North East ISD: AAF owes us $47k in unpaid rent

SAN ANTONIO, TEXAS - FEBRUARY 17: Kenneth Farrow II #20 of the San Antonio Commanders runs with the ball during the first half against the Orlando Apollos in an Alliance of American Football game at the Alamodome on February 17, 2019 in San Antonio, Texas. (Photo by Ronald Cortes/AAF/Getty Images)

SAN ANTONIO (KTSA News) — The North East Independent School District is beyond less than pleased about the now all-but-vanished Alliance of American Football stiffing it out of unpaid rent for its stadiums.

“$47,000,” district athletic director Karen Funk told KTSA News the operationally defunct — and apparently delinquent — league owes the school system.

“I’m sorry the league fell apart.  I wish that they would in good faith come back and pay the people who put time and effort into helping them be successful wherever their team was stationed.”

The administrator said the agreement all started out innocently.

“They contacted us in October,” Funk detailed, looking for a place for two teams work out of and train.

Eventually, the two sides came to an agreement and the league rented the district’s two stadiums for just less than a month.  The league was even dutiful in getting the initial payments laid out.

“We did get a deposit.  We got a nice deposit up front.”

Funk said it was a $20,000 deposit all paid for before they stepped onto the field.

The district also told league they would be charged on the back end of the arrangement an additional $47,000, though the administrator lamented that in hindsight, it should have “perhaps gotten that all upfront.”

While the school system is chasing down money from the AAF for a short-term rent agreement, the officials with the Alamodome — which hosted all of the league’s preseason games and the home games for the San Antonio Commanders — tell KTSA News they do not need to chase down the league for any money it owes.

The city said in a statement the league does have a balance it owes to the Alamodome for preseason games and other services rendered, but a deposit covers the balance.

North East ISD is still chasing the league for money and it is not the only vendor who feels like it got stiffed by the league.

“I designed a few print ads, made small edits to the brochure, pocket schedule, etc,” graphic designer Eddie Lepp told KTSA News.

He said the league owes him $4,500 for his services, which were for San Antonio Commanders ads and products.  But unlike the school district, Lepp never got an upfront payment.

“Those invoices are about two months overdue,” the designer explained. “They did contact me a few weeks ago trying to get information to send me the money electronically to my bank account.  When I asked them when to expect it, they said, ‘I don’t know.'”

The news the past week or so of a possible suspension to football operations followed by the reports of the suspension of operations Tuesday only confirmed both Lepp’s and the district’s fears that they may never see their money.

“When I heard about the league folding, I contacted them again to see what’s up,” Lepp said. “They never responded.”

“After watching the 10 o’clock news that some of the players had to pay for their own plane tickets home, I’m not sure we will see any money,” said Funk.

The $47,000 owed to the district and the $4,500 owed to Lepp were bound for far different places and uses.

“The money goes into the [school district’s] general fund,” Funk explained, meaning it’s money that would likely go into the day-to-day operations of North East ISD.  “It will hurt us in the fact that we already put in our overtime for our guys to work and the cleaning and some of the supplies we purchased.  But as a general rule, that $20,000 took care of that in the beginning.  But this $47,000 goes into the general fund, so it’s just money for the school district.”

“I’m small — it’s just me,” Lepp detailed for his situation. “I’ve been running the business for almost 13 years now and I’m the only employee.  So $4,500 is a big hit, but at the same time, my business is doing well, so I will survive.

“This is the biggest hit I have taken financially — business-wise — since starting my business.  It’s a big chunk of change for me and my family.  I have four kids.”

Both the district and the graphic designer are considering their legal options to see if they can retrieve what they say is owed to them.

It is more likely the school system could pursue a legal path to get their cash, but Lepp is hoping to find other vendors who have been stiffed to see if they can work together to collect their debt.

“I’m seeing if it is even worth it to go through the whole legal process,” Lepp said somewhat hopelessly.  “I’ll send [the AAF] a letter — I already wrote the letter.  I’m sending it out [Thursday] demanding payment, but the chances of them responding are slim.  My expectations are I’m just going to eat it.”

The district has not finalized its plans yet.

“We’ll be going in and talking with our lawyer next week. We’ve sent them a bill, obviously once they left in January.  We sent them a bill starting in February and we’ve been sending notices all through February and all through March,” said Funk.  “I understand that money is money, but we did our end of our jobs and we should be paid for services rendered.”

As for the league’s position on the matter, it’s not all that well known.  It would normally be pretty clear who the go-to person would be to ask, but the AAF fired nearly everyone Wednesday — including their media and public relations contacts.

It is also apparently not clear even within the organization whose responsibility it would be to pay the vendors: the financial team and group of directors in place before Tom Dundon’s investment or the group after Dundon’s investment.

The issue Dundon and his team are likely to argue is all of these debts and agreements were made before his investment was made and should be paid out by the funds and people who made the agreements initially.  The other side would argue that Dundon bought into the whole league, debts and contracts included.

“I think the way they handled their employees and their vendors and the players is pretty poor for a business,” Lepp, the self-employed designer, opined.  “They should have planned how an exit strategy could have looked like, especially since it was such a risky thing to start in the beginning, they did a poor job planning the out — planning the exit of it.”

Neither Lepp nor North East ISD are expecting to get the money they are looking for.

“It’s just kind of a shame how they handled everything,” said Lepp.

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