023. AS PART OF THE ADJUSTMENTS MADE AS A RESULT OF THE FRAUD LOSS DISCUSSED IN NOTE 13, THE CONSERVANCY REVISED THE ACCOUNTING FOR ITS HELD EASEMENTS FROM HISTORICAL PRACTICES TO BE IN ACCORDANCE WITH GAAP; HOWEVER, THIS DID NOT IMPACT HOW THE EASEMENTS WERE USED OR THE OPERATIONS OF THE CONSERVANCY. PART V, LINE 4: THE CONSERVANCY HAS ESTABLISHED THE FOLLOWING FUNDS (COLLECTIVELY, THE "ENDOWMENT FUNDS") AS COMPONENT FUNDS OF THE COMMUNITY FOUNDATION FOR SOUTHEAST MICHIGAN ("CFSEM"): DETROIT RIVERFRONT CONSERVANCY ENDOWMENT FUND (THE "CONSERVANCY FUND") THE INITIAL DEPOSIT OF $3,000,000 TO THE CONSERVANCY FUND, ALONG WITH A CONTRIBUTION OF $2,000,000 IN 2019, ARE RESTRICTED TO BE HELD IN PERPETUITY. THE INCOME GENERATED FROM THE CONSERVANCY FUND MAY BE USED TO SUPPORT VARIOUS ACTIVITIES. DEQUINDRE CUT MAINTENANCE ENDOWMENT FUND (THE "DEQUINDRE CUT FUND") THIS FUND WAS ESTABLISHED TO SUPPORT THE OPERATIONS AND MAINTENANCE OF THE DEQUINDRE CUT PATHWAY. RALPH C. WILSON JR. CENTENNIAL PARK ENDOWMENT FUND (THE "CENTENNIAL PARK FUND") THIS FUND WAS ESTABLISHED TO SUPPORT THE OPERATIONS AND MAINTENANCE OF THE RALPH C. WILSON JR. CENTENNIAL PARK AND ITS CONNECTIONS. CULLEN FAMILY ENDOWMENT FUND (THE "CULLEN FUND") THIS FUND WAS ESTABLISHED TO SUPPORT THE OPERATIONS AND MAINTENANCE OF ALL SPACES OWNED AND OPERATED BY THE CONSERVANCY. CULLEN FAMILY CAROUSEL FUND (THE "FAMILY CAROUSEL FUND") THIS FUND WAS ESTABLISHED TO SUPPORT THE OPERATION AND MAINTENANCE OF THE CULLEN FAMILY CAROUSEL AND FREE RIDES FOR CHILDREN VISITING THE CAROUSEL AT CERTAIN TIMES DURING THE WEEK. THE UNIFIED GREENWAY ENDOWMENT FUND (THE "GREENWAY FUND") THIS FUND WAS ESTABLISHED TO SUPPORT THE LONG-TERM MAINTENANCE AND OPERATION OF DETROIT'S UNIFIED GREENWAY. THE ENDOWMENT FUNDS ARE ASSETS OF CFSEM. THE MAJORITY OF THE ENDOWMENT FUNDS' ASSETS IS INVESTED IN REGISTERED INVESTMENT COMPANIES AND COLLECTIVE TRUST FUNDS. X X X X X X X 0 COMMUNITY COUNSELING SERVICE COMPANY LLC 527 MADISON AVENUE 5TH FLOOR NEW YORK NY 10022 FUNDRAISER 0 0 150000 0 150000 MI SHIMMER ON THE RIVER 348933 311443 37490 40753 39214 43092 13599 SOIREE ON THE GREENWAY 105180 96980 8200 15673 23216 16280 2964 454113 408423 45690 56426 62430 59372 16563 194791 -149101 X 0 1 X X X X 0 0 0 0 0 0 0 0 0 CASSIE BRENSKE CHIEF DEVELOPMENT OFFICER 199517 0 1000 0 0 0 16080 0 9035 0 225632 0 0 0 MARK WALLACE PRESIDENT AND C.E.O. - THRU 5/2024 174437 0 0 0 0 0 14000 0 9441 0 197878 0 0 0 PART I, LINE 1A IN 2024 THE PRESIDENT AND CHIEF EXECUTIVE OFFICER WERE ALLOWED A HEALTH AND SOCIAL CLUB MEMBERSHIP AS PART OF THEIR COMPENSATION PACKAGES. THE MEMBERSHIP WAS NOT TREATED AS TAXABLE