CHARLOTTE, N.C. (WBTV) – The Charlotte Art League’s entire board of directors resigned in December after internal revelations about months of unpaid debt, WBTV Investigates has learned.
Internal emails reveal that as of early November, the nonprofit owed roughly $200,000 in outstanding rent to Flywheel Inc., the owner of the building CAL occupies on Raleigh Street.
Flywheel did not respond to requests for comment on CAL’s current tenancy status.
The Charlotte Art League calls itself Charlotte’s oldest nonprofit art gallery and offers working studios, artist memberships, art classes, event spaces and a public gallery.
Email to board says investors were ‘demanding payment’
In a November 8 email to the entire board from Flywheel’s management company for the property, a Trinity Partners property manager said they had just had a call with the then-board president about the situation.
“Based on our call, it is safe to say that you were not aware of the current outstanding balance,” the email said to the board. The email CC’d Tony Kuhn, Flywheel president and founder, as well as acquisitions manager Jackson Goyette.
“I apologize we did not loop you in sooner, but I hope we can figure things out quickly.”
The email referenced $65,033 owed on the main space rented, and an additional $133,563 owed on the event space.
“I understand this may be a lot to digest, considering you were completely unaware, but we are at a critical point with our investors,” the property manager noted.
“They are demanding payment, transparency, and financial insight as soon as possible in order to avoid legal proceedings.”
Board of directors resigns
Multiple former board members spoke to WBTV on condition of anonymity, saying tensions rose between the board and CAL executive director Jim Dukes after the financial revelations came to light and an emergency meeting was called.
Dukes hadn’t told the board about the outstanding debt, two former board members told WBTV. Emails provided to WBTV indicated concerns about transparency were raised at the time in email chains between board members.
In an emailed response to WBTV, Dukes said the allegations from the former board members were “false and defamatory.”
WBTV asked Dukes about the emails showing the outstanding balance to Flywheel, as well as the former board member’s allegations that they had been kept in the dark.
“As to the statements and allegations that you made available to me through your email, I am issuing a formal denial of these allegations and statements, which are false and defamatory,” Dukes said in his response. “Otherwise, I do not wish to comment further on an ongoing potential dispute.”
In an October meeting agenda reviewed by WBTV, Dukes references an outstanding debt of $44,000 that CAL was working to pay off to Flywheel but does not mention the figures quoted a matter of days later in the November 8 email from the property management company.
A CAL newsletter to donors from January, shared with WBTV, references the departure of the entire board and makes a call out for new members to consider applying to serve.
Multiple artists and former board members that WBTV spoke to confirmed the resignations.
“I can’t in good faith fundraise for this organization as long as [Dukes] is at the helm,” a board member explained of their decision to resign. “However, I can’t also say let’s terminate him — because that puts the artists and the rest of the staff having to bear the brunt of what he created.”
Nonprofit’s status with NC Secretary of State
CAL is a state-licensed charitable organization and, as of early March, its status with the state was marked as active.
However, an October 12 letter that WBTV obtained from the NC Secretary of State to Dukes indicates the organization’s annual renewal application was put on hold because of a missing annual financial report.
When WBTV reviewed the documents on January 31, CAL’s nonprofit status was still on hold. As of early March, records related to the hold were removed from the state’s website and the group appeared to be restored to full status.
Documents related to its current active status, however, were not available on the NCSOS website; the most recent documentation related to its license was from late 2022.
Dukes did not comment on questions about the nonprofit’s status in his email to WBTV.
Staff departures, advisory committee formed
A staff member who was hired in late October and departed in January wrote to the board in early December, raising additional concerns about other unpaid bills, building maintenance issues and a lack of needed equipment.
“I won’t pretend that this is not a challenging time,” the staff member wrote in closing.
Currently, the CAL website only lists one other staff member besides Dukes. A CAL newsletter to members on January 20 references the departure of two staff members while navigating the “unanticipated dissolution of our Board of Directors.”
“In full transparency, the vacancies left by the departures of our team members and abrupt resignation of the Board of Directors leaves CAL in a precarious situation of self-governance,” Dukes wrote in the newsletter. “The duties and responsibilities typically divided among the BOD and CAL employees, has become the work of one.”
The newsletter said an advisory board had been formed to address creative revenue streams and fundraising, review the nonprofit’s governing documents and audit marketing and media.
The group would also review human resources, financials and facilities.
“During this transitional time, I am grateful to the efforts, time, energy, and good vibes that have supported us along the way,” Dukes wrote.
“It is important that we honor the emotions (positive and challenging) around CAL’s climbing out of the pandemic, location changes, personnel updates, and challenges we are presently facing.”
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