Dear old D.A.D 


It's been a summer of change for the CityArts Factory, the four-story building that sits at the corner of Orange Avenue and Pine Street. And it isn't over yet.

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Most people know CityArts Factory as the place where a glass blower can be seen hard at work through the shop's street-front window, but that image is dated, because as of May, Keila Glassworks has left the building. The last of the furnaces and equipment were moved out in late August. Also gone is Chuck Dinkins, the facilities director of two years who networked with artists all over town.

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Dinkins functioned as the heart and soul of the operation until he was fired in July. He's credited with promoting CityArts Factory as ground zero for the monthly Third Thursday gallery walk, when art establishments throughout downtown stay open late and artists and art-lovers come out to support their own and mingle with the scenesters. His departure left CityArts Factory with only one on-site employee, who sits at the front entrance fielding paperwork at a large, recently purchased desk that reportedly cost $16,000.

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Such changes made arts people suspect that something's not quite working at CityArts Factory. And they were right. But exactly what is wrong there isn't an easy question to answer, because of the way the place is structured.

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Backed by city and county funds, CityArts Factory opened in 2006. A small portion of the building serves as a community art gallery, available for rent to artists for a $550-$750 fee. But CityArts Factory is also the public face ; of its owners, Downtown Arts District Inc., a private, nonprofit foundation that makes its money by leasing the non-public gallery space in the 20,000-square-foot building for commercial use by arts businesses. Nonetheless, tax dollars are part of the mix in sustaining the struggling venture. From 2006 to 2009, the city and county contributed approximately $1.75 million to the CityArts Factory. It's a valid question to ask whether or not the results -– apparently window dressing for downtown Orlando – justify the expense. Is it really serving the city's arts to have all that money dropped into one bucket?

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Two D.A.D.s

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Don't confuse D.A.D. Inc. with the geographical location also called the Downtown Arts District, whose boundaries are defined by Washington Street on the north, East Anderson Street on the south, South Rosalind Avenue on the east and Garland Avenue on the west. They are different entities that share the same acronym.

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If things had gone according to schedule and the recession hadn't crashed the party, the Dr. P. Phillips Orlando Performing Arts Center would be under construction by now and the CityArts Factory would be a short hop up Orange Avenue, creating a splashy presence of performing and visual arts structures. But the DPAC project is still in purgatory, and CityArts Factory has been left stranded by the economic downturn that halted ostentatious visions for downtown, at least for now.

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Earlier this year, D.A.D. Inc. had trouble paying its bills. As the guarantor of the lease, the city had to help out until D.A.D. caught up, which it did by downsizing staff and other belt-tightening measures. But the problems also exposed the vulnerability of CityArts Factory's business model, a plan that even those familiar with the place don't seem to fully understand. That lack of clarity could be due to the fact that D.A.D. Inc. is run by a volunteer executive board, a cast of power players including artist Donna Dowless and attorney Kurt Bauerle. Painter and architect Monte Olinger is the president through next year, but he's been low-key of late because of personal issues.

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Dowless and Bauerle, however, have been a part of D.A.D. Inc. since the beginning in 2002, so there's serious passion and ego on the line, creating a fierce determination to keep D.A.D. Inc. solvent.

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Kind of like a mall'

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The city of Orlando leases the CityArts Factory building at 29 S. Orange Ave. – built in 1917 and now valued at about $1 million – from owner Edward Webman for approximately $26,000 a month. According to Bauerle, D.A.D. Inc. spent $1.5 million in renovations to the building in 2006, including in-kind donations, to spruce it up and construct floor plans for individual rental spaces.

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Orange County chipped in, awarding CityArts a $200,000 cultural facilities grant in 2006, plus $76,000 in 2007 to erect its lighted signage. The city's Community Redevelopment Agency has invested the majority of the funding, approximately $1.4 million including matching grants, parceled out in yearly installments.

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The city also contributes to D.A.D. Inc. by subleasing the CityArts building to them for the same $26,000 amount it pays to Webman per month. In other words, the city pays the building owner, and CityArts Factory pays the city. According to Dowless and Bauerle, D.A.D. have been good tenants, paying its $26,000 per month in rent on time, though they did get behind a bit earlier this year.

