Miami Beach threatens to shut down O Cinema over contract violations

Miami Beach could shut down O Cinema after City Hall put the independent cinema on notice over a slew of alleged code and contract violations.

O Cinema opened in November 2014 in an effort to bring culture and revitalization to North Beach by showing independent, foreign, art and family films. The city agreed to let the arthouse cinema use the Byron Carlyle Theater in North Beach, 500 71st St., under a five-year contract that requires the theater to pay fees and a cut of ticket sales revenue to the city, among other stipulations.

The nonprofit organization, founded in 2011 with the help of the Knight Foundation, operates another location in Wynwood. O Cinema is a popular spot for moviegoers to catch films that are not screening at big, mainstream theaters.

But O Cinema and City Hall disagree about what is required under the contract. In a memo released Tuesday, City Manager Jimmy Morales wrote that the city audited its agreement with O Cinema last year and found numerous problems with unpaid resort and sales taxes, late payments to the city, a lack of a beer and wine license and other issues. The city notified O Cinema of the problems in December.

O Cinema’s attorney, Senen Garcia, responded Jan. 26, disputing some of the city’s claims and promising to correct its tax and alcohol permit issues.

Morales wrote that some of the issues still have not been resolved, leading him to designate O Cinema in default of its contract and threaten to cancel the agreement and shut down the operation.

“As the forgoing issues — failure to remit taxes and the unlicensed sale or service of alcoholic beverages — raise serious concerns and implicate basic noncompliance with law in connection with the management and operation of a city-owned facilities, it is my intention to exercise all remedies that may be available to the city, which may include the termination for cause of the agreement,” Morales wrote.

Kareem Tabsch, filmmaker and co-founder of O Cinema, told the Miami Herald on Wednesday that he believes all the issues can be ironed out. He said his team will continue to work with the city to reach a resolution.

“We are working in good faith to get it resolved and address their concerns, finding ways to remedy the situation,” he said Wednesday. “I think everybody values the work that we do.”

About 25,000 people went to the well-regarded theater in 2015; about 26,000 went in 2016.

Still, the city maintains the theater did not grow enough under the terms of the contract, which calls for 5 percent attendance growth annually. O Cinema responded by saying it experienced such rapid growth in its first full year of operation, 2015, that the 5 percent increase the second year is not feasible and the agreement should be amended to reflect that.

According to the audit, O Cinema was collecting resort taxes but not passing them on to the city, resulting in a debt of $5,106.87 in back taxes, interest and penalties. O Cinema’s attorney said the organization, which is a nonprofit, is exempt from paying resort taxes. O Cinema did pay the previously-owned sum in November, but the city says it hasn’t paid resort taxes since August 2017.

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The organization also believed it did not owe the state of Florida sales tax revenues, which according to the audit resulted in $154,007.25 in unreported concession revenue. O Cinema hired Garcia to navigate payment of the unpaid taxes.


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