State Cabinet To Consider Grove Playhouse Deal On Tuesday In Miami

By Bill Hirschman

The state will consider a crucial step Tuesday in the push to reopen the historic Coconut Grove Playhouse as a professional theater and educational complex.

The Governor’s Cabinet has slated approval of a partnership among the Miami-Dade County government, Florida International University and GableStage during its meeting on Tuesday.

The meeting is scheduled to begin at 9 a.m. although the Playhouse item is last on the agenda. It will be held at Room 1261, Building #1 at 300 NE 2nd Ave. in Miami.

The cabinet, meeting as State of Florida Board of Trustees of the Internal Improvement Trust Fund, is being asked to give its needed blessing to a business plan for the proposed theater project as well as approve a renewable 50-year lease. Technically, the land and the building belong to the state.

The cabinet is comprised of Gov. Rick Scott, Attorney General Pam Bondi, Agricultural Commissioner Adam Putnam and Chief Financial Officer Jeff Atwater.

But even if the cabinet agrees in principle, the deal is subject to several asterisks.

Persisting problems with debts, liens and claims could still scuttle the dream.  A requirement of the lease is to clear it of all “encumbrances,” meaning deals must be cut with holders of pending debts, liens and fines pending whose worth currently exceeds $1.75 million and could be far more.

If that doesn’t occur by January 14, 2014, the state will offer the land at public sale. The land at 3500 Main Highway has been eyed hungrily by developers for years.

A second concern arose this week from the state Department of Environmental Protection, which is in charge of the leasing of the land.  The state wants assurances that the project has sufficient funds for construction and that the new project will be fiscally self-sufficient once it is in operation, said Michael Spring, director of the Miami-Dade County department of cultural affairs.

They were particularly concerned that there not be a repetition of the fiscal debacle in which the Playhouse “accumulated debt and the whole thing sinking,” Spring said.

Spring was in Tallahassee this week explaining to state staffers that the project is financially sound and that “this is a different business model.”

First, he said, the project will be designed to be built within the $20 million already earmarked by the voters in bond money, plus the project will have cost estimators on hand to guard against overruns.

The proposed partnership among the county, FIU and GableStage will not be a repeat of the when the state gave the Playhouse to a non-profit board and “let them go,” Spring said. It will have safeguards because the project is technically owned by a governmental entity that will insist on  all the checks and balances for budgeting and expenditures.

Patrick Gillespie, press secretary for the Department of Environmental Protection, confirmed the state’s concerns. He wrote in an email, “Given the recent history of the Playhouse closing, financial assurances are an important component to ensure the lease is successful.”

According to the governor’s cabinet office, people may speak to the cabinet if they notify in advance the state Department of Environmental Protection, which is in charge of the leasing of the land. Contact numbers include (850) 245-2011 or 2218.

The partnership outlined in an FIU memo in February includes GableStage operating a 300-seat theater with an annual $2.6 million budget in what would likely be a new building on the current parking lot. That structure would be built with about $20 million in county bond money already earmarked by voters. The property that FIU would lease from the state would also host programs in which students would train and participate alongside theater professionals.

The project would revive activity at the site,  which was shuttered more than six years ago after a mountain of debts prompted its non-profit board of directors to close the theater during its 50th season.

Clearing the debt remains a challenge, said Spring, although negotiations were ongoing this week and “lines of communication remain open.”

Even if deals could be struck, it takes time to shepherd them through the county machinery and get approval from the commission. As a result, the county is trying to persuade the state to extended the deadline for settling the debts to May 15, 2014

“The devil is in the details,” Spring said. “There are even scenarios, if the debtors ask too much money or the county commission refuses to pay off any of the debt, in which the project “may not be worth our while.”

The “encumberances” include

–The city of Miami has four open cases of alleged violations dating back to 2009 and 2010 such as failing to maintain the exterior of the property, each assessing a $250 a day fine.  The city has not provided the county with a total owed, but they received a court judgment in February of $216,250 plus accumulating interest. Add to that an unpaid municipal assessment of $6,881 plus a vacant structure fee of $4,500.

–Aries (GH Mortgage) is a developer who invested money with the Coconut Grove Playhouse Board years ago to erase some of the Playhouse’s debts in return for involvement in any attempt to build residential or commercial development on the property. It has described its interest in the past as being about $1.5 million. The company informed the county in May that it had referred the situation to its attorneys.

–Courts have approved judgments against the property for Best Wholesale Office Products, Andri Chemical of America, Premier Printing Solutions and two state revenue tax liens, totaling about $61,000.

–The county itself holds two special assessments certificates totaling about $26,300.

For a copy of the agenda and backup documentation click here and click here

 

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