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To satisfy its IRS status as a private ; 501(c)(3), D.A.D. Inc.'s mission statement is to "[s]upport arts groups by developing opportunities to lease space in downtown Orlando." That's how the CityArts Factory became the front, of sorts, for the commercial venture. The four stories and ample square footage of the building are parceled into units of varying sizes that are available for lease as gallery space. Leasing those spaces is, in part, how D.A.D. makes its rent money, in addition to special events, art sales and private donations.

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"[CityArts Factory] is kind of like a mall," says D.A.D.'s executive director of nine months, Shanon Larimer. He's been driving the changes and is most proud of the social networking site he developed, OrlandoSlice.com, which is the new face of D.A.D.

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According to Larimer, the current first-floor tenants include the red-hued Roho Art and Coffee, a mixed-use business that's a Cuban café featuring art by Latin artists. Roho was recently awarded a license to serve beer and wine, though it won't be allowed outside the confines of the café, so there will be no wandering around CityArts Factory with sangria in hand. (That was the concern expressed by Frank Billingsley, the city's economic development director, in correspondence on file at the city about the issue.)

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Another tenant is Pound Gallery, also the home of Jim Faherty and Church Street Concepts Inc. Pound Gallery is the oldest tenant at CityArts Factory and was just relocated to the largest space in the building. Church Street Concepts is the holding company for several Orlando nightclubs, including Mako's. Pound Gallery's niche is contemporary art, and last month it showed work by Swamburger and other B-Side Artists.

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Curt Littlecott's Nu Visions in Photography – "one of the top 10 wedding photographers in the world," according to American Photo Magazine – took over the gallery space at the front of CityArts Factory about six months ago. The room is set up with couches and large black-and-white photos; the company uses the space for staging photo shoots. Larimer says they also hold photography classes there. Nu Visions partner Stephanie Rounds says that they are currently renegotiating the lease on the space, which she says they have found to be productive for their business.

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Also on the first floor is the Orlando Magic Foundation Classroom (available for $100 per hour), which is rarely utilized for education, but can also be rented for exhibitions. There's an open invitation for the public to use the space to create art, and lockers in the room are available for art-supply storage. (In reality, the offer is not practical and the space has rarely, if ever, been used for that purpose, though recent promotional materials continue to sell the amenity.) The Kiene-Quigley Community Gallery, which can be rented by the public, is a first-floor staple of CityArts.

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Currently up for rent are the spaces previously occupied by Keila Glassworks and Pound Gallery. Cost is $22 per square foot, which is the going market rate for commercial space in downtown Orlando. Bauerle says that D.A.D.'s mission is to provide under-market prices to its tenants. Larimer notes that the $22 per-square-foot fee also includes utilities, so in that sense it is priced under market value.

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Sound business

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D.A.D.'s leasing arrangements appear to be at the center of its internal controversies. For example, Larimer points to Keila Glassworks as a success story, because the business was a founding anchor tenant and provided entertainment and education as well as its expertly crafted glass. They outgrew their close quarters, he says, which couldn't be expanded to accommodate more production space.

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Keila has a different take on why he moved out. He says the departure of the business was because of breakdowns in renegotiations of their lease, originally signed for three years at a rate Larimer says was 50 percent below market value. Counter to the previous lease written with D.A.D. as the guarantor (and by extension the city of Orlando), the new lease price was not discounted and it removed the safety net, making Keila the guarantor of his own business. Keila admits to late rental payments, which happened to fall during the same time period that D.A.D. was renegotiating the lease with the city and Webman.

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"I was going to re-sign a lease," says Keila, "but it was unacceptable."

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Within a week or so of the negotiations breaking down, Keila says safety inspectors were at the building, responding to phone calls made by Larimer reporting that Keila was in violation of fire codes. Keila says Larimer and Bauerle wanted him out of the building and harassed him until he left. The inspectors found nothing wrong, according to Keila, but the tenant-landlord relationship continued to erode. "Larimer helped end my tenure there," says Keila. "I'm surprised he would tout me as a success story. … We've had very limited contact."

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He says talking about his experience at CityArts Factory is "like trying to sum up three years of angst." But he's learned a lot, especially about leases, guarantors and private nonprofits. "Sometimes the best role models aren't the good ones," he concludes. He and his wife are still looking for new space for Keila Glassworks, possibly in the Parramore area, across the tracks. (The Downtown Arts District's current boundaries don't extend to the west side of I-4, though city plans call for an expansion at some point in the future.)

