Detroit Riverfront receives $35 million fund to complete projects amid embezzlement case
DETROIT (FOX 2) - Detroit Riverfront has received a $35 million fund to complete its revitalization projects amid an ongoing embezzlement scandal.
The fund was pulled together from the philanthropic community in order to finish construction of the riverfront following the firing of William Smith, the chief financial officer of the Riverfront Conservancy, suspected of orchestrating the theft of up to $40 million. Smith is now charged with bank fraud and wire fraud.
Last year, the Detroit Riverfront Conservancy celebrated the completion of 3.5 miles of the East Riverfront vision. The new $35 million fund will complete the full 5.5 miles of the East and West Riverfront projects - including Ralph Wilson Park and the remaining elements of the Uniroyal Promenade and Robert Valade Park.
The Ralph C. Wilson, Jr. Foundation is making a grant of $10 million to the fund. Additionally, the Wilson Foundation has authorized the Community Foundation to utilize assets of their endowed funds at the Community Foundation to establish a $25 million line of credit for future payments to construction contractors.
The Community Foundation of Southeast Michigan has established a $35 million fund to pay contractors and support new fundraising as needed.
As fundraising continues or recoveries from the embezzlement are received, that line of credit will be reduced. Construction of all remaining capital projects is scheduled to be completed by fall, 2025.
"The Community Foundation for Southeast Michigan is committed to making our region a desirable place to live, work and play. That’s why we must complete the Detroit riverfront," said Richard DeVore, foundation president. "We are encouraged by how the philanthropic community is stepping up during this critically important time."
Federal investigators say Smith orchestrated the embezzlement of $40 million over the span of 11 years, using the money on trips, clothes, jewelry and more.
Smith is alleged to have used Conservancy funds to pay for charges that he and his family accrued on an American Express account. Second, Smith is alleged to have diverted Conservancy funds to a company he controlled called "The Joseph Group." Neither of these sets of expenditures were authorized or approved by the Board of the DRFC.
In the event the endowed funds need to be utilized, the Wilson Foundation will provide additional grants to their funds to enable the Community Foundation to continue to make community grants from those funds, while dollars continue to be raised, the conservance said.
Other funders have expressed interest in supporting the effort, and discussions with them are resuming.
"Completing the revitalization of Detroit’s riverfront has been the Conservancy’s mission from day one," said Matt Cullen, board chair of the Detroit Riverfront Conservancy. "We are grateful to the Community Foundation, the Ralph C. Wilson Jr. Foundation, and other philanthropic partners who believe in this vision, and whose support has made our goal of building an accessible, beautiful, and exciting international riverfront a reality."
