City picks up tab for failed arena restaurant venture

Last May, Orlando officials signed a five-year lease with the restaurant's backers to finally fill the vacant space on the ground floor of the city-owned arena and even held a groundbreaking when construction workers began the build-out.

Before the doors even opened at The Club at NBA City, the new restaurant at the Amway Center is dead on arrival — with taxpayers left to pick up the expensive pieces.

But the restaurant's backers defaulted on their lease with the city and never paid their contractor, leaving the space unfinished.

On Monday, Orlando Mayor Buddy Dyer and city commissioners voted to take the unusual step of using taxpayer money to pay The Club at NBA City's contractor for its work and to finish the construction. The cost: $738,000.

Dyer said paying Turner Construction will allow subcontractors to be paid and the restaurant to finally open. Levy Restaurants, the company that runs concessions in the Amway Center, will take over the space and open an as-yet-unnamed eatery when construction is finished.

"We're in the situation of having a 95 percent-finished restaurant," Dyer said. "Do we let the contractor tear everything back out and let all the pieces fall where they are, or do we go ahead and make the improvement and open the restaurant? We chose to open the restaurant."

The Club at NBA City was supposed to pay for the restaurant's construction and pay the city a percentage of its sales. Because the city is now paying for the construction, Levy Restaurants will be required to share a bigger percentage of its sales.

But there's a catch: The city won't get a cut of sales for every event. During Orlando Magic games, the sales commission will go to the team. The city will receive the sales commission during concerts and other non-Magic events.

It's the latest example of City Hall's struggles when it comes to real estate around the arena:

•The city gave $76,700 in grants to soul-food restaurant Johnson's Diner before it shut down in 2010.

•The city gave the owners of Draft Global Beer Lounge across from the arena more than $300,000 in taxpayer money, then forgave $57,000 in back rent and utilities.

•Oopsy Scoopsy Yogurt Shop closed last year after being awarded a city grant, its owners charged with trying to defraud the city.

When the Amway Center opened in 2010, city officials expected a private restaurant to move into the space in the northwest corner of the arena. But the city didn't finish the space; despite the building's gleaming exterior, the nascent restaurant had a dirt floor.

Potential tenants were put off by the cost of build-out.

In May, long after the arena had opened, the city signed a lease with GRAT, LLC, a partnership between representatives of NBA City at Universal CityWalk and the former manager of the Montecristo Club at the old city arena.