Leaky roof, unpaid rent: Manhattan Casino’s future in limbo

A leaky roof, an event space with no air conditioning and a stack of past-due rent payments have put the historic Manhattan Casino’s future in jeopardy. 

The Callaloo Group, which opened the food hall inside the historic Manhattan Casino, working in tandem with the Urban Collective group, has failed in flipping the 12,000-square-foot building in the Deuces area of South St. Petersburg into a successful venture, according to Mayor Ken Welch. 

With the current contract expiring Nov. 30, Welch said he will not be executing a lease extension. 

“Given the current status of the rent owed, lack of communication and collaboration, I cannot justify an extension,” Welch said during a Thursday city council meeting, discussing an update on the lease agreement. 

“The fact is we have been very patient across two administrations and explored every option to bring this to a mutually acceptable conclusion,” he said.

“This is an issue that I’ve dealt with since Day 1. In fact, a letter of default was issued to the Manhattan Casino for past due payments last December before I took my oath of office. Literally, (since) my first week in office, our team has sought to understand the options and find the best path going forward,” he said. “The rent has not been paid, it has not been paid the entire time that I’ve been in office.” 

St. Petersburg Mayor Ken Welch speaking at the Thursday, Nov. 10 city council meeting. Image: City of St. Petersburg TV.

Welch acknowledged the financial challenges of the embattled Casino and said he and the city staff sought to find a solution with the group. 

“I’ve asked for basic information. You all know I’m an accountant so the first thing I wanted to see was bank statements, financials. Let me see if the path is changing. It took weeks, if not months, to even receive back that basic information,” he said. 

To date, the group is in the hole by $98,967 in unpaid rent to the city. 

Welch said he firmly stands on making equitable economic development a priority as a pillar of his administration, but “it does not mean anything goes. 

“We have to operate in the contractual agreements that we make, and that includes lease agreements,” he said. “The restaurant business model is clearly not working nor did it for previous restaurants at the location.” 

However, when Trevor Mallory, representing Urban Collective, took the podium, he said while he respects the mayor, he disagrees with his statements. 

“The restaurant is the only thing there that is successful. The restaurant is the only thing there that’s paying the basic bills to keep our employees paid and keep the restaurant running,” Mallory said. “The problem is we have a 6,000-square-foot event space we cannot utilize that’s 85% of our revenue because we don’t have an A/C.” 

He explained that the group absorbed previously incurred debt, but the facility hasn’t had functioning air conditioning in seven months.

“These issues have been brought to the forefront and should have been fixed,” he said, recalling in March the council said it “should have done better” and the lease was unreasonable instead of “backpedaling trying to make it work. 

“You guys don’t understand how much money we’ve lost for having no A/C in that establishment. We could have, but choose as Urban Collective to not rent that facility because we knew it wouldn’t be a good experience for the community,” he said. “It would have been our reputation on the line … this is very disappointing to hear the comments come from the administration like they’ve really assisted us in this process when that’s not the case. Rent cannot be paid if you can’t earn the money.” 

In general, the repairs and maintenance responsibility fall on the tenant; however, for significant items such as roof damage and the A/C, there’s a financial limitation of how much the tenant is responsible for, but they must show evidence the systems are being maintained to avoid premature failure of a system.  

“Our hands were cuffed the whole time,” he said, stating the receipts and invoices were provided and the group was open to communicating with the city. 

“I don’t care who pays for it at this point, we have to take care of what we own,” councilmember Gina Driscoll said, explaining she understands the divided responsibilities, but the needed repairs should be prioritized.

“The second part of that is giving this group an opportunity to pull in the revenue and try to make a business model work, especially since we knew how difficult the circumstances were,” she said. “I admire the fact that despite holes in the roof and an A/C that doesn’t work, they have been coming around to, more recently, a business that is starting to gain some momentum.” 

She described how it’s started to cultivate more interest as a destination.  

“Nobody is innocent here – mistakes have been made,” Driscoll said, “but the bottom line is it’s going to be a while before someone else comes in there and meanwhile, we have a group of seven people who have their hearts in this, and have now created a space that everyone else is starting to fall in love with too. 

“I want this group to have a chance,” she said. “Whatever we need to do to fix this money situation, let it go … what’s more important is the heart going into it and now is the time to step up and say we value that.” 

Timeline of the Manhattan Casino lease, according to the city: 

• December 2017: City awards Callaloo a five-year lease, which calls for a restaurant, lounge and commercial space on the first floor with an elegant event venue on the second level.
• September 2021: Callaloo Group now includes the Urban Collective LLC, 642 MC LLC, Mario Farias and Seamless Unlimited LLC, with the Urban Collective becoming the group’s managing member. 
• December 2021: City issues a notice of default.
• March 2022:  A presentation of the Casino status and the lease is reviewed. Talks emerged on amending an agreement regarding items that included the payments, hiring goals, apprenticeship programs and tenant obligations. One item in lease that that was not going to be amended was the current lease expiration date of Nov. 30.
• March forward: Requests were made to the Callaloo Group to provide the city with required information to move forward with an amendment, which included a status report of claims or liens. The information was not provided.
• August 2022: The city issues another default notice, and the city states it is not going to entertain an extension on the lease term. 
• November 2022: Return of premises letter .

RELATED: Following default notice, council discusses Manhattan Casino’s future

As the group has not provided the information, the city cannot create a lease amendment. 

The discussion surfaced after multiple discussions on the agreement and Welch hosting a community conversation meeting last week for the public to weigh in on the future of the Manhattan Casino, which once served as a social center and dance hall for the Deuces neighborhood for more than 30 years.

Over 200 people attended in person and online to share their thoughts. 

“I grew up on the Deuces and 16th Street as well. We all want the same thing to ensure the legacy of the Manhattan Casino remains as a source of pride and provides community impact for generations,” Welch said during the council meeting. “I think after multiple failed ventures at that site, it’s time for a fresh look at the most impactful and sustainable use that facility can be, that we ask the community what their vision of the Manhattan Casino is – that’s what our community conversation was about.” 

The city said it will have a report presented on the feedback collected from the public and it is engaging with Wannemacher Jensen Architects to do a facility inspection assessment regarding the needed repairs. The report is expected to be completed by January. 

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