Winter Haven's Historic Ritz Theatre falls on hard times again. Will the city save it?

Winter Haven officials will enter negotiations to potentially acquire the Historic Ritz Theatre as it faces direct financial challenges that could shut off its lights forever.

City Manager T. Michael Stavres said he was approached the the Ritz's board of directors in January asking whether the city would entertain the idea of taking over the historic theater. He estimated it would require the city to make an investment of about $1.3 million over the next five years.

"We pretty much, as a city, we have to go and do what we need to do for this," Commissioner L. Tracy Mercer said, upon first discussion at the March 20 agenda study.

Whether the Historic Ritz Theatre keeps its lights, Stavres said, could have a widespread, rippling economic impact on Downtown Winter Haven that goes far beyond the theatre stage.

"Fully activating that space could have a direct economic benefit by creating an arts and cultural destination," he told commissioners during the agenda study. "An inactive space of that nature could negatively impact the same businesses as well as losing customers who might not otherwise seek to visit downtown."

The Ritz's looming financial burden

The Ritz Theatre has been plagued by numerous financial issues dating back decades, including various accusations of fiscal mismanagement. This is not the first time in the past decade it has faced possible foreclosure.

In 2017, the Attorney General's Office seized control of the theater to "save" it, claiming it was underutilized, hard up for cash and in danger of being foreclosed. A five-month investigation was launched, accompanied by accusations of gross financial mismanagement, that ultimately cleared former executive director Stella Heath of criminal wrongdoing.

The courts ultimately appointed receiver Charles Davis to take over the Ritz in September 2018. At that time, the theater had $436.56 in cash, unpaid vendors, unfiled tax returns, a mortgage in arrears and was headed for foreclosure, according to the Winter Haven Chamber of Commerce's website.

It was purchased in 2019 by a group of citizens, 12 local Winter Haven families who were willing to sign personal financial guarantees of $50,000, in an attempt to preserve the local landmark, according to chamber's website. The Historic Ritz Theater was purchased with a loan obtained through Citizens Bank & Trust and moved forward operating as a 501(c)(3).

Since 2004, the city has contributed more than $515,000 to support the Ritz. In the past three fiscal years, Winter Haven has given the theater $80,000 per year from a combination of the city's General Fund and Community Redevelopment Agency Fund, Stavres said.

Despite this, the Ritz staff shared financial documents with the city to provide insight for its current fiscal challenges. In 2023, the theater had a total revenue of $241,328 and operational costs of $302,793 — a net loss of $61,465.

The theater's final mortgage payment is due in August. While its mortgage payments are current, the balance as of Feb. 1 was more than $496,000.

"To decline the Ritz, if it's not able to fulfill its financial obligations, the facility could go dark, as the bank would foreclose on the mortgage," Stavres said. "There is no economic benefit to the downtown while it's dark and its future would depend on the property's purchase by an outside party and subsequent use."

Commissioner Bradley Dantzler said he's had a hard time going "round and round" on his thoughts about possibly purchasing the Ritz, as he's generally of the mindset that government and the private sector shouldn't compete. However, Dantzler said he's done "a bit of a 180" with his knowledge of the Ritz's past.

"I look at the history here and the private sector hasn't been able to make it," he said.

Save Ritz at what cost?

The looming mortgage payment is one of several factors city commissioners will have to contend with in deciding whether to save the theatre.

Stavres said he's reviewed the three months of the theater's operations to get an idea of its monthly operating costs. Its average monthly expense for staffing and operations was roughly $21,000 per month. By contrast, its highest revenues were $6,803 in November. The venue's total revenues in January were negative.

"The Ritz is a unique facility, there's a ton of passion for it," Stavres said. "It is a tough go."

City staff have estimated it would cost $40,000 a year to operate, according to the city manager. Insurance on the aging venue was quoted at $16,000 a year.

The commissioners must consider what must be done to upkeep the nearly century-old building. Winter Haven's facility maintenance staff did a walk-through inspection and found approximately $100,000 of minor cosmetic, electrical, plumbing and structural repairs that would need to be addressed over the next two years.

Stavres said the biggest long-term need will be replacement of the theater's membrane roof, as two layers have been applied and it will need to be stripped and replaced within the next three to five years. The building has three, aging 30-ton air conditioning units, according to Stavres, that economically should be replaced at the same time. The anticipated cost of this work is about $495,000.

There could be the potential for Winter Haven staff to reach out to the Polk County Tourist Development Council to find out what grants or funds may be available to help offset this long-term capital expense, Stavres said.

There is also the question of who will run the daily operations of the theatre if taken over by the city.

"It's a highly unique building," Stavres said. "To be functional, it has highly specialized programming and needs. It's not something the city staff have any expertise or bandwidth to take on."

Potentially expanding an existing partnership

The city has already approached the nonprofit Theatre Winter Haven and Producing Director Dan Chesnicka about whether it would be interested in running the Historic Ritz Theatre. Theatre Winter Haven already operates within the municipal-owned MainStair in Chain O' Lakes Park at 210 Cypress Garden Blvd.

Prior to the COVID pandemic, Theatre Winter Haven briefly assisted in running the Ritz, providing programing and operations, Stavres said, before refocusing during the difficult time on its Mainstage productions.

Dantzler said the one time in recent history the Ritz Theatre was "rocking and rolling" was immediately prior to COVID, when Theatre Winter Haven was involved.

"It's the infrastructure Theatre Winter Haven enjoys. We have cash reserves and can book acts six months out, pay deposits so we have a predictable lineup," Chesnicka said.

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Theatre Winter Haven, a nearly 55-year-old nonprofit organization, regularly produced a five-play subscription season, two-play Academy series, a Professional series and numerous Tribute Tuesday Series events.

"We have 55 years of database of potential customers. Our marketing is targeted to people who come to these types of events," Chesnicka said.

Two of Theatre Winter Haven's current Tribute performances have had a full 700-person sell out crowd, according to Chesnicka, performances that would be better suited for the Ritz's stage. If offered to operate the theater, he said some of the Mainstage's current lineup could shift over, allowing for more community-oriented productions and events.

"The Ritz doesn't exist for itself," Chesnicka said. "It's a mechanism to get people downtown to enjoy all the other things Downtown Winter Haven has to offer."

What happens next?

With Winter Haven officials' support, city staff will begin working out a potential deal to purchase the Ritz and potentially whatever financial assets it has with the theater's board of directors, who have the final decision on what happens to the building.

"We love this place. We are homegrown and we love this town," Steve Kalogridis, the Ritz's treasurer, said. "If we can help support through fundraising, we believe it's best for the city and the community overall to take on this project. We'll work with Dan [Chesnicka] and give it the opportunity to perpetually continue to do what we are doing."

Once Stavres and City Attorney John Murphy have worked out an agreement, it will come back to the Winter Haven City Commission for discussion and a vote. The same deal will need to be approved by the Ritz's board of directors and then, for operational purposes, be worked out with Theatre Winter Haven to oversee the daily operations and programming.

Dantzler has requested the city staff consider building in a two- to three-year trial period, if it purchases the building, to see how it's performing operationally and fiscally. If it cannot break even at that time, he would recommend the city sell the building to a developer, giving it some limited control.

Sara-Megan Walsh can be reached at swalsh@theledger.com or 863-802-7545. Follow on X @SaraWalshFl.

This article originally appeared on The Ledger: Winter Haven will consider buying the troubled Historic Ritz Theatre