The foundation, funded by James M. Seneff’s Jr.’s CNL Financial Group, responded to the Orlando arts center’s suit two weeks ago with what’s known as “affirmative defenses” — a chance to rebut the arts center’s claims. On Thursday, the Dr. Phillips Center filed its legal response to those defenses.
In a Saturday-evening statement provided to the Orlando Sentinel, the foundation deemed the arts center’s court filing “an effort to divert attention from the fact that it has not honored the terms of our signed pledge agreement of 2011 on multiple fronts” and reiterated a claim that the arts center’s “ultimate goal is to force CCF to exit its involvement and relinquish its naming rights, so that DPC can resell those rights to whichever new donor it is courting.”
The latest filing shows that the acrimony between the two organizations dates back to 2009 — years before the center was built — when, according to the arts center, CNL Charitable Foundation adversely affected a loan deal that had been made to secure the land on which the building stands. The two nonprofits had previously reached an agreement, which would be amended several times in the coming years, that the foundation would donate $10 million to the center.
In 2009, the center bought the land, across Orange Avenue from City Hall, from First United Methodist Church for about $31.5 million that it borrowed. But, the latest court document says that after the foundation, or CCF, informed the lender that its outstanding pledge payments could not be used as collateral for the loan, “the lender placed the loan in default, increased the interest rate, and placed additional restrictions and requirements” on the center.
The resulting financial situation forced the arts center to sell the land to the city of Orlando at a loss of $17.5 million and cost it “hundreds of thousands of dollars” in interest and loan-restructuring fees, the filing says.
For its part, in an earlier statement provided to the Orlando Sentinel on Oct. 8, the foundation said it has gone out of its way to help the center financially.
“Over the past two decades, CCF has donated millions of dollars to the advancement of the Dr. Phillips Center, including making four of its payments early to help the performing arts center meet its own financial obligations,” the foundation’s statement said.
At the crux of the suit are contractual terms stating the CNL Charitable Foundation retains the naming rights to the Seneff Arts Plaza, the center’s front yard, even if it does not complete payments on its $10 million pledge.
The arts center doesn’t dispute that aspect of the agreement, but says it was backed into a corner when agreeing to the deal because the 2009 incident had left it financially vulnerable and struggling to meet other commitments.
“In other words, Defendant took advantage of the financial position Plaintiff was in (including as a result of Defendant’s failure to abide by the terms of its original pledge),” the filing states.
The arts center does not seek to change the name of the plaza but rather to collect the remaining $3 million-plus owed on the pledge. The foundation says it is not obligated to pay the remainder because the Dr. Phillips Center has violated other terms of the contract relating to the promotion of the Seneff Arts Plaza, a claim the center robustly disputes and, in the latest filing, calls “nothing more than a pretextual excuse to avoid its remaining payment obligations under the Pledge Agreement.”
Meanwhile, the foundation says the center’s actions are part of a pattern of treating donors badly, while the center says its own statistics show nearly 100% of donors are satisfied.
“This brazen attempt to place blame on CCF, one of DPC’s earliest and most ardent supporters, for the performing-arts center’s financial circumstances is yet another example of how financial donors and supporters have been poorly treated over the years,” Saturday’s statement from the foundation said.
The parties also disagree on how the matter came to court.
The arts center maintains it had reached out personally and in writing more than 18 times since January 2021 to try and resolve the matter: It “proposed numerous solutions” to CCF, “each of which were rejected … with no counterproposal or other offer of resolution.”
The Dr. Phillips Center said the final straw came when an offer of mediation was delayed for 4-5 months by the foundation because its leaders “would be vacationing at their summer homes in England.” At that point, the arts center sent the foundation a notice of default and stated that the filing of the suit would be pursued, according to the court filing.
CCF characterized the situation differently in its statement.
“This summer, we agreed in writing to a formal mediation. Although the initial dates DPC proposed for those conversations did not work, we promptly asked for dates that would,” it read. “Two months later, the response we received was a lawsuit.”
If the suit is not settled, it could take more than a year before it goes to trial.
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