6 Investigates how grant money to help South Knoxville businesse

6 Investigates how grant money to help South Knoxville businesses was spent

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The Legacy Parks Foundation acts as the fiscal agent for the South Knoxville Alliance because SKA is not a non-profit, and therefore it could not be directly granted the money. The Legacy Parks Foundation acts as the fiscal agent for the South Knoxville Alliance because SKA is not a non-profit, and therefore it could not be directly granted the money.
By SAMANTHA MANNING
6 News Reporter

KNOXVILLE (WATE) - It’s been almost a year since $70,000 were given to a South Knoxville group to help struggling businesses and 6 News investigated the money trail to find out how the funds were spent.

The grant money, which included $20,000 from the city, $20,000 from the county and $30,000 from the state was used for a marketing plan.

The South Knoxville Alliance, then called the Urban Wilderness Arts and Trade District, entered into a contract with Ackermann P.R. in July of 2013.

Ackermann P.R. no longer represents the South Knoxville Alliance, calling the group unprofessional in a resignation letter dated Jan. 13, 2014 but while under contract, Ackermann P.R. was paid $37,400 of the $70,000 in grant money.

The group still has almost $31,000 remaining in its balance from the grant.

Rebecca Husain is the co-owner of Wee Cares in South Knoxville and is the chairperson of the South Knoxville Alliance.

Husain said while the Henley Street Bridge was closed, the group was in need of a marketing plan.

"It was clear that as a business community, if we establish a brand for our area it's going to help all of us," Husain said.

Husain said the group interviewed four companies before ultimately signing with Ackermann P.R.

Marketing expenses

6 News obtained receipts showing Ackermann P.R. charged more than $18,000 for business consulting.

Related documents [PDF]

Receipts also show $4,800 were used for ads placed in the Metro Pulse.

The P.R. company also helped create a logo for the group which came at a cost of $5,000.

Cathy Ackermann, president of Ackermann P.R., told 6 News by phone that the agency also helped organize one cash mob event at Tea and Treasures but it came at no cost to the group.

According to Knox County Mayor Tim Burchett’s office, the county held ten of its own cash mobs at no cost to the taxpayers.

As for one of the most visible efforts to direct traffic to South Knoxville, the signs that once lined James White Parkway and Moody Ave were actually paid for by TDOT, not Ackermann P.R.

Erin Freeman with Ackermann P.R. did tell 6 News the agency suggested a welcome sign for the group.

Ackermann P.R. resigns

Ackermann P.R. resigned from its agreement in January and 6 News obtained the resignation letter.

Read the resignation letter [PDF]

“It is unfortunate that the relationship has deteriorated to the point that we can no longer subject the professional reputation of our firm to the kind of in-fighting and mean-spirited comments that we tried at first to help your group work through and resolve, and then tried to put aside in order to proceed in a professional manner with our work on your behalf,” Cathy Ackermann writes. “We simply cannot continue working with these unprofessional and disrespectful circumstances. Our goal is always to be a trusted partner with our clients, and this is simply not what has transpired with your group.”

Husain told 6 News the departure was mutual.

“The money was going out faster than we wanted it to and we didn't feel we'd see enough of the results from it as quickly as we felt like we needed to," Husain said.

Legacy Parks Foundation

6 News also looked into questions of a possible conflict of interest.

The Legacy Parks Foundation acts as the fiscal agent for the South Knoxville Alliance because SKA is not a non-profit, and therefore it could not be directly granted the money.

Cathy Ackermann is the president of Ackermann P.R. and is also a board member for the Legacy Parks Foundation.

Executive Director Carol Evans told 6 News there was no conflict of interest because the foundation played no role in selecting the marketing firm and was only responsible for handling the finances.

“Cathy Ackermann is on our board and so we were not a part of that process but we have really good checks and balances in place to assure there's no conflict of interest,” Evans said. “We have a conflict of interest policy. We have full disclosure. Our board is aware of these and then we're always audited annually. We want to assure that there's not a conflict of interest and there's never been. We've worked with about a dozen of different community groups so we understand that could be a concern but we have all the processes and followed those with this to make sure we were very once removed from that selection process."

Husain said despite a change in their plans midway, the marketing plan is making a difference for local businesses.

"We can build this brand,” Hussain said. “Now, we have beautiful signs and banners that we can use as we promote ourselves."

The South Knoxville Alliance is now working with Tasha Mahurin for the remainder of its marketing campaign.

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