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Kris Engelstad McGarry describes ‘hostile’ relationship with UND administration

In the lobby of the Ralph Engelstad Arena is a bronze statue of Ralph Engelstad, longtime donor and namesake of the arena. Photo by Eric Hylden/Grand Forks Herald1 / 4
UND fans Harold and Jaden Lemar of Casselton, N.D., stock up on gear from the Fighting Sioux Shop at the Ralph Engelstad Arena Wednesday. Photo by Eric Hylden/Grand Forks Herald2 / 4
Kris Engelstad McGarry 3 / 4
Mark Kennedy4 / 4

The daughter of Ralph Engelstad, a trustee of the Engelstad Family Foundation, said Wednesday that her working relationship with UND President Mark Kennedy has deteriorated, possibly resulting in fewer Engelstad Foundation dollars donated to the university.

Kris Engelstad McGarry said in the two years since she first met Kennedy their relations have been marked by the university's "veiled threats" of litigation over the Ralph Engelstad Arena contract. Communications have been "very passive aggressive."

"In fact, it's been quite hostile at times," McGarry said. In an early meeting, she said, Kennedy told her "you won't like me when I'm mad."

Ralph Engelstad Arena, a $110 million gift from her father to the university, was completed in 2001 as the new home to UND hockey. It's currently owned and operated independently by RE Arena Inc. and is leased for use by the university. The arena, contracted to be turned over to UND in 2030, was just one topic of many discussed in a wide-ranging interview between McGarry and the Herald's editorial board. McGarry requested the meeting.

Tax records show the Engelstad Foundation has donated more than $12 million to the UND Foundation since 2011. The Herald asked if that kind of funding is in jeopardy in the future.

"Well, I will say that the funding to the school itself, yes," she said. "Anything going forward, yeah."

Declining donations

Despite any feelings of disrespect, the Engelstad Family Foundation still maintained a steady flow of monetary gifts to the school. In recent years, nonprofit finance reports obtained by the Herald show the philanthropic organization gave $4 million in 2011 to the UND Alumni Association and Foundation. In the years following, the family foundation continued to make high-level gifts to the alumni association, giving $2 million per year through 2015.

DeAnna Carlson Zink, CEO of the UND Alumni Association and Foundation, said those donations were part of an earlier pledge by the Engelstad Foundation during the ND Spirit Campaign, a 2005-2013 fundraising push.

"They were one of our early gifts," Carlson Zink said of the Engelstad dollars, which Kennedy estimated at $20 million.

Regardless, that flow of money came to an abrupt stop when Kennedy took office in 2016, which Carlson Zink said marked the conclusion of the Engelstad pledge.

For that year, the family foundation gave only $20,000 to the UND alumni group. In that same year, the foundation gave $37,000 to the club hockey program at the University of Nevada Las Vegas. Financial reports for 2017 aren't yet available, but McGarry said the sum of her family foundation's gifts to UND likely hadn't much changed.

Her relationship with the Alumni Association itself remains good, McGarry said. Regardless of the timing of the Engelstad foundation pledge, she said the sharp decline is a direct result of her unsatisfying dealings with Kennedy and other members of his administration.

For his part, the president told the Herald Wednesday afternoon that he's "always had good, cordial and civil relationships with Kris in all my exchanges with her."

"When she was here for the (University of Minnesota hockey) game last fall and in prior meetings, she said I've had a better relationship with her than any of the last three presidents," he said, adding that he didn't remember ever saying the "you won't like me" remark.

That contradicted what McGarry said Wednesday, when she came alone to the Herald. She nodded when she was asked if she was aware the conversation was on the record.

"I understand everything I'm saying," she said.

She doesn't necessarily want to see action taken against Kennedy, but said she wants the situation to get better, one way or another.

"I want to see him do his job," she said. "I don't want to see anybody fired."

Arena discussions

Though Engelstad Arena has now been in use under different presidents for more than 15 years, McGarry said issues with use of the facility have recently escalated.

According to her, Kennedy had characterized the arrangement made between the university and her father, Ralph, as written to the benefit of the donor at the expense of UND.

"(He said) my dad made a bad deal when he first gave them this gift," she said, another comment Kennedy said he doesn't recall saying. "That he made a deal that only served him—that was said directly to me. How we don't act in the best interest of the arena or the university."

McGarry lives in Las Vegas, where her parents settled to expand Ralph Engelstad's casino business. Engelstad, originally from Thief River Falls, played hockey at UND before starting a career in construction. Later, he expanded into the gambling business, operating casinos in Nevada and Mississippi.

Engelstad is known as much for his giving to UND as his staunch backing of its Fighting Sioux nickname and logo. In fact, his support of the nickname nearly led him to abandon the half-completed arena when it looked like the university was going to move away from using the Sioux imagery.

The school eventually retired the Sioux name and logo at the behest of the NCAA and now officially uses the Fighting Hawks nickname for its athletic teams. But the Sioux logo still remains in the Ralph, embedded in marble floors, and on seats and other fixtures.

