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CARRIE JOHNSONSome members are leery of a $10.4-million financing deal offered by a local businessman.
ST. PETERSBURG - One way or another, saving the Mahaffey Theater is going to cost city taxpayers a lot of money.
While a proposed deal with local businessman William Edwards will ease the strain, it won't erase the city's obligations to the aging theater.
"This deal doesn't create a situation where the city pays nothing," said City Council chairman Bill Foster. "We still have to figure out how we're going to pay for it. And we haven't done that yet."
Even with Edwards' gift of an $8-million donation and a $2.4-million loan, the city's cost to renovate and maintain the Mahaffey will be about $9-million over five years and $24-million over 13 years.
Without Edwards' contribution, the price jumps to about $15-million over five years and about $40-million over 13.
Mayor Rick Baker said preserving the Mahaffey is essential for a city that prides itself on culture and the arts, and accepting Edwards' proposal is the most sensible way to accomplish that goal.
"We had talked at one time about tearing down the Mahaffey," Baker said. "But in my opinion ... arts and culture should be the centerpieces of this city. And you really can't have that without a performing arts center."
But some in the community are questioning whether the proposed deal to save the Mahaffey really makes sense for taxpayers.
Water damage and continued neglect have taken their toll, and the Mahaffey now has a leaky sprinkler and duct system, as well as roof damage.
The city's $9-million share also would cover theater enhancements, such as expanding the lobby, adding a plaza and walkway to the building and creating a 7-acre park for outdoor concerts.
But the city doesn't yet know where it will find the money. About $5-million in capital improvement funds have been earmarked for the project, but that still leaves a shortfall of about $4-million.
Andy Houston, internal services administrator, said that money would probably have to be borrowed. The annual debt on the $4-million is estimated to be about $400,000 for 13 years.
The proposed deal was announced by Baker at an informal City Council workshop about two weeks ago. The city's legal department is working on a more formal agreement, which the council is expected to vote on sometime in the next four to six weeks.
In return for his contribution, Edwards, who owns mortgage lending, recording and entertainment companies, would manage the Mahaffey for five years and keep all of the revenue from the theater and the outdoor concert venue.
If the Mahaffey deal were to go sour, Edwards would not be able to get back his $8-million donation.
If it works out well, and the city approves a second five-year agreement, Edwards would forgive his $2.4-million no-interest loan to the city.
As it stands, in addition to renovation costs, the city must continue to pay an annual subsidy of $1.47-million toward the Mahaffey.
Still to be resolved is who will pay for the upkeep of the outdoor park and any additional parking that may be needed.
"That's a lot of money so that Mr. Edwards can play entertainment czar," said council member James Bennett.
Bennett said the city has been pouring money into the Mahaffey for years, and without Edwards' donation, the annual subsidy would grow significantly.
But he's still uncomfortable with the way the deal is structured.
"As it stands right now, Mr. Edwards is getting a really good deal," Bennett said. "I'm just trying to think of some ways to make it a little more favorable for the taxpayers, too."
One option would be to go to the voters, as the council did in 1999 to save Sunken Gardens. The city paid about $2.26-million for the 4-acre attraction after residents approved a one-time tax to buy and preserve it.
Another would be to open the project for other bids in the hope that another benefactor or a large corporation could step in and contribute even more money.
"To say we don't have options isn't correct," Bennett said. "There's still other things we could be looking at."
But Baker said the city is running out of time. The Times Arena at the Bayfront Center, which is connected to the Mahaffey, is slated for demolition in November. He'd prefer to have a solution in place before the wrecking ball swings.
"I don't think there's time to do anything now," Baker said. "And I doubt sincerely we're going to get another offer like this one."
As for Edwards, there's no guarantee he will make a profit.
"Those are his goals," said Chuck Coward, who works at the mortgage company Edwards owns. "But it's not a given."
But Karl Nurse, president of the Council of Neighborhood Associations, said he's been disturbed by the secretive nature of the discussions.
He's also afraid the city will rush into a situation that will ultimately burden the taxpayers.
"I don't think you should do this kind of stuff behind closed doors," Nurse said. "If this is the deal, I think we ought to put all the cards on the table and talk about them."
-- Carrie Johnson can be reached at 727 892-2273 or cjohnson@sptimes.com