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Larimer recalls the situation differently. "I would absolutely disagree with [Keila's explanation] of the fire situation," he says, explaining that because Keila's lease was ending, the inspection was routine property upkeep. "[Keila] had been offered multiple options and we really wanted them to stay. I really do hope they stay in the arts district. … Ultimately, we didn't walk away from them, they walked away from us."

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As for gallery owners being asked to guarantee their own lease terms, Larimer confirms that is how business is now done at CityArts. "I think that it is smart, sound business," he says.

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The squeeze

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In 2006, there was a seemingly minor change in the wording of the lease agreement between D.A.D., Webman and the city; instead of the city leasing to D.A.D., the terms now dictated a "sublease." The tweak enabled D.A.D. to apply for county grant money, but an amendment in that document regarding the extension of the lease, from 2010 to 2013, came back to haunt the city. The extension provided for a rent increase the city couldn't afford, and so rather than fight Webman, the city played hardball.

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A May 8 memo to Webman from Laurie Botts, the city's real estate division manager, laid out the new terms. "As you are aware, the economic conditions supporting the need for the premises have greatly deteriorated; therefore, the city no longer has any use for landlord's facilities at the rental rate provided in the lease; however, the city will honor the lease for its entire original term [until 2010]."

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Bauerle says the letter was part of a strategy to get Webman to come to the negotiating table.

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City spokesperson Heather Allebaugh explains in an e-mail, "The city's lease with the building that houses the CityArts Factory began in 2005. At that time, the lease was for five years with two three-year lease extension options. That first lease option is to come up in 2010. With the lease option the current agreement calls for an increase in rent. The city did not feel we would be able to remain in the building with an increase in rent, therefore we began negotiating with the landlord to find an agreement that would allow the city to stay and for CityArts Factory to remain in the building."

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In a Sept. 10 e-mail, Bauerle confirmed a resolution with Webman. "The lease now runs through 2013 with a possible three-year extension. Rent, instead of escalating as it would have done under the original lease, is fixed at its current monthly rate through 2013. A market formula is used to calculate rent in the event the lease is extended beyond 2013."

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The deal is done, but until it was sealed, not all tenants, volunteers, employees and artists were aware of the mini-drama, involving significant taxpayer contributions. Using such an insider strategy for city funding of the arts does not instill confidence in reports of where the millions needed for the DPAC will come from, or even smaller projects such as the nonprofit Afashee Theatre at the Renaissance at Carver Square in Parramore.

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So while the city was squeezing Webman for a better deal, D.A.D. was putting a thumb down on its existing tenants. Larimer says the measures are the only way to stop D.A.D. from operating in the red. Still, Bauerle and Dowless say that D.A.D. has not altered its overall business strategy to lease to art businesses, financially unstable as they may be. Bauerle says D.A.D. is learning as it goes along, and that CAF tenants "need to bring their own strategy" and not rely on D.A.D. to make their businesses successful. "We will continue to screen applicants and be as flexible as possible in the deal-making," Dowless says.

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Money's worth?

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The question remains: What do taxpayers get for their $1.75 million in support? According to D.A.D., the money helps provide a sharp-looking venue for the 25,000-30,000 estimated visitors who come to the CityArts Factory annually. Those numbers are calculated by "observation," says Bauerle, "event by event and daily." So the figures include guests at private events, as well as repeated visits by the same people. In other words, those numbers can't be verified.

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Serendipity, however, seems to be on the side of CityArts Factory. In a huge announcement in September, the second-floor, 8,000-square-foot multi-use space (set up with a stage and bar area) will be the new home of SAK Comedy Lab starting in February 2010. Though details have not yet been confirmed, this development could be the stabilizing factor. And it will change the dynamics of the building entirely; the shows will bring ticketed customers through the facility five times a week.

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Bauerle, Dowless and Larimer all emphasize that D.A.D. Inc. is in an evolutionary process, and that they have learned from their mistakes. In the meantime, landlord Ed Webman may be the only person making money on it.

; lshepherd@orlandoweekly.com

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