COMPENSATION. PART I, LINE 1B THE BOARD APPROVED THE MEMBERSHIP AS PART OF THE PRESIDENT'S COMPENSATION PACKAGE REVIEW AND APPROVAL PROCESS. WILLIAM SMITH OFFICER MISSAPPROPRIATION OF FUNDS 0 SCHEDULE L, PART I, LINE 1: SEE SCHEDULE O, RESPONSE TO PART VI, SECTION A, LINE 5 FOR FURTHER INFORMATION REGARDING THESE EVENTS. SCHEDULE L, PART I, LINE 2: WILLIAM SMITH IS ALLEGED TO HAVE VIOLATED SECTION 4958. WILLIAM SMITH WOULD BE RESPONSIBLE FOR EXCISE TAX ON ANY AMOUNTS HE MISAPPROPRIATED FROM THE ORGANIZATION. WE ESTIMATE THAT WILLIAM SMITH MISAPPROPRIATED APPROXIMATELY $42,500,000. UNDER SECTION 4958, WILLIAM SMITH WOULD BE RESPONSIBLE TO REPAY THIS AMOUNT TO THE ORGANIZATION. IN ADDITION, WILLIAM SMITH WOULD BE SUBJECT TO AN EXCISE TAX EQUAL TO 25% OF THE MISAPPROPRIATION. X 1 5290 FMV X 1 1975260 ACTUAL COST 0 0 0 PART I, COLUMN (B): LINE 17, COLUMN (C) REPRESENTS THE AMOUNT ASSOCIATED WITH CONSTRUCTION COSTS FOR OPERATING, MAINTAINING, AND DEVELOPING THE RIVERWALK. FORM 990, PART VI, SECTION A, LINE 3 ON MAY 14, 2024, THE CONSERVANCY PLACED THE ORGANIZATION'S CFO, ON ADMINISTRATIVE LEAVE AFTER DISCREPANCIES WITH FINANCIAL DOCUMENTS WERE IDENTIFIED AND THEREAFTER, ON MAY 31, 2024, THE CHIEF FINANCIAL OFFICER'S EMPLOYMENT WAS TERMINATED FOR CAUSE. IN JUNE OF 2024, THE CONSERVANCY ENGAGED QUATRRO BUSINESS SUPPORT SERVICES AS AN OUTSOURCED ACCOUNTING SERVICE PROVIDER TO OVERSEE ITS FINANCIAL INFORMATION. A FORENSIC ACCOUNTING FIRM WAS ENGAGED TO INVESTIGATE AND REPORT ON THE FINANCIAL DISCREPANCIES AND A LAW FIRM HAS BEEN ENGAGED TO ASSIST WITH CIVIL LITIGATION AGAINST THE FORMER CFO. THE CONSERVANCY ALSO ENGAGED A NEW INDEPENDENT AUDIT FIRM TO COMPLETE THE FINANCIAL STATEMENT AUDIT FOR YEARS ENDED DECEMBER 31, 2024 AND DECEMBER 31, 2023. FORM 990, PART VI, SECTION A, LINE 5 DURING THE CURRENT YEAR, MANAGEMENT IDENTIFIED MATERIAL FRAUD COMMITTED BY THE FORMER CFO. THE CFO MISAPPROPRIATED APPROXIMATELY $42,500,000 FUNDS OVER A PERIOD OF MORE THAN 10 YEARS. THE ORGANIZATION HAS TAKEN THE FOLLOWING CORRECTIVE MEASURES DESCRIBED OVER THE NEXT SEVERAL PARAGRAPHS. DETROIT RIVERFRONT CONSERVANCY MANAGEMENT'S PLAN: THE DETROIT RIVERFRONT CONSERVANCY HAS UNDERTAKEN A SWEEPING SET OF GOVERNANCE AND FINANCIAL ENHANCEMENTS IN RESPONSE TO THE 2024 FRAUD, REAFFIRMING ITS COMMITMENT TO INTEGRITY, ACCOUNTABILITY, AND PUBLIC TRUST. THESE ENHANCEMENTS, DEVELOPED WITH GUIDANCE FROM NATIONAL EXPERTS AND IMPLEMENTED BY THE BOARD AND EXECUTIVE LEADERSHIP, ARE DESIGNED TO PROTECT THE ORGANIZATION AND RESTORE PUBLIC CONFIDENCE. IN ADDITION, THE CONSERVANCY HAS TAKEN DECISIVE FINANCIAL AND FUNDRAISING ACTION TO ENSURE THE ONGOING AND FUTURE