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Mayor considers lease of Manhattan Casino after rejecting buyer's deal

ST. PETERSBURG — With just two weeks to go before its grand reopening, the historic — and barren — Manhattan Casino has become the prize in a sudden tug-of-war.

On one side, Mayor Bill Foster says he is in talks with someone who could lease the two-story 1925 building along 22nd Street S. That's just a week after he rejected the only bid from a developer proposing a plan for the casino.

"I'm not prepared to discuss who it is at this point," Foster told the Times. "When all goes well, you can be in the front row at the press conference."

On the other side is the man Foster rejected, Larry Newsome. Still smarting from the Oct. 7 rebuff of his nonprofit corporation's bid, Newsome is mounting a campaign to be reconsidered. On Tuesday, he sent Foster and City Council members a 10-page rebuttal outlining the mistakes he said city staffers made in their analysis of his bid.

Newsome passed out a letter seeking community support during a Thursday candidate forum attended by nearly 300 people at Mount Zion Progressive Church in Midtown. He expected to find backing there, considering that Mount Zion's pastor, the Rev. Louis Murphy, is a director of Urban Development Solutions, the nonprofit where Newsome is president.

Although Foster said the Manhattan is not for sale, Newsome had proposed buying the building for $2.25 million. His company would spend $250,000 on renovations.

Newsome wanted to get the purchase money through a 10-year loan from the city. If the Manhattan didn't make money, Newsome would ask the city to forgive the interest payments. The second option suggested was to lease the building for 20 years.

The company's proposal came after Newsome and city staffers spent months working out details for resurrecting the Manhattan, which was a dance hall until it closed in 1966. The city spent $1.4 million to renovate it in 2005. A grand reopening is planned Oct. 28-30.

Newsome wanted to have a company that operates a soul food restaurant occupy the first floor, and lease the second floor for events.

Newsome said his proposal would create 85 jobs and generate $16 million in economic development for Midtown.

But Foster followed the advice of his staff, which concluded that the terms Newsome sought were too favorable for Urban Development Solutions and too risky for the city. He said Newsome changed the terms of the original bid, so it wouldn't be fair to accept it.

"If we reissue the request for proposal (to match what Newsome is proposing), I suspect we'll get back 100 bids because it's a pretty good deal," Foster said.

Newsome worked closely with Foster's predecessor, Rick Baker, in developing a shopping plaza in 2005 that ushered in Sweetbay Supermarket, Midtown's first grocery store. He counts Goliath Davis, a top city administrator fired by Foster in March, as a supporter of his plan.

On Thursday night, Newsome said he will meet next week with city officials to further discuss his proposal.

During a testy meeting Thursday, council members Wengay Newton and Leslie Curran questioned Foster on his decision. Both said that, considering Newsome's track record, Foster should have discussed the project with him.

It's the latest issue Curran has spotlighted that distinguishes her from Foster. This summer, she pressured Foster to disclose his plan for the possibility of the Tampa Bay Rays leaving Tropicana Field. Foster said he had a plan, but wouldn't publicly reveal it.

When Foster said he was working with another group to lease the Manhattan, but wouldn't disclose more, Curran replied: "It's another secret plan."

Times staff writer Michael Van Sickler can be reached at (727) 893-8037 or mvansickler@sptimes.com.

Mayor considers lease of Manhattan Casino after rejecting buyer's deal 10/15/11 [Last modified: Friday, October 14, 2011 5:30pm]
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