orlandosentinel.com/business/os-performing-arts-center-deal-20110518,0,1882260.story
OrlandoSentinel.com
Deal Clears Way for Arts Center
3:06 PM EDT, May 18, 2011
After months of squabbling and uncertainty, Orlando Mayor Buddy Dyer will ask the City Council to approve a deal on Monday that will allow construction to begin almost immediately on the stalled Dr. Phillips Center for the Performing Arts.
The plan revealed Wednesday involves what Dyer called a "fail-safe" provision: Well-heeled arts center donors have signed credit guarantees that would bridge a $16 million funding gap.
"We got to the point where the final thing that needed to be done was a letter of credit, and we had the contacts and the resources to make that happen," said donor Chuck Steinmetz, a former pest control magnate who, along with developer Jim Pugh, led the effort to put their own credit behind the arts center.
"We felt very comfortable with the center's financing arrangement, and that's why we're willing to do this," Steinmetz said.
But Dyer and arts donors said they don't think the city will ever have to tap that line of credit.
The arts center has been delayed because the recession caused tourism to plummet, and with it the hotel tax collections needed to pay for roughly a third of the project. But tourism has begun to recover, and city officials project that there will be $43 million in hotel taxes available for the arts center over the next four years.
If hotel taxes fall through, they would go to Plan B: The city would tap the $16 million line of credit, along with a $25 million venues reserve fund that's already in place, and another $2 million in reserve fund interest.
Dyer said he's confident enough hotel taxes will be collected that it won't be necessary to use Plan B. Even so, the mayor said he wouldn't allow construction to start without that backup plan.
"As I have said repeatedly, the performing arts center would not move forward until there were funds identified and collectively available for the project," Dyer said. "We are not going to simply rely that the [tourist tax] will be there."
Pugh declined to say how many donors have signed credit agreements but said the number is growing.
"Right now, there's just a few, but hopefully we'll add the whole board," he said.
If city commissioners approve a construction agreement with prime contractor Balfour Beatty as expected on Monday, ground-breaking on the first phase of the arts center would likely come in June. After the recession killed the original financing plan, Dyer split the project into two phases, with the first including two of three performance halls.
The Dyer administration also previously agreed to loan the project another $31 million if hotel tax collections don't recover by the time construction is finished. But with a faster tourism recovery than previously expected — fueled in part by the opening of Universal's Wizarding World of Harry Potter — city officials say that loan probably won't be needed.
Center board members had previously hoped to jumpstart the project with help from Orange County Mayor Teresa Jacobs. They asked her for funding help in January, but she refused and instead offered blistering criticism about excessive costs and oversight problems.
Pugh said he didn't hold a grudge against Jacobs.
"We're certainly grateful to the leaders of the county who saw fit years ago to share some of its tax revenues," Pugh said.
Dyer praised arts board members' willingness to offer their own money and credit to move the project ahead.
"They have raised more money for this project than any single project in history of our city," Dyer said. "We are going to be able to break ground because of their efforts."
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