On Jan. 15, Buddy Dyer acquiesced to reality. In a statement, the Orlando mayor finally acknowledged that given the economic downturn, his $1.1 billion plan — at least $1.8 billion with interest, though given the calamitous credit market, probably more — to build an arena and a performing arts center and renovate the Citrus Bowl wasn't going to happen.

Until that day, Dyer and his staff proclaimed their plan bulletproof. In April 2008, after the housing market tanked and with signs of recession looming, city chief financial officer Rebecca Sutton expressed steadfast "confidence" in the city's proposal to build the venues on the back of tourist and downtown property taxes. The city's financial package was based on conservative estimates, she said, so it could easily weather the storm.

But the city's deal was contrived in happier times, premised on the idea that tourists would always pour in and downtown property values would always go up. "Although we knew that an extended downturn could be a problem, no one — including economists and financial experts — foresaw either the global economic crisis, or the rate at which financial sectors around the world have deteriorated," Dyer said in his Jan. 15 statement.

Maybe the extent of the financial collapse was unforeseeable, but the fact remains that detractors, especially city commissioner Phil Diamond, were dismissed as lacking vision by the venues' supporters, including city staff and the Orlando Sentinel editorial page. One could forgive Diamond some satisfaction when news came last week that the tourist tax revenues needed to fund the Citrus Bowl and Dr. P. Phillips Performing Arts Center simply weren't there. (In an interview, he demurs: "It's not about me.")

As the financial house of cards began to tumble, the mayor projected optimism. Ground has already been broken on the arena, which is scheduled to open in fall 2010. The other projects may be delayed or scaled back, he said, but the city intends to press on.

A look at the financial records, however, reveals that these projects are in greater peril than anyone's letting on, at least publicly. The Citrus Bowl renovation, which is wholly dependent on tax money, is the first on the chopping block. The 73-year-old stadium is used only a handful of times a year, and there's no prospect of landing a professional team to justify the expense of modernizing it, so it's not a priority.

The arts center, on the other hand, is. When the trio of projects was first proposed, it was by far the most popular with public. Yet the arts center is in trouble. An analysis of the center's tax records and the state of the city's funding mechanisms is anything but hopeful.

First, and perhaps most troubling, is the fact that the arts center's much-lauded $86 million in private donations is illusory. The number represents pledges, or promised donations, against which the arts center has taken out a line of credit to finance its operations. If those donations fail to materialize as expected over the next 10 years, the performing arts center may end up with a mountain of debt and no way to pay for it.

Arts center spokeswoman Laura Guitar says that won't happen. Last week, she says, center president Kathy Ramsberger called all of the center's pledged donors, and all assured her that they were still onboard. Even if that's true, the center still has to raise $24 million to meet its $110 million obligation to the $425 million project, under its public-private partnership with the city and county. Since at least April 2008, the center's reported fundraising has hovered at $86 million — not a good sign. With the center now financially vulnerable, fundraising will become more difficult. Who wants to give money to a building that might not get built?

At the end of 2007, the center had $4.8 million in cash on hand. Its expenses were just beginning to mount. Ramsberger earned $192,500 that year, and the center shelled out more than $150,000 in legal fees. The center has yet to release its 2008 tax forms and refused to let Orlando Weekly view more recent financial records. Still, it's a safe bet that the closer the center edges to its 2012 opening date, the more its expenses will rise. To continue moving forward, the performing arts center will have to run up its credit debt in the hope that eventually, enough donors will make good on their pledges. That's a risky business plan in the face of an unprecedented economic downturn.

Then there's the problem of the plummeting tourist tax collections. Orange County places a 6 percent surcharge on hotel stays to promote tourism. The first five pennies of that tax go primarily toward paying off the debt on the Orange County Convention Center and toward tourism advertising. Under the venues agreement, what's left after the county pays its bills goes to the city for the Citrus Bowl and arts center.

Last year, Orange County's base amount — the money it needs to pay its debt from those five pennies — was about $130 million. The county took in $140 million and wrote the city a $9.6 million check last week. That is less than the city needs to get the projects off the ground, but that's not the worst news. Next year, the county projects that its tourist tax receipts will dip 5 percent to 10 percent, meaning the source of money the city is counting on to pay for the venues will dry up.

"There is no money," says Orange County commissioner Linda Stewart. And, it seems, there's no telling when there will be.

The arts center's funding plan also depends on $130 million from bonds backed by the city's Community Redevelopment Agency, a downtown tax district that makes money off rising property values. The city says the CRA is fine, but given the trajectory of the downtown condo market, skepticism of its long-term viability is prudent. There's also the $20 million the arts center is supposed to receive from the sale of the Centroplex, where the Amway Arena and the Bob Carr Performing Arts Centre now stand. The city thinks it will sell that land for $90 million, but that estimate was made before the real estate market went into free-fall.

"If that's worth $30 million today, I'll be shocked," Stewart says.

Even though the city has already broken ground on the arena, that project's finances are tenuous as well. The bulk of its funding — $310 million — comes from bonds the city has taken out against the sixth cent of the county's tourism tax.

In November 2010, the city will have to start paying off that debt, at the rate of about $20 million a year for the next 30 years. But according to county reports, the sixth cent has generated about $56 million total in the last two years, or about $28 million a year. The city splits that revenue with the county's Convention and Visitors Bureau, which spends its allotment on tourism ads. Its cut for the last two years would have been $14 million.

Even if tourism revenues held steady at 2007 and 2008 levels, the city will come up $6 million short every year. If tourism declines, as it has and likely will continue to do in the immediate future, the city will get even less money to help pay for the arena. (City officials didn't respond to questions about the possible deficit by press time.)

The city does appear to have a backup plan. On Dec. 8, the council voted 6-1 (in an item buried in its consent agenda) to transfer $10 million from a risk management fund to a reserve fund for the venues. The lone dissenter, commissioner Diamond, argued that at a time when the city was raising property taxes and slashing services to make ends meet, the city should direct that money toward those things.

Mayor Buddy Dyer pushed the venues package through by promising that taxpayers wouldn't feel the pinch — that tourists and downtown property owners would pay for all of it without services being affected. That scenario looks increasingly unlikely. In fact, the venues deal has already cost county taxpayers: To seal its deal with a skeptical county commission, the Magic front office agreed to build five gymnasiums throughout the county, valued at $25 million. On top of its $50 million cash payment and $10 million donation to the performing arts center, it sounded like a good deal for taxpayers. But the county agreed to do prep work on the five sites, at a cost of $1 million per gym. To pay for the work, the county had to slash nearly half of its parks fund. The gyms are on track to be built, county officials say, though the Magic organization is a few months behind the construction schedule. And the Magic has yet to fulfill a $10 million pledge to build the arts center, even as owner DeVos spent more than $500,000 on anti—gay marriage crusades in Florida and California.

What do venues backers propose to do about the economic realities staring them in the face? The cheerleaders on the Orlando Sentinel's editorial board suggest taking out a loan from DeVos himself, which the city would pay back with interest. Under that scenario, the billionaire Magic owner — who chipped in only 10 percent of the arena's cost, even though his team will reap almost all of the concession and admissions money from home games — would pocket millions in interest from Orlando taxpayers, people who never wanted to build a new arena in the first place but were never given a chance to express their distaste for the project at the polls.

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