Supporters of a new $425 million performing-arts center in Orlando are facing mounting political and financial challenges, a reality reflected in tax records that show a steep drop last year in the private donations needed to build the complex.
Donor gifts fell from $50.6 million in 2007 — the year the project was approved — to $2.8 million last year, according to records recently released by the nonprofit group behind the fundraising efforts.
Arts boosters also face deep and continuing declines in tourist-tax revenues, a key funding source for the project. To deal with those deficits, the arts-center board and city officials have proposed building its three-hall venue in phases.
But even that piece-by-piece approach carries a cost: Any major project changes or delays require a new round of votes from Orlando and Orange County leaders — and the political scrutiny that comes with it.
Backers remain confident, though, arguing that no current donors have backed off pledges, and the early building stages can start even before tourist taxes recover.
Jim Pugh, chairman of the Dr. P. Phillips Performing Arts Center board, said there's no way to say when the center will ultimately be completed without a clear idea of when tourist-tax collections will bounce back.
"It could be three or four years after we do the first stage," Pugh said. "We don't want the world to believe we're never going to get it done, so we have to continually be positive and say we're going to continue to struggle with this until we pull it off."
Filing's financial pictureRelease of the arts group's 2008 Internal Revenue Service filing provides the clearest — though still incomplete — picture yet of the project's financial underpinnings.
Though the project is a public-private effort that relies on more than $250 million in tax dollars, much of its internal operations are not subject to the same open-records laws as Florida governments.
Center representatives would not reveal financial details beyond those included in its public IRS filing, which is required under federal law. They would not, for instance, say what percentage of their charitable pledges have been collected.
The IRS records do include some fundraising details, including 2008's largest donors: a $1 million Tupperware Brands Corp. gift and, among others, a similar-sized donation from Winter Park's Lynn and Chuck Steinmetz.
Tax records show the group also secured a $35.6 million loan that year, and total expenses of about $1.9 million.
That includes $344,645 in legal expenses with the Lowndes, Drosdick, Doster, Kantor and Reed law firm in Orlando, and $386,006 in fundraising expenses.
Of the center's nine employees in 2008, only CEO Kathy Ramsberger's salary was reported. She collected $275,541 in pay, bonuses and deferred compensation, a 1 percent increase from the year before. She got a 22 percent raise in 2007.
Arts-group officials would not say what raise she received, if any, in 2009.
The new arts center is the most publicly popular piece of a $1.1 billion plan for new downtown sports and arts venues, which also include a new arena and Florida Citrus Bowl stadium upgrades.
Only construction of the Orlando Magic's new Amway Center, which is being overseen by the basketball franchise, is on track for completion on schedule in 2010.
Because of a drop in tourist-tax revenues, the Citrus Bowl faces a decade or longer delay for any substantial renovations, which were originally slated to cost $175 million.
Economy took tollCracks in the overall venue-financing plan started showing early last year when, as part of the faltering economy, the tax that tourists pay on hotel stays began to fall.
By last fall, months of continuing declines and a bleak economic forecast prompted Orlando Mayor Buddy Dyer to concede the arts center and Citrus Bowl could face delays.
So far this year, hotel-tax revenues are down 16 percent.
The even steeper 2008 decline in private donations to the arts center results from a delay in the launch of a planned capital fundraising campaign, which was put on hold as the Central Florida economy spiraled downward, Ramsberger said.
She said the 2008 tax records also do not include other undisclosed "verbal gift commitments" that can be formally signed and announced when that capital effort finally launches, likely this year.
Arts-center officials would not detail the exact amount of recent pledges, though overall they peg the fundraising effort at $86 million. Pugh indicated that once construction starts, as much as $10million in pledges could be announced.
The arts group is now working on its final designs, which will provide the clearest cost estimates yet. That could come within the next six weeks, officials said.
And progress on other fronts is being made. Orlando city commissioners this month approved a $70 million bond issue to pay for arts-center blueprints, land, permitting, demolition and site-preparation costs. The bonds are to be repaid with property taxes from a special downtown taxing district.
Changes mean scrutinyBut if arts boosters change the final blueprints or schedule, they must get approval again from city and Orange County leaders. Ramsberger said she's convinced they would support any changes that still complete the project.
"If we're all partners, and this is to realize the vision that was originally stated, we ought to lock our arms together and stay together and complete this," she said.
Orange County Commissioner Linda Stewart agreed and said her colleagues would likely get past frustrations over delays, and not repeat the tense 10-hour meeting that resulted in a 5-2 County Commission vote to approve the venue plan.
"It will be disappointing to the investors that the arts portion of the venues may be phased," Stewart said. "But it would be far more disappointing if it the arts venue fell through entirely."Copyright © 2014, Los Angeles Times