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Front Page » Top Stories » As Downtown Miamis Gusman Centers Money Drains Away Lifesaving Trust Delayed

As Downtown Miamis Gusman Centers Money Drains Away Lifesaving Trust Delayed

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Written by on December 16, 2010

By Jacquelyn Weiner
Liability concerns over a pending lawsuit and bond-financed repairs are delaying turnover of downtown Miami’s historic Olympia Theater to a private trust.

And without the final OK from Miami commissioners, funding to keep the center afloat continues to thin.

"If this doesn’t move at a more fluid pace… we’re going to need money," said Art Noriega, CEO of the Miami Parking Authority, at the authority’s board meeting last week. The authority manages the circa 1926 Olympia Theater at the Gusman Center for the Performing Arts, 174 E Flagler St.

Philanthropist Maurice Gusman donated the center to the City of Miami in 1975, requiring that it be managed by the Miami Parking Authority to keep the landmark out of City Hall politics.

The facility faced a dire outlook when Miami, tasked with tackling a $100 million-plus deficit, cut the center’s $478,000 subsidy from its 2011 budget.

Without that money — one-third of the Gusman’s annual budget — the theater could only last through January or February, Scott Simpson, the authority’s chief financial officer, has said.

"We are in a tight financial situation," Margaret Lake, director of the Gusman Center for the Performing Arts, said in an interview.

If negotiations over the management agreement continue to drag out, she said, the center could need more money to run, whether it comes from public or private pockets.

Still, Ms. Lake said she is "confident that we will work it out."

Aid has been promised in the form of a private-sector bailout.

Hearing of the historic theater’s plight, Herman Echevarria, CEO of BVK/Meka advertising and former president of the Hialeah City Council, stepped forward to spearhead the creation of a nonprofit to manage and fund it.

The idea is to have 100 trustees join the nonprofit, Olympia Center Inc., who pledge to contribute $10,000 a year for five years.

The parking authority’s board approved transferring management to the nonprofit pending city commission approval at its October meeting, stipulating that management return to the authority if commissioners hadn’t acted by Nov. 30.

The transfer didn’t make it to the commission by that date, so the authority’s board voted last week to extend the deadline to Feb. 28.

However, busy commission agendas aren’t the issue.

Liability concerns have slowed creation of a management agreement for Olympia Center Inc.

Among them: a pending city lawsuit with the affordable housing units housed at the Gusman and liability surrounding façade improvements paid for with city bonds.

"It’s not as crystal clear as it should be at this point," Mr. Noriega said.

In the case of the lawsuit, he said, the trust hopes to leave dealings to the city.

Miami is suing Cornerstone Group over back rent it says the developer owes on 80 affordable-housing units that are part of the city-owned Gusman Center.

The city’s share of revenue from the apartments is to go toward the Olympia Theater.

The case is to go to trial in January, Mr. Noriega said in an interview.

While the trust hopes to keep clear of city legal issues, he said at the meeting, the revenue generated from the apartments could help its bottom line.

"You have options there to create a potential long-term endowment for the theater."

Another concern: who’s liable for $1 million-plus in municipal bond dollars used for exterior façade work.

Public dollars were used to pay for outer window repairs, which the city also aims to get back from Cornerstone.

Also discussed: who should assume management should the trust dissolve years down the road — the authority or the City of Miami.

If management returns to the parking authority, "that means it’s on us to fund that money," Jami Reyes, chair of the authority’s board, said at the meeting.

Meanwhile, the slowdown in transferring management to the nonprofit isn’t helping fundraising efforts, she said.

Mr. Echevarria has secured pledges, Ms. Lake said at the meeting.

However, an account to store the money for the nonprofit is still in the works, she said.

"Pledges are great, but if we don’t have any money coming in, there isn’t a plan," Ms. Reyes said.

"I wouldn’t pledge $100,000 if I don’t know where… [the trust] is going to go."

To get things moving, Ms. Reyes said, a government official needs to spearhead efforts.

"No one at the city has taken ownership of this," she said.

"That person would be the mayor," Mr. Noriega said, adding that he would contact Miami Mayor Tomás Regalado’s office.

While the city’s cutback sparked the need for outside help, Mr. Noriega speculated that officials would want to help, given the public spotlight on the effort to save the Gusman.

"It sure wouldn’t look good to let it go dark."

Proposed County funding for community programs voted down, read the full story in e-Miami Today.

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