OPERATIONS CONTINUE TO BE DELIVERED WITHOUT INTERRUPTION WHILE BUILDING THE LONG-TERM SUSTAINABILITY OF THE ORGANIZATION. BACKGROUND & IMMEDIATE ACTIONS: AFTER UNCOVERING A MAJOR EMBEZZLEMENT SCHEME IN SPRING 2024, THE BOARD ACTED SWIFTLY ENGAGING FORENSIC AUDITORS, LEGAL COUNSEL, AND LAW ENFORCEMENT. THE PERPETRATOR WAS PROSECUTED AND SENTENCED TO 19 YEARS IN PRISON, AND CIVIL LITIGATION IS UNDERWAY TO RECOVER STOLEN ASSETS. NO OTHER STAFF OR BOARD MEMBERS WERE CHARGED. THE CONSERVANCY HAS SINCE RESTRUCTURED ITS LEADERSHIP TEAM, WELCOMING NEW EXECUTIVES AND BOARD OFFICERS, AND HAS A TRANSITION PLAN FOR ALL KEY GOVERNANCE ROLES BY YEAR-END 2025. THE ORGANIZATION ALSO COMPLETED THE RALPH C. WILSON, JR. CENTENNIAL PARK WHICH OPENED IN OCTOBER 2025. GOVERNANCE STRUCTURE ENHANCEMENTS: FOLLOWING THE FRAUD, THE CONSERVANCY IS REDUCING ITS BOARD FROM 55 TO 30 MEMBERS, INSTITUTING TERM LIMITS OF THREE CONSECUTIVE THREE-YEAR TERMS, AND ENHANCING MEMBER TRAINING AND ACCOUNTABILITY. ALL STANDING COMMITTEES, SUCH AS FINANCE, AUDIT, GOVERNANCE/NOMINATING, ADVANCEMENT, AND PROGRAMS & COMMUNITY ENGAGEMENT HAVE UPDATED CHARTERS AND ANNUAL REVIEWS, AND THE LITIGATION COMMITTEE WILL DISSOLVE ONCE ITS WORK IS COMPLETE. THERE ARE NOW FORMAL SUCCESSION PLANS IN PLACE TO ENSURE LEADERSHIP CONTINUITY AND INSTITUTIONAL KNOWLEDGE. INCREASED TRANSPARENCY AND PUBLIC ENGAGEMENT WILL BE PROMOTED VIA SHARING ANNUAL REPORTS AND PROVIDING OPEN ACCESS TO GOVERNANCE INFORMATION. FINANCIAL CONTROLS ENHANCEMENTS: FOLLOWING THE DISCOVERY OF FINANCIAL IRREGULARITIES, THE ORGANIZATION STRENGTHENED ITS FINANCIAL OVERSIGHT AND GOVERNANCE PRACTICES. THESE MEASURES INCLUDE ENHANCED SEGREGATION OF DUTIES, IMPROVED REVIEW AND APPROVAL PROCESSES, AND ENGAGEMENT OF NEW INDEPENDENT AUDITORS. ADDITIONAL MEASURES INCLUDE ESTABLISHMENT OF COMPREHENSIVE AUDIT TRAILS FOR ALL FINANCIAL TRANSACTIONS, ENGAGEMENT OF AN INDEPENDENT AUDIT FIRM (NOT THE CURRENT AUDITOR) PERIODICALLY TO REVIEW INTERNAL CONTROLS, AND AN ANNUAL REVIEW OF THE CONSERVANCY'S BANKING RELATIONSHIPS. THE ORGANIZATION REMAINS COMMITTED TO TRANSPARENCY, ACCOUNTABILITY, AND COMPLIANCE WITH ALL APPLICABLE STANDARDS. FINANCIAL UPDATES AND LOOKING FORWARD: OVER THE LAST 12 MONTHS, THE CONSERVANCY HAS COMPLETED EXTENSIVE REVIEWS OF VENDORS, CONTRACTS, AND EXPENDITURES WHICH HAS RESULTED IN SIGNIFICANT COST SAVINGS TO THE ORGANIZATION'S ANNUAL OPERATING BUDGET. IN ADDITION, THE ORGANIZATION HAS RECEIVED STRONG SUPPORT FROM LONG-TERM AND NEW FUNDING PARTNERS, WHICH HAS SUPPORTED A MEASURED FISCAL APPROACH THROUGH CASH FLOW NEEDS OVER THE LAST 12 MONTHS. GOING FORWARD, THE CONSERVANCY TEAM WILL CONTINUE TO