The long-contested plan to create a new performing arts center in The Bay park hit another significant roadblock this week when failure to reach consensus on an amended partnership agreement prompted the Sarasota Performing Arts Foundation (SPAF) to initiate a dispute resolution process with the City of Sarasota.

On Tuesday, the city received notification that the foundation was initiating the formal Alternative Dispute Resolution (ADR) process outlined in the parties’ 2022 partnership agreement. According to a letter to the city from Shumaker, Loop & Kendrick, the attorneys representing the foundation, this was prompted by amendments proposed by the city to the original agreement that would, among other things, move operational control of the facility after construction from the Foundation to a third party. 

According to a prepared statement from Sarasota City Manager Karie Friling released Tuesday night, the ADR notification was unanticipated.

“The City has been meeting with the Performing Arts Center Foundation to discuss revisions to the existing agreement between the City and the Foundation,” the statement read. “These meetings have been collaborative, honest and respectful, with the goal of advancing the project forward, while addressing necessary changes to the agreement to protect current and future taxpayer funds. The letter came as a surprise to City Leadership and the City Commission, given the ongoing discussions between the parties.”

But SPAF CEO Tania Castroverde Moskalenko says her board decided to move to dispute resolution in the hope of breaking a current impasse between the parties.

“We initiated this ADR so we could either move the project forward, or make a decision to not move it forward,” she says. “Time is money, and every month that goes by there’s an escalation in the cost of the project that is being borne by the foundation. I know people will immediately jump to the conclusion that this is coming to an end, but it’s just the next step in negotiations that will hopefully nudge the city to expedite the conversations.”

That said, Moskalenko concedes that dissolution of the public/private partnership was a distinct possibility, particularly if the dispute over operational control could not be resolved.

“There are a number of sticking points, but if we can’t resolve that one, there’s no need to discuss the other ones,” she says. “We feel that if we are going to be held accountable for raising $200 million-plus dollars, we need to have a say in how the facility is operated. Because it could be operated where the most important thing is the bottom line, and for us, as a nonprofit, balancing the money and our mission to break down barriers to the arts is crucial.”

Discussions between the two parties began in March after the City Commission unanimously accepted the foundation’s updated design, “Concept 2.0,” which lowered the estimated cost of the center from $425 million to between $260 and $295 million (of which the foundation committed to raising between $172 million and $207 million, depending on final cost). At that time, interim City Managers Dave Bullock and Jennifer Jorgensen asked for amendments to the 2022 agreement. With little progress by August, in an effort to sweeten the pot, the foundation offered to fund 100 percent of the schematic design costs in order to “maintain project momentum.”

In late September, the city provided the foundation with a 46-page proposal to supersede and replace the original partnership agreement, setting forth the operational changes as well as new conditions governing the planning, design, development, financing, construction and completion of the PAC. In general, the changes gave greater control to the city in a number of areas.

“It is called an amended agreement, but it is a completely new agreement,” says Moskalenko.

She says that the city “has a lot on its plate” and that uncertainty over the passage of Amendment 3 has likely contributed to the delays, as municipalities brace for the potential fiscal repercussions of the reduction or elimination of state property taxes. If the amendment is approved by voters on Nov. 3 it would significantly impact the amount of public dollars for the new facility slated to come from tax increment financing (TIF) district revenues based assessed on improved property values in the downtown area surrounding The Bay.

If the partnership agreement is terminated and the foundation decides to look to a different location for a new center, the TIF funds, which are restricted to The Bay and its improvements, would not be available for the project.

Thus far, the foundation says it has secured $50 million in philanthropic commitments, but has refrained from launching a capital campaign in deference to potential donors’ understandable desire for the reassurance of a finalization of the implementation plan.

Moskalenko says the foundation board has tasked her with beginning to look at alternative options should the ADR process prove futile, but no “plan B, C or D” has yet been proposed or evaluated.

“We haven’t talked a lot about the next step,” she says. “One thing we do know is that our board is committed to continuing. What we do know is that this is not the end.”

A joint statement by SPAF Board co-chairs Drayton Saunders and Jenne Britell reiterated that regardless of the dispute resolution outcome, the foundation’s mission remains firm.

“While the path forward may look different than what we originally envisioned, our passion for ensuring Sarasota’s cultural future is unchanged,” the statement said. “The Board is evaluating whether a viable opportunity may exist to advance a Performing Arts Center through a different structure, including potential independent development. No decisions have been made regarding a future location, funding structure, or timeline.”

As for the city, Friling’s statement said it will “take the necessary steps to address the ADR process and evaluate the existing agreement and the project moving forward. 

"Throughout this process," the statement continued, "the City will remain focused on fiscal responsibility and determining the best path forward in the best interest of the City and the community it serves.”