ST. PETERSBURG — The man who helped ignite redevelopment in Midtown in 2005 and is now working to open a restaurant in a public building there is mired in financial problems.
Larry Newsome, whose company built Tangerine Plaza, has faced several million dollars in foreclosures, court judgments and tax liens since 2010.
There was no discussion of Newsome's financial troubles when the City Council agreed in November to allow him to open a restaurant in the historic Manhattan Casino, which taxpayers spent $2.8 million to refurbish in 2005. To work, the deal requires a substantial investment from Newsome's company, Urban Development Solutions.
It's unclear how well Mayor Bill Foster and city staffers vetted Newsome, who said Wednesday that he never hid his problems.
"The city was aware of this," he said. "The city was not surprised I have judgments against me. At the end of the day, would it make a difference?"
Foster and a senior city administrator, Rick Mussett, say no.
Both said they knew about some, but not all, of his issues and stressed the city's deals are with Urban Development Solutions, not Newsome.
Taxpayers, Foster said, aren't liable if the firm defaults.
Several City Council members said they were never informed about Newsome's finances when they first approved the restaurant deal in July or modified it in November.
"I don't recall any disclosure or discussion related to any financial difficulties of Mr. Newsome," said council member Jim Kennedy. "More information is always better than less."
City Council member Wengay Newton said the group should have been able to ask Newsome if he and his firms can complete the project at the Manhattan Casino.
"If there are problems, we should know," said Newton, who blamed Foster for keeping secrets. "It's hard to govern like this when we don't know everything. The deal's already done."
The city, he said, did its due diligence and disclosed germane information to the council.
"Larry Newsome is not a party," he said. "It's UDS. The city has no risks and all rewards."
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Newsome is president of Urban Development Solutions, a nonprofit dedicated to redeveloping businesses and housing in low-income areas. Its latest tax filing lists three paid employees and five additional board members.
Urban Development Solutions opened Tangerine Plaza on city-owned land in Midtown in 2005.
The plaza made headlines this month after Sweetbay announced it is closing its store there on Feb. 13, citing underperformance.
Taxpayers invested more than $7 million to redevelop the plaza and the surrounding area. Part of that involved the city lending $1.3 million to a nonprofit called Neighborhood Lending Partners to build out the grocery location. The nonprofit, in turn, loaned the money to Urban Development Solutions.
In an unrelated transaction, Neighborhood Lending Partners now is seeking to seize an apartment building and vacant land owned by Newsome after he defaulted on loans in 2010, court records show. Newsome runs several real estate companies that own multiple properties, mostly in St. Petersburg.
Newsome characterized himself as a "victim of the real estate crash" and stressed that his personal problems do not impact Urban Development Solutions.
"UDS did not guarantee a single debt that I have," he said.
This month, the Florida Department of Revenue issued a tax lien against Queensboro 1 LLC, which manages the leases at Tangerine Plaza and is owned by Urban Development Solutions.
"We didn't pay it on time," Newsome said. "We paid it."
On Wednesday, state records still showed the lien as unpaid.
Newsome's other personal problems are detailed in court records:
• Judgments: In 2012, two banks won separate judgments totaling $788,000 on properties he owned in Pinellas and Manatee counties; Newsome also agreed to pay $54,000 for a Popeyes Chicken restaurant he runs on Central Avenue in St. Petersburg.
• Seizures: In 2011, a lender won a $1.3 million judgment to repossess Newsome's Gulfport home. Whitney Bank also seized at least eight rental homes from Newsome's businesses.
• Other unpaid bills: The IRS filed a lien for $46,682 on unpaid taxes between December 2007 and December 2009. Also, the city of Gulfport also filed a lien for $500 in unpaid utilities.
Mussett, the senior city administrator, said Newsome's troubles aren't unusual, as the financial crisis decimated many developers. He noted that Newsome has performed satisfactorily in running Tangerine Plaza and can't be faulted for Sweetbay pulling out.
The city struggled to find a suitable restaurant for the Manhattan Casino, he said, after the 2005 renovations. The two-story building, built in 1925, hosted jazz greats like Louis Armstrong and Duke Ellington but closed as a dance hall in 1966.
Last summer, the council approved a 50-year deal with Urban Development Solutions to open a restaurant as a partnership with Harlem-based Sylvia's Queen of Soul Food Restaurant.
Urban Development Solutions will pay $3,000 in monthly rent and build out part of the venue. The city could contribute up to $300,000 for permanent improvements once Newsome secures financing.
In November, city staffers asked the council to modify the deal to eight years with several renewal options. The deal also changed from a partnership to a license agreement, with Newsome assuming all the financial responsibility.
On Wednesday, council Chairman Karl Nurse said he learned a year ago from a citizen about Newsome's troubles. Staffers, he said, should have told the full council.
Asked why he didn't tell his colleagues during two discussions on the deal, Nurse said: "I thought people knew he had a number of financial reverses."
Still, Nurse isn't concerned about the Manhattan Casino.
If Urban Development Solutions fails, the city would get the improved space back with no strings attached, Nurse stressed.
"We have a series of protections if it doesn't work out," Nurse said. "It's not like people were beating down the door to rent the space."
Times researchers Natalie Watson and Caryn Baird contributed to this report. Mark Puente can be reached at [email protected] or (727) 893-8459. Follow him on Twitter at twitter.com/markpuente.