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Performing-arts center critics demand financing details

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An Orange County citizen watchdog group is questioning whether taxpayers can afford to build a $425 million performing-arts center in a recession-ravaged economy and pressed Orlando Mayor Buddy Dyer on Tuesday to provide more details on how the city plans to pay for it.

CountyWatch, a bipartisan civic monitoring group, asked Orlando leaders to delay building the arts center until all of its funding is secured, and questioned whether the city would be able to pay the $10 million a year the group says it would cost to run the center.

The arts center is part of a $1.1billion downtown venue package that includes a $480 million arena and $175 million in Florida Citrus Bowl upgrades. CountyWatch focused on financing plans that call for raising $90 million by selling off the city-owned Centroplex that's the site of the existing Amway Arena and the Bob Carr Performing Arts Center.

The city has already borrowed money anticipating that sale. But CountyWatch members fear the sale price is unrealistic and want three outside appraisals to verify its value.

"After talking and listening to the [CountyWatch] members, they're wondering whether or not the city really has the money to put this together," said Lou Treadway, a former Orange County commissioner and a past president of the group. "Where's the money going to come from?"

Dyer on Tuesday dismissed the group's concerns, saying some of its complaints were off-base and exaggerated.

For instance, Dyer said it makes no sense to pay for additional appraisals of the Centroplex property now, because the city doesn't plan to sell the land for several years.

"I'm not particularly impressed with the sophistication of CountyWatch," Dyer said.

In addition, Dyer said, CountyWatch's estimate of $10 million as the city's share of annual operating costs is inflated. He said the city has pledged to contribute $1.5 million a year.

But backers of the center are relying on a patchwork of sources to pay its annual operating costs, and critics fear that money won't come through as planned, especially in a recessionary economy.

Even after investment earnings from a $25 million endowment — which arts boosters have pledged to raise — the original plan for the facility predicted the venue would carry an operating deficit of $4.1 million during its first year of operation.

That plan taps several sources to cover the shortfall, including $1.5 million from the city plus private contributions — initially set at $1 million but now at $2 million — raised by the arts center's board. Rent from as-yet-unbuilt private development around the facility — including residential, office, hotel, retail and restaurant space — would also be used to cover operating costs, according to the plan.

The city would also kick in property-tax money generated by the private development.

In an e-mail message sent late Monday night, CountyWatch also asked Dyer for more detailed information on how the city will pay for construction of the center "to assist our members in understanding the financial stability of this project."

The latest plan calls for a first phase, consisting of the shell of the building and two of its three performance halls, to begin in the spring at a cost of $260 million to $320 million. A third performance hall would be built when more money is available.

Dyer said the arts center's agreement requires that funding be in place before construction begins. "It's just evidence they don't have a clue what they're talking about," he said.

That phased-in plan is the result of the recession, which undercut a key source of funding: hotel taxes. A portion of the 6percent tourist tax collected by Orange County is earmarked for the overall venues plan, including about $130 million for the arts center.

However, hotel-tax revenues have plummeted — dropping 15 percent this year alone — which forced the phasing of the arts center and postponement of the stadium project. The new arena, which will house the Orlando Magic basketball team, is still on track to open next fall.

The financial downturn has fueled anxiety about how the projects can be funded.

Jim Pugh, board chairman of the Dr. P. Phillips Performing Arts Center, said he would not agree to a request by CountyWatch not to seek more funding from Orange County.

In recent months, Pugh and other arts-center boosters have approached the county with such a request. Orange County Mayor Rich Crotty has ruled it out so far, telling Pugh the request is "ill-reasoned and inflammatory."

Arts-center President Kathy Ramsberger said the recession means that the center needs to double its private fundraising — to $2 million a year — but expressed confidence that the money will be forthcoming.

"We've got to keep the project moving forward," Ramsberger said.

David Damron can be reached at ddamron@orlandosentinel.com or 407-420-5311. Mark Schlueb can be reached at mschlueb@orlandosentinel.com or 407-420-5417.

Copyright © 2014, The Baltimore Sun
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