Gregory Williams, left, managing partner with Aracle Enterprises and Larry Newsome
BY FRANK DROUZAS, Staff Writer
ST. PETERSBURG – Larry Newsome, the Midtown developer whose company built Tangerine Plaza, opened Sylvia’s Queen of Soul Food Restaurant on the ground floor of the city-owned Manhattan Casino in late 2013. After initial success, the eatery was forced to close its doors this summer.
Newsome had plans to reopen the restaurant, but it was revealed that Sylvia’s Wood, Inc. sent his company cease and desist notices last Nov. and Dec. to stop using Sylvia’s name. This would make it impossible to reopen.
At a community discussion last Tuesday, Aug. 23 organized by Rev. Manuel Sykes, Newsome said the prospect of jobs being created and amenities added to the community would be incentives to bring in the much-needed capital.
According to Newsome, the city refused to ask the federal government for a Section 108 Loan Guarantee, which would have given him the working capital to keep the restaurant afloat.
“You can’t go and ask the federal government,” he said, “you have to ask the city to apply for the loan for you.”
Though the city has helped other nonprofits obtain this loan, he said they just decided they weren’t going to do it for Urban Development Solutions (UDS), Newsome’s nonprofit.
A letter from the mayor’s office explained to Newsome that the city wasn’t going to do it because UDS wasn’t paying its rent. But Newsome said that lack of capital wasn’t allowing him to pay.
He added that at the outset, then Mayor Bill Foster viewed the project as a partnership between UDS and the city, and over $6 million in the city’s cash, a federal government grant and some private money was invested in the project, but Newsome was still short on working capital, a main reason he said that Sylvia’s struggled.
As a result of the lack of working capital and the negative publicity surrounding his struggles with the city, business dropped dramatically. Litigation is ongoing with the city concerning the Manhattan Casino, and Newsome refutes any claims that he asked the city for millions of dollars in guarantees.
Newsome admits that due to the issues with cash flow and capital, Sylvia’s could not afford to hire the level of managerial professionals needed to run the restaurant as it deserved. But he said he did inform the city of his intentions in making Sylvia’s a success, including hiring expert managers, revamping the menu, doing more “grassroots” marketing and television advertising. His company did spend the money necessary at the outset, including close to $400,000 on equipment.
“We wanted Sylvia’s to be a first-class restaurant,” he said, “and that’s what we intended to do.”
Concerning Tangerine Plaza in Midtown, UDS lost the plaza after BB&T initiated foreclosure proceedings back in April. Newsome said the city invested only $2 million—not $7 million that is often reported—into the plaza.
Initially an intersection home to drug dens and dilapidated buildings, the plaza helped to revamp the area, especially with a Sweetbay Supermarket opening. After seven years of operation in the plaza, the supermarket was closed in 2013 and replaced by a Walmart in early 2014. Newsome said that when Walmart moved in it demanded a substantial rent decrease.
A rent decrease meant a reduction in fair market value, Newsome said, explaining that when the fair market value was reduced, UDS had more debt on the property than it had value.
Newsome asked if the city would restructure its part of the debt. Again the city refused him, and UDS continued to get the property refinanced. When Sweetbay pulled out it paid a fee of close to $2 million and most of the money went to pay down the debt while some of it went into a trust fund. Newsome said the city even blocked his efforts to obtain the money from the trust fund needed to refinance.
Community activist Theresa “Momma Tee” Lassiter asked Newsome why Mayor Rick Kriseman seems to be against him in these matters, and asked if it was something personal between Newsome and the mayor.
“I don’t have anything against him,” Newsome offered.
Lassiter said the loss of these properties that are important to the African-American community is heartbreaking. There seems to be a different “set of rules” the city plays by when it come to the black community, she said.
Calling for “civil disobedience,” Rev. Sykes said the Kriseman administration is looking to gentrify the 22nd Street Corridor.