The boyhood home of Miles Davis — considered the greatest jazz trumpeter ever — is being renovated with public donations to a nonprofit corporation headed by Lauren Parks, who also heads a private, for-profit real estate firm that owns the house.
As a 501(c)(3) nonprofit, House of Miles Inc. is exempt from federal income taxes as long as donations go to the public good, such as operating the home as a museum or cultural center.
Parks, responding to written questions from the News-Democrat, said that House of Miles pays no salaries and sends receipts to people who make donations to the project. She added she has “no ethical concern” about seeking public funds to improve what is essentially private property.
But Parks has declined to say how much she has collected in donations, or to reveal her plans for the property, which is owned by her private real estate corporation, PP66 Inc.
If PP66 retains ownership in the property, nothing would prevent Parks from selling the home and surrounding land, despite using tax-free money to fix it up, or from opening the home to the public, charging admission and keeping the proceeds.
Miles Davis lived in the house at 1701 Kansas Ave. as a teenager from 1939-1945, according to an online biography. Davis, who died in 1991 at age 65, lived the last 25 years of his life in New York City. His apartment there recently sold for $495,000.
Parks, who founded House of Miles Inc., has solicited donations for two years to renovate the home, which had been heavily vandalized. The home has a new roof and siding, and the interior remains under renovation.
“The fact that the organizer of this charity is using the charitable donations in order to renovate property that she privately owns raises significant concerns about whether she is violating the rule against ‘private inurement,’” said Ray Madoff, a law professor at Boston College. “Inurement” is a legal term that refers to federal regulations prohibiting private individuals from profiting from public charities.
“The private inurement prohibition requires that a public charity that has been granted tax-exempt status under the ... Internal Revenue Code operate so that none of its income or assets unreasonably benefits any of its board members, trustees, officers or key employees,” she said. Madoff also is director of the law school’s Forum on Philanthropy and the Public Good.
Lauren Parks is the sister of former Mayor Alvin Parks, now East St. Louis Township supervisor. He serves on the board of the nonprofit House of Miles Inc.
Alvin Parks would not say whether the house will be turned into a public venture. Their mother, Lillian Parks, also is a board member of the nonprofit. She could not be reached for comment.
“Please contact Lauren,” Alvin Parks said in a written response. “She is the responding party, I am not. I support this awesome project.”
The house and land on Kansas Avenue, now Miles Davis Way, were turned over to Lauren Parks’ for-profit corporation in 2014, according to paperwork filed by a California-based real estate firm that represented Davis’ estate. The actual deed names PP66 Inc. as the owner and is signed by Erin Miles, son of the jazz great. The transaction appears to be a gift as no sale price was recorded.
According to Illinois secretary of state records, Parks is the president, secretary and registered agent for PP66 Inc. The firm’s address is the same as her home address. No other name is mentioned in the state incorporation documents.
The private inurement prohibition requires that a public charity that has been granted tax-exempt status under the ... Internal Revenue Code operate so that none of its income or assets unreasonably benefits any of its board members, trustees, officers or key employees.
Ray Madoff, law professor at Boston College and director of the law school’s Forum on Philanthropy and the Public Good
According to federal nonprofit guidelines published by Foundation Group, which advises nonprofits, “No part of the activities or the net earnings can unfairly benefit any director, officer or any private individual, and no officer or private individual can share in the distribution of any of the corporate assets in the event the organization shuts down.”
As a comparison, the Katherine Dunham Center for Arts and Humanities honors the East St. Louis native and famed dancer and is operated as a museum on Pennsylvania Avenue by a nonprofit.
David L. Thompson, vice president of Public Policy for the National Council of Nonprofits, said he could not explain the private ownership and public solicitation aspect of the Miles project. “There may be a completely legitimate reason. The tale will tell by the end game,” he said.
However, Thompson said if the nonprofit owned the property there would be no requirement to pay property taxes. PP66 Inc. paid $316 in 2016 just on the land, according to St. Clair County property tax records. The bill was mailed to Lauren Parks’ home.
“This has me scratching my head as to why they would do this,” Thompson said.
The House of Miles solicits donations from the public ranging from $25 to $5,000, although any amount is accepted. An accounting of how much has been raised is not available.
Unlike many nonprofits, which must file a Form 990 income tax statement listing all expenses and income, House of Miles is not required to provide this data. That’s because Parks has stated on a federal income tax form known as a 990N or “postcard” tax return that House of Miles brings in less than $50,000 per year, so no specific financial figures are required. Parks filed 990Ns for 2015 and 2016.
In November 2015, an advertisement online featured an invitation from Alvin Parks to the public to attend a fundraiser at the East St. Louis home of his sister “to restore and revitalize the childhood home of the most revered trumpeter of all time — Miles Davis!” The invitation noted that all donations were tax deductible but did not state that the house was privately owned by Lauren Parks.
An online news story published last August by Curbed.com reported that House of Miles wanted to raise $50,000 and that the home would be finished last year and opened as a music center for children.
I support this awesome project.
Alvin Parks, former East St. Louis mayor and brother of Lauren Parks
Incorporation documents for both the commercial PP66 and nonprofit House of Miles lapsed earlier this year for a few months but were renewed July 6 after the BND began inquiring about the project. The lapses resulted after both corporations failed to file an annual report, according to the secretary of state’s office.
In March at the South By Southwest Jazz Festival in Austin, Texas, a special event benefited the House of Miles project. It featured jazz performances by a number of performers and was free to the public, who were urged to donate to the East St. Louis project. Efforts to determine how much was raised were unsuccessful.
Karen Sundell, publicist for the Miles Davis estate, said members of the Davis family are not involved directly with fund raising matters and would only answer questions about the famed musician’s work.