PANAMA CITY, Fla. (WMBB) — After an extensive battle, Panama City officials learned that FEMA will not be paying for the replacement of the Marina Civic Center after being damaged by Hurricane Michael.

“Through our demand for arbitration, the city did not prevail and did not win our argument with FEMA in regard to arbitration,” City Manager Mark McQueen said. “This is discouraging news because clearly, the city of Panama City is struggling to get back up on its feet. Clearly, this is another setback for the community, but yet, we’ve had the resolve that we’re going to continue to rebuild the arts within the city of Panama City and have a replacement for the Civic Center.”

The U.S. Civilian Board of Contract Appeals arbitration hearing back in April was decided on by a panel of three judges.

Two judges favored FEMA. The other favored the city.

“When we look at the arguments that went forward, it all came down to the HVAC system of the civic center,” McQueen said. “The central question: Was it damaged because of Hurricane Michael? We contend that it was. The two judges said we didn’t prevail in showing definitively that it was damaged because of Hurricane Michael.”

McQueen said the city showed proof through engineering inspections and even a recreation test of category five hurricane wind and rain.

The city also obtained a video from an Orlando reporter that sought shelter in the civic center as the hurricane was passing through.

“All the engineers based their professional opinions, and even was corroborated by a FEMA field inspector, that the HVAC system was saturated and should be replaced,” McQueen said. “That’s why we’re beside ourselves on this determination that was made by the three-judge panel.”

While the two judges say they were not shown enough proof to warrant FEMA funding the rebuild of the civic center, the third judge said the damages were evident.

“He even noted that FEMA’s only site inspector to assess mechanical systems agreed that we had to remove and replace the HVAC system because of the hurricane and the wind-driven rain,” McQueen said.

McQueen said now, it’s time to press on and figure out another way to fund a new performing arts and events center. The city has already hired an architectural firm to create plans.

The architects are due to come back in August with conceptual designs of what they think will work for the community.

McQueen said the city will also begin looking for other funding sources.

“This obviously puts a wrinkle into how we were thinking we would be able to do it, but we’re going to be able to get there,” McQueen said. “We’re going to have to work harder. We’re going to have to find other ways of funding to be able to support the effort that we have, which is to rebuild and build back a performing arts and events center that meets the needs of the community.”

The city will host a public meeting to give the community updates on the future performing arts and events center on July 28 at 5:30 p.m. It will be held at the Panama City Center for the Arts.