City of Tallahassee releases audit of The Edison

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By: Mariel Carbone | WCTV Eyewitness News
August 8, 2017

TALLAHASSEE, Fla. (WCTV) – A report released by City Auditor Bert Fletcher on Tuesday shows that the owners of The Edison restaurant are "fulfilling most of their obligations to the city."

The audit was requested earlier this year by City Commissioner Scott Maddox following public concern over the status of the restaurant following a management shakeup.

The audit states the primary objective was to “determine compliance by the City and a private entity, Cascades Holdings, LLC, with agreements executed by the two parties in connection with the renovations and development of a historic City electric building into a destination restaurant.”

According to the audit, the City and Cascades Holdings have complied with most of the terms of their agreement. That includes Cascades Holdings paying its rent on time, spending a minimum of $1.548 million on the Edison’s buildup and start up-costs, and operating and maintain the historic building.

“We are very pleased that on the three most fundamental and important aspects of our agreement with the City of Tallahassee, we are in full compliance. Our rent is paid in full, we invested more than the required $1.548 million private dollars into the city owned building, and we are operating and maintaining a premier restaurant,” said Mike Xifaras, managing partner of the Edison.

Despite those findings, nearly a dozen issues were identified in the audit. Those ranged from insurances issues to minor roof leak and maintenance issues.

The top three issues are identified as follow:
1. A required lease addendum documenting the appropriate distribution of property items upon termination of the lease was not prepared and executed.
2. City property was improperly collateralized as security interests
3. Property insurances costs were not passed through to Cascades Holding.

Recommendations have been made to resolve these issues.

“During the audit process, the city and the Edison were made aware of other technical obligations in the lease agreement. When they were brought to our attention, the Edison immediately took action to address the issues. The Edison will continue to work with the City of Tallahassee to address any additional open items until all obligations are met,” said Xifaras.

It was also found that there needs to be enhancements by City staff responsible for managing and overseeing the city’s relations with Cascades Holdings.

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