Financial woes continue to mount for the August Wilson Center for African American Culture.
For the first time in 15 years, the Allegheny Regional Asset District is not including funding in its preliminary budget for the facility, citing the ongoing uncertainty over the center's future.
The decision comes less than a week after Dollar Bank moved to foreclose on the center and have the building sold at sheriff sale. In court papers, it stated that the center missed its February mortgage payment of $53,639 and has not made one since then. It is trying to recover $7 million owed on the mortgage.
Dollar Bank also is seeking to have a receiver appointed to manage and maintain the $40 million center, which opened in 2009 on Liberty Avenue, Downtown.
Rather than provide any funding for the center in its 2014 preliminary budget, the asset district created a "contingency" line item in the spending plan totaling $300,000, the amount the August Wilson center would receive should it rectify its problems. The center had asked for $425,000.
David Donahoe, RAD's executive director, said another $225,000 the center was to receive this year also will be held in contingency.
Mr. Donahoe said the actions are being taken because of the possible foreclosure and appointment of a receiver. Given the uncertainty surrounding the center's future, the district and its board felt it was best to place the money in a contingency account for the time being.
"The only responsible thing the [board's allocations] committee could do is put money in contingency until the problems get straightened out one way or the other," Mr. Donahoe said.
In its report to the board, the allocations committee said that the pending foreclosure and other matters represented an "event of default" under the district's funding guidelines.
It said that it created the contingency account "in the hope and expectation that this matter will be resolved and that the center can continue with its important mission with a viable programming and financial plan."
Oliver Byrd, the center's interim president and CEO, could not be reached for comment.
The creation of the contingency account was part of a $90.2 million preliminary budget for 2014 released Tuesday by RAD. It is the first budget in RAD's 18-year history to top $90 million. The spending plan includes funding for 89 organizations.
Even before the foreclosure petition was filed by Dollar Bank, RAD had been withholding much of the August Wilson center's $300,000 allocation for 2013 because it had not produced a 2012 financial audit. It finally did so late Friday, and the audit, prepared by Schneider Downs & Co. Inc., painted a bleak picture.
It said that the center "has suffered recurring losses from operations, has not made required debt payments during the 2013 fiscal year and will need to raise additional unrestricted contributions to service its debt and its planned activities, which raises substantial doubt about its ability to continue as a going concern."
The audit also stated that management was taking steps to try to rectify the problems, including completion of the audit so that funding could be released; improved operating efficiencies; staffing changes; and increasing existing sources of revenue, including facility rentals, while developing new sources such as a restaurant cafe, naming and sponsorship opportunities, and air rights development.
A hearing will be held Nov. 4 on the Dollar Bank petition for the appointment of a receiver.neigh_city
Mark Belko: firstname.lastname@example.org or 412-263-1262. First Published October 2, 2013 4:00 AM