DILIGENTLY MONITOR THE FINANCIAL POSITION OF THE ORGANIZATION WITH A FOCUS ON REVENUE STRATEGY, EXPENSE MANAGEMENT AND CASH PROJECTIONS. ACTIVE MONITORING AND REGULAR REPORTING OF FINANCIAL HEALTH AND OUTLOOK FOR SENIOR LEADERSHIP FROM THE CONSERVANCY AND APPROPRIATE BOARD COMMITTEES. FORM 990, PART VI, SECTION B, LINE 11B DETROIT RIVERFRONT CONSERVANCY ENGAGES AN OUTSIDE CPA FIRM TO PREPARE THE FORM 990. THE DRFC AUDIT COMMITTEE REVIEWS THE FULL FORM 990. THE GOVERNING BOARD IS PROVIDED ACCESS TO A PUBLIC DISCLOSURE COPY OF THE RETURN PRIOR TO FILING. FORM 990, PART VI, SECTION B, LINE 12C EACH VOTING MEMBER OF THE BOARD SHALL SIGN A STATEMENT AT OR BEFORE THE CONSERVANCY'S ANNUAL MEETING CONFIRMING THE DIRECTOR UNDERSTANDS AND AGREES TO COMPLY WITH THE CONFLICT OF INTEREST POLICY AND SHALL COMPLETE AND SUBMIT TO THE CONSERVANCY AN ANNUAL QUESTIONNAIRE REGARDING HIS OR HER INTEREST IN MATTERS IN WHICH THE CONSERVANCY IS INVOLVED. THE STATEMENTS ARE THEN REVIEWED BY THE GOVERNANCE COORDINATOR AND ANY SIGNIFICANT ITEMS ARE DISCUSSED. A DIRECTOR IN CONFLICT MAY NOT PARTICIPATE IN, OR BE PRESENT DURING, ANY DELIBERATIONS OR VOTE OF THE BOARD OF DIRECTORS OR ANY COMMITTEE OF THE BOARD OF DIRECTORS ON THE TRANSACTION OR ARRANGEMENT IN WHICH THE INTERESTED PERSON HAS A FINANCIAL INTEREST, WHETHER OR NOT HIS OR HER FINANCIAL INTEREST IS IN CONFLICT WITH THE CONSERVANCY'S BEST INTERESTS. FORM 990, PART VI, SECTION B, LINE 15 THE BOARD USED A PROCESS OF BENCHMARKING OTHER SIMILAR NON-PROFIT ORGANIZATIONS IN THE AREA TO DETERMINE THE COMPENSATION OF THE PRESIDENT AND CHIEF EXECUTIVE OFFICER AND OTHER TOP MANAGEMENT OFFICIALS. THE ORGANIZATION USES AN OUTSIDE FIRM TO PERFORM A COMPREHENSIVE REVIEW OF COMPENSATION FOR KEY EMPLOYEES AS THEY ARE HIRED. FORM 990, PART VI, SECTION C, LINE 19 FORM 990 IS AVAILABLE BY WRITTEN REQUEST TO THE ORGANIZATION. FORM 990, PART XI, LINE 9: 2024 FRAUD LOSS -827,343. 2024 CRISIS COST -3,447,225. FORM 990, PART XII, LINE 2B: A NEW INDEPENDENT AUDIT FIRM HAS BEEN ENGAGED TO COMPLETE THE FINACIAL STATMENT AUDIT FOR THE YEAR ENDED DECEMBER 31, 2024. AS OF FILING DATE OF THE FEDERAL FORM 990, THE AUDIT IS STILL ONGOING AND IS ANTICIPATED TO BE COMPLETED IN 2025. FORM 990, PART VI, SECTION A, LINE 9 MARK C. WALLACE, CEO, RESIGNED ON MAY 31, 2024 AND EMPLOYMENT OF WILLIAM SMITH, CFO, WAS TERMINATED ON MAY 31, 2024. NEITHER INDIVIDUAL CAN BE DIRECTLY CONTACTED AT THE ORGANIZATION'S ADDRESS VIA MAIL. HOWEVER, MANAGEMENT HAS THE ABILITY TO CONTACT BOTH INDIVIDUALS IF NECESSARY. DETROIT RIVERWALK CAFE LLC 1340 ATWATER ST DETROIT MI 48207 FOOD CONCESSIONS MI 293892 11712 DETROIT RIVERFRONT CONSERVANCY INC