New art and digs for a Lake County arts institution, but how did things go wrong between Mount Dora Center for the Arts and G3 Development?

Julie Garisto  Leesburg Daily Commercial

Mount Dora Center for the Arts (MDCA) has shared upbeat social media posts heralding the arrival of two statues by an internationally renowned sculptor and an upcoming solo exhibition amid a lawsuit and countersuit over its lease and recent sale of its building.

After occupying the building for decades, MDCA decided to sell it for $1.3 million in 2021. The terms of the sale have been at the center of a new lawsuit and countersuit.

When will the arts center move? Where?

Gamache anticipates that the arts center will be moving into its space in January or sometime at the beginning of next year. 

The two-story brick building, which the MDCA owned and occupied on Fifth Avenue since at least 1995, has presented gallery shows, arts classes and camps, and other events in historic downtown Mount Dora, across from Donnelly Park.

“We’ll move … at the corner of Highland Street and Fifth Avenue — that’s where our new building will be,” Gamache shared, “and hopefully we’ll be there by the start of the new year.”

A real estate deal gone wrong?

Behind the scenes, a real estate deal between the Mount Dora Center for the Arts and G3 Development has complicated operations, the nonprofit’s executive director explained to the Daily Commercial this week.

A negotiated sales agreement in 2022 included three parts: a $310,000 loan from MDCA to G3 at 7% through March 1, 2032; a $240,000 sponsorship agreement to support MDCA’s Mount Dora Arts Festival paid at $24,000 over 10 years through Jan. 31, 2032; and a build-to-lease-suit agreement with lease terms for the space based on 9.75% of the building cost ($1 million cap) of a new 4,000-square-foot facility to be built on the adjacent vacant land.

MDCA’s monthly lease payments would be offset by the loan and sponsorship amounts.

But the terms were no longer met, and where it went all wrong has been explained in a vastly different manner by Gamache and Guenther.

“It’s becoming a big lawsuit,” Gamache said, exasperated. “When we sold our building here to the developer, G3 Development, they were supposed to build us a building behind our building.

Gerry Guenther, principal at G3, filed an eviction and lawsuit against the Mount Dora Center for the Arts.

“And we’re countersuing him,” Gamache said.

Guenther insists that the deal went awry when Gamache was appointed MDCA’s executive director in 2021. “Our goal was to keep the art center downtown for 20 years in a new building that we would lease to them and have the art festival remain downtown,” Guenther told the Daily Commercial.

“At the time, they were contemplating moving to another location. To ensure their success, my wife and I agreed to donate $240,0000 and be the primary sponsor for the art festival for the next decade. These agreements included responsibilities for both sides. “

Guenther says that Gamache had a different vision and direction for the arts center.

“She approached us about modifying our agreements, and we worked for two years to develop a mutually acceptable modification,” he said. “During this time, we have spent hundreds of hours and hundreds of thousands of dollars hoping to come to a resolution.” Unfortunately, they were unable to agree, and Guenther decided to move forward by filing a lawsuit.

“In my 25-plus years of developing and investing in real estate, this is the first time we have been through a situation like this,” Guenther said.

“Our goal is that our original agreement is honored and the Center for the Arts continues to thrive for generations to enjoy in downtown Mount Dora.”

Not the best time for arts organizations, financially

In June, hundreds of arts groups across Florida lost a total of $32 million in state grants to the arts due to an unexpected veto by Gov. Ron DeSantis.

Gamache said she feels like the MDCA has been kicked when it’s down because Guenther reneged on providing the new facility and a 10-year arts festival sponsorship, which he had agreed to before the sale. She has copies of checks returned to honor their lease agreement and has not received sponsorship payments.

Guenther denies the refusal of sponsorship and said he hopes they can come to a resolution.

Gamache also says that G3 has another property between Fourth and Third avenues on the same alley, and she has speculated that Guenther wants to get the plumbers and electricians to the properties at the same time to save money.

 “That’s another untruth,” Guenther countered. “We are not applying for a construction permit, which is public record, for any building behind the center of the arts’ current location and won’t until this issue is resolved. The other building is permitted and under construction with a completion date of March or April next year. There are no economies of scale on these projects.” 

When G3 drew up building plans with the city’s preservation board, they listed the arts center’s name on the project, both before and after the sale.

Guenther chalked up the wording on the document filed after the sale as a “mistake.”

“It’s, we’re not like flush with money,” Gamache said. “We had to put $7,500 retainer down to $350 an hour for an attorney. It feels like he’s nickel-and-diming us to death. … “He said to me, ‘Janet, you’re not’ — he pointed his finger in my face — ‘you are not gonna guilt me out of this.’ He said, ‘We’ll take you guys to court. … We’ll take you guys to court and we’ll take everything and you’ll pay everything. You’ll pay all the attorney fees.’ “

Once again, Guenther denies the accusation and said Gamache mischaracterized the discussion. The Mount Dora-bred investor, former Coca Cola executive and Tavares High Class of 1984 grad insists that he and his wife care about the arts and have the reputation to back up those sentiments.

“My wife and I are very grateful to have the Mount Dora Center for the Arts in downtown Mount Dora,” Guenther said.

“Our children and many others have attended and volunteered at their annual summer camp. For decades, the art festival has brought hundreds of thousands of people to our town who support our small businesses and potentially move here because of its charm. In November 2020, Cathy Hoechst (then mayor) approached us to purchase the building the Center of the Arts owned.”

Hoechst, now board president at the MDCA, backs up Gamache’s side of the story:

“As we think back on this, G3 brought to us a design, which we were willing to accept at that point in time, but when they came back to us with the cost for what they suggested, it was beyond what they were willing to pay. What happened is, if you’ll think back, it was when we came off Covid, and everything skyrocketed. So what they thought they were gonna be able to do within the design we had agreed to came back priced much higher and they were not able to do it.

“Hence, the two years of sitting down trying to come to grips with something that was gonna be mutually acceptable, which never happened. But basically, the original design that was in the agreement, we were fine with.”

Gamache regards Guenther as someone who has refused to negotiate and saw a better opportunity with opening office spaces than the agreed-upon new arts center.

“Financially, it’s a huge hit with the loss of state funding to have to pay attorney fees on top of being forced to purchase another location,” Gamache said.

“We were not the ones who approached him,” the director emphasized.

“(Guenther) is the one who came to us and said, ‘I can’t build this for you because I can’t afford to build this for you. So he’s the one who’s came to us and said, I can’t build it.’ We were fine with the original building — why wouldn’t we be? He went, we went from a 4,000-square-foot two-story building to a one-story building that he said that he wanted to modify, and we agreed to the new modification, and then he came again and said he couldn’t do that one.

“So we’ve agreed all along to these design changes. He’s the one who can’t build what he promised us.”