ST. PETERSBURG — For more than a year, Larry Newsome and his nonprofit Urban Development Solutions negotiated a deal with the city to open a restaurant in the taxpayer-owned Manhattan Casino — a key revitalization project in the Midtown area.
An agreement signed in 2012 gave Newsome control of a building where taxpayers spent $2.8 million on renovations in 2005 and another $300,000 on new improvements this year.
But while urging the City Council to support the agreement, Newsome never told the group he would transfer his deal to open a Sylvia's Queen of Soul Food Restaurant to a for-profit company backed by several prominent local African-American leaders.
They include the Rev. Louis Murphy Sr., pastor of Mount Zion Progressive Missionary Baptist Church; State Rep. Darryl Rouson, D-St. Petersburg; and Dr. Frederic Guerrier, known for organizing medical missions to Haiti.
"If they thought it was a surprise, whatever," Newsome said Friday. "We don't have to make public announcements of who our investors are."
City Council Chairman Karl Nurse disagreed.
He said Newsome and staffers should have been more forthcoming about the partners in the city-subsidized venture, adding: "I did not realize they were involved in this."
Even Rick Mussett, the city's senior administrator for development, didn't know Rouson and Murphy had connections to Sylvia's. "I did not realize until now," he said Thursday.
Some council members and staffers said they would have liked that information, but they acknowledged it wouldn't have scuttled the deal with Newsome because no other proprietor offered a proposal for the building.
New York-based Sylvia's opens next Saturday.
"When you only have one person coming forward, it likely wouldn't have changed anything," Nurse said.
For months, the anticipated opening has created a buzz in Midtown.
As Mayor Bill Foster and challenger Rick Kriseman battle for votes in Tuesday's election, the incumbent mayor frequently touts the project as one of his top accomplishments in the black community.
The Manhattan Casino became an issue during the 2009 mayor's race as Foster vowed to make getting it occupied a top priority. The City Council unanimously approved Newsome's contract on Nov. 19.
UDS pays the city $3,000 each month for rent and 5 percent of monthly profits exceeding $83,333.
A clause on the contract's last page enabled Newsome to transfer the agreement to "Aracle Foods Real Estate 1, LLC." Foster and real estate director Bruce Grimes signed the deal on Dec. 7.
Twelve days later, Newsome transferred the lease to Aracle, records show.
Newsome requested the clause in order to secure tax credits, Grimes said Thursday, adding that he didn't know about Rouson and Murphy's involvement.
The public couldn't even find that information.
Tamara Felton, a lawyer and vice president of Urban Development Solutions, incorporated Aracle in June 2012. She is the only person listed, state records show.
On Friday, Grimes said the transfer request didn't raise concerns because Newsome requested a similar clause in his contract with the city to build Midtown's Tangerine Plaza in 2005.
Council member Jim Kennedy said officials should have received more information, adding: "It would be nice to know things on the front end."
Although Newsome never publicly told the council, member Leslie Curran said she heard about the partnership when talks surfaced in 2011.
Foster and other city leaders believe the restaurant will attract more businesses to the struggling Midtown area. Foster did not return several calls for comment.
The Manhattan Casino represents much more than the refurbished banquet hall that occupies its second floor, and the restaurant on the first floor. Built in 1925 along 22nd Street S, the casino stands as a symbol to the city's segregated past and the emotional connection many residents have with it.
Duke Ellington, Count Basie and Fats Domino all played there before it closed in 1966. It has sat vacant ever since the city refurbished the complex.
Murphy declined to discuss the project.
"I don't have time to talk to you about this," he said late Thursday before hanging up a telephone on a reporter.
Rouson, who is mired in financial issues over unpaid federal taxes, said he is only an investor and plays no role in managing the restaurant. Neither he, Murphy nor Gerrier would discuss their financial stake or expected return in the Sylvia's project.
As for their involvement, "there is nothing hidden or secret," Rouson said. "Everything is subject to public records and corporate filings."
State records dispute that.
Urban Development Solutions is a nonprofit dedicated to redeveloping businesses and housing in low-income areas.
The Times reported in January that Newsome has faced several million dollars in foreclosures, court judgments and tax liens since 2010. Financial troubles recently forced him to close a Popeye's Chicken restaurant on 54th Avenue S.
When UDS built Tangerine Plaza on city-owned land, taxpayers contributed millions toward development costs. The plaza made headlines after Sweetbay Supermarket closed its store there in January.
Last month, city and business leaders announced that Walmart would open a new store at the plaza by year's end.
Former Mayor Rick Baker called Newsome a "hero." To help secure the Walmart deal, Baker's boss, businessman and philanthropist Bill Edwards, donated $300,000 to UDS for plaza upgrades.
Contact Mark Puente at [email protected] or (727) 893-8459.