Aspen Film gets city council’s OK to buy Isis Theatre
The Aspen City Council approved Aspen Film's purchase of the Isis Theatre
FilmFest kicked off on Tuesday, and, to the delight of its organizer, Aspen Film, there was no drama with Aspen City Council as its audience.
The council in a 5-0 vote approved Aspen’s Film purchase of the Isis Theatre, which has a closing date of Oct. 14. Aspen Film will acquire the movie house portion of the Isis Theatre building — which comprises four screens between the ground-level and below-ground spaces, two concession stands and restroom facilities — by paying off its $2.1 million debt obligation to the city.
“We have a goal of keeping it as a community asset, and a lot of plans we’re looking into and are putting forth will keep this very much as a community asset, more so than it is now,” said Susan Wrubel, Aspen Film’s executive director and creative director.
The council also agreed to Aspen Film’s request to amend the building’s covenants to allow the organization to have internal naming rights; the “Isis Building” name on the exterior cannot be changed.
“In terms of the restrictive covenant, we’re asking to be removed,” Wrubel said. “It offers us more flexibility in terms of what we’re looking to do within the interior space, and we are embarking on a capital campaign, management changes and a purchase with a financial burden, and this will help give us a lot of latitude with our goals for the future, which I think are very aligned with what this council is looking for.”
The property comes with a deed restriction allowing theater operations only, but the ownership can change the use with City Council’s approval, according to city attorney Jim True.
Aspen Film has been a tenant of the Isis building since 2007 and is using the facility this week for its own programming with FilmFest screenings. It also had sublet the space to Los Angeles-based Metropolitan Theatres since 2007, an agreement no longer in effect.
In a related announcement issued on Tuesday, Aspen Film said it has retained Bow Tie Cinemas to run the daily Isis Theatre operations. Bow Tie Cinemas also runs Movieland 7 in Basalt. The family-owned company started in New York in 1900. The Moss family also has owned other properties and businesses in the Aspen area.
Aspen Film’s ownership of the Isis also will end a partnership it has had with the city since 2007. The partnership included a separate legal entity called Aspen Public Facilities Authority comprising City Council members, the clerk and finance director; and a second tenant called Aspen Retail Group.
Aspen Public Facilities Authority acted as the landlord, while the city “leveraged its credit to borrow about $8.5 million and then structure some leases with these two partners as tenants to operate those facilities,” Pete Strecker, city finance director, told the council.
Aspen Film and Aspen Retail’s monthly rent went toward the balance on the certificates of participation, or COPs.
“These lease agreements also included the right for either party to purchase its condominiumized share of the property if it could retire the apportioned debt service tied to their units,” said a memo to City Council from city staff.
The partnership was created out of concern that Isis Theatre would close. The building was then remodeled to preserve four of the five theaters, which Aspen Film in turn leased from the city.
The fifth theater, as well as part of the lobby space, was converted to retail space. Along with two upstairs worker-housing units, the space was acquired from Aspen Retail Group for $13 million from Aspen property developer Mark Hunt in October 2019.
“The rents were set up to basically cover the debt service, so, essentially, they would continue to use the space during the time of their leases, and they would be paying that debt service over time,” city Finance Director Pete Strecker told council members. “But, included in those lease agreements was the option to buy, and we’ve already had one of those two partners purchase their portion of the building in 2019; so, tonight we’re really talking about the second partners, Aspen Film, coming in and basically buying their portion of the space.”
Public-health orders from the pandemic crippled theater operators, including Metropolitan, which fell behind on rent, leaving the tab with Aspen Film. To help, the city deferred Aspen Film’s rent payments and refinanced the outstanding debt service. Doing so made the city the owner of the Isis Theatre.
“It’s been a challenging time,” said Councilwoman Rachel Richards. “We haven’t said the ‘pandemic’ word at this meeting … but you persevered during the pandemic, and it was very tough when theaters across the country were suffering, when operators were suffering. Where you’ve taken it from a few years ago to where it is now, congratulations.”
The city is contractually required to pay the closing costs of the sale, which Strecker estimated will be $5,000.
“This feels like a celebration more that anything else,” said Councilman Ward Hauenstein. “It’s been a struggle.”