Because of that, McGarry said, Kennedy has accused the family of "creating brand confusion" for the school, a charge she views as unfair. She also emphasized that her statements Wednesday to the Herald aren't connected to the nickname, nor her father's advocacy of it—that was Ralph's issue, she says, and isn't of interest to either herself or her mother, Betty.

The look of the arena is one thing. But hints made by Kennedy of litigation over the arena, McGarry says, are a key issue straining relations.

She said the president has threatened legal action in the past over parts of the arena contract, mainly over points such as how ticket revenues are shared.

Some of the unease with the arena preceded Kennedy, she said, as past UND presidents have pushed the boundaries of the agreement. However, she continued, with Kennedy, the extent of disagreement seems to have taken a new intensity.

"I will say (Kennedy) has started two separate conversations with me and said 'You know that's something I could sue over,' " McGarry said. "And I said, 'You don't want to go there with me. Do you want to talk about that now?' And he said 'no, I'm just saying I could.' "

McGarry said documents in recent weeks have been shaped by "violations he thinks we are doing and what could be taken to court."

Kennedy said he doesn't remember the conversation taking that turn, adding that his office remains "highly appreciative of the contribution of the Ralph to UND."

His administration has been "having conversations about the agreement" with representatives of the Engelstad family, he said, but those talks have "been in good faith and in cordial manner."

"If there's been any back and forth debate, if anything, we've stressed how important we think the foundational agreements are," Kennedy said, "how highly beneficial we think they are to UND and how our relationship reflects how the arena was generously given for our benefit."

In describing the conversations with the Engelstads, the president referenced "trying economic times" creating the possibility of a "significant, may I call it painful, budget adjustment in the athletic department."

He also seemed to draw a distinction between the use agreements for the Ralph and the "underlying foundational documents" for the facility. Kennedy said the university wants to ensure the former reflects the intent of the latter.

"If that in any way, shape or form is construed by the other side in anything but a positive light, that's unfortunate," he said, repeating that the university approached the talks in good faith.

The foundational documents, Kennedy said, deal with both the financial distributions from the Ralph to the university "as well as the conduct of activities within the Ralph to the benefit of the UND athletic program."

"Whatever questions should come up, the answer should be, what's the interest of the UND athletic department," he said.

Fraught relations

The root of McGarry's comments, as she describes it, is how she feels her family and its foundation has been treated by Kennedy and preceding administrations.

She said the last president the family shared a strong relationship with was Thomas Clifford, a personal friend of her father who retired in 1992.

Clifford, widely lauded in the region, died in 2009.

That shaky rapport with administration was hurt even further by the news earlier this year that Kennedy was interviewing for another job less than two years after starting at UND.

Kennedy was named a finalist this winter in the search for a new president at the University of Central Florida, a post he applied for after being recruited by an executive search firm. He interviewed twice at the UCF campus in Orlando before getting turned down for the job.

The quick development so early in his tenure seemed to confirm a trend for McGarry. In the past 16 years, she said, UND has had three full presidents and an interim, each with "their own need, their own take, their own want."

According to her, the transitory nature of presidents not local to the area—each only building a line on a resume, she said—leaves the community and state residents holding the bag after each departure.

Exits aside, McGarry had found Kennedy to be either "tone deaf" or to show "wishful thinking" in his recent dealings with her. As an example of that, she said that, when he heard she was in town this week, Kennedy asked if she'd be interested in coming to campus to look at other "investment opportunities" there.

She told the Herald she has no interest right now in funding capital projects at UND and made a point to note that her father was the family's sole alumnus of the school. Her mother, Betty Engelstad, didn't graduate from UND and McGarry is an alumna of UNLV.

Still, McGarry said her family's foundation doesn't want to turn away from UND students. She arranged a meeting for Wednesday afternoon with a cross-section of the student body in an attempt to learn how the foundation might better meet their needs on campus. She had hoped for university administrators to not be involved, but guessed that there would be some in the room anyway—a prospect she said could "dilute" the conversation.

Compounding the issues between her family's foundation and UND, she said, was what she described as a consistent difficulty with arranging effective meetings.

"I said let's meet anytime in April or May, I'm open," she said. "He said 'I'm not—not available.' " What's more, when the two did meet, she said it was difficult to get a one-on-one discussion away from a full UND delegation. In recent months, McGarry says, email correspondence between the two has included a wide range of recipients carbon-copied into the conversation. The tone of the emails, she notes, rings like it was dictated by an attorney. To her, the communication seems to belie a fight for control over the arena.

"We don't expect a parade, but I also don't expect to put on my boxing gloves," she said of the foundation's gifts.

Kennedy denied not making time for McGarry, saying he'd been accommodating in the past and had set future dates aside to meet with her. As for the group meetings, he said that was a common means of managing ongoing affairs.

When asked if he thought McGarry wasn't being truthful in her characterization of their dealings, Kennedy said he "wouldn't suggest she's being dishonest."

"For not making additional contributions, clearly, if that's her view, then she is the only person that can make that judgment," he said.

Andrew Haffner

Andrew Haffner covers higher education and general assignment stories for the Grand Forks Herald. He attended the University of Wisconsin in Madison, where he studied journalism, political science and international studies. He previously worked at the Dickinson Press.

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