St. Petersburg mayor rejects lone Manhattan Casino project bid

ST. PETERSBURG — Mayor Bill Foster rejected the lone bid received to bring life back to the slumbering Manhattan Casino, considered a crucial link in the revival of Midtown, the city's historic African-American commercial strip.

Foster made his decision Friday after his staff concluded the bid would have burdened the city with too much risk. It will further push back the long-anticipated full reopening of the two-story 1925 building that hosted jazz greats such as Duke Ellington and Count Basie, but closed as a dance hall in 1966.

The man whose bid was rejected, developer Larry Newsome, took strong exception to Foster's decision.

"It's a campaign against me," Newsome said. "The best thing for me is to move forward, to get the correct information to city staff. There are some things they said about me that are patently untrue. I will see if I can get them to reconsider."

Newsome declined to elaborate. Foster said he didn't know what he meant and that his decision was based solely on the economics of the deal.

"It fell short of the intended purpose of the project," Foster said.

Newsome has a notable track record in Midtown, having developed the shopping plaza in 2005 that allowed Sweetbay Supermarket to become the first grocery store to move into the neighborhood.

Earlier this year, Foster fired Goliath Davis, the city administrator who worked closely with Newsome on the Sweetbay project. On Monday, Davis said he had told Foster that he wanted to stay with the city through December to see the Manhattan project through completion. He instead was let go in early March, more than a month before the project was put out for bid.

Davis said Newsome's proposal had been worthwhile and not inconsistent with what the city has offered in incentives for past projects such as BayWalk and Newsome's prior Midtown shopping plaza.

The genesis for the Manhattan Casino project stretches back to 1996, when two days of disturbances convinced city officials they needed to provide greater economic opportunities for the surrounding area. The city green-lighted more than $100 million in projects and called the area Midtown.

By 2005, the city spent $1.4 million rehabbing the Manhattan, refurbishing the banquet hall on the second floor. An unfinished area still makes up the first floor, however, and the city hasn't found a tenant for the building.

Newsome was the only person who responded when the city sought a tenant this year. He proposed leasing the first floor to a company that operates a soul food restaurant in Harlem, N.Y. The community would lease the second floor for events.

He sought to buy the building for $2.25 million, despite the city having stated it wasn't for sale. He'd spend $250,000 on renovations. He wanted to get the money for the acquisition through a 10-year loan from the city. If the Manhattan didn't make money, Newsome asked the city to forgive the interest payments. His second option was to lease the building for 20 years.

City staff concluded Friday the bid didn't meet the requirements of the project. Newsome originally hadn't included the basic lease terms and was seeking land across the street for 200 parking spaces that the city had earmarked for industrial use.

Foster said he still plans to hold a three-day festival from Oct. 28-30 celebrating the Manhattan's re-opening. He said he'll make the facility available for the community to rent. He said he might bid out the project again in January.

But council member Leslie Curran said city officials should have worked more closely with Newsome before rejecting his offer.

"We're going to have a reopening, but what the heck are we reopening, another facility that the city will have to subsidize?" Curran said. "We have someone who is known in the community, who has had success in developing in Midtown, and we won't sit down and talk with him?"

The Manhattan is the district of council member Wengay Newton, who said he's frustrated.

"Do you see anyone else on a white horse who is waiting to do this?" Newton asked.

Yet council member Karl Nurse said he didn't think Newsome's bid was competitive enough and that it deserved to be rejected.

"We don't have to be so desperate that we had to take on all that risk," Nurse said. "Newsome does know how to put a deal together. Hopefully, he will respond when we put out to bid again and he'll give us better terms next time.

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

St. Petersburg mayor rejects lone Manhattan Casino project bid 10/10/11 [Last modified: Tuesday, October 11, 2011 12:00am]

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