Business Monday: City poised to refinance Isis building
City leaders say by taking advantage of lower interest rates, they will save nearly $450,000 by refinancing the Isis Theatre building as its movie operator tries to rebound from the economic crisis brought on by the pandemic.
At its Sept. 8 meeting, Aspen City Council’s five members unanimously approved on first reading the refinancing of roughly $2 million in debt obligation that will save the city as much as $447,088.
The debt was originally issued through certificates of participation, or COPs, in 2007 to finance the city’s $7.5 million acquisition of the Isis property. The debt currently stands at $1.96 million.
Through refinancing the 17 years left of debt service, the city would lock into interest rates of 2.89% for the first 15 years; the last two years would have a variable rate that currently is estimated at 3.51%, according to a Sept. 8-dated memo from city Finance Director Pete Strecker to City Council.
The city has been paying an interest rate of 5.66% with it “escalating to as high as 5.96% in the last few years,” Strecker’s memo said.
“We can lower that down to about 3 percent through a direct bank loan,” Strecker told council at last week’s meeting. Vectra Bank is the lender.
Saving the money also gives the city some wiggle room with its tenant Aspen Film — which leases the screens to the Isis operators, Los Angeles-based Metropolitan Theatres — “and helps with cash flow issues with our subtenant,” Strecker said.
As the tenant, the nonprofit Aspen Film has been responsible for making monthly rent payments to the city, but it fell in arrears when the turnstiles at the Isis closed. The city has agreed to defer Aspen Film’s rent payments for another year.
The deferment is “incredibly important to us a nonprofit that has been struggling because of COVID, so we’re really pleased with what has come up,” Aspen Film executive and artistic director Susan Wrubel told council.
The four-screen theater, located downtown on the 400 block of East Hopkins, shut down March 17 and reopened Aug. 28.
At a July 14 meeting, council allowed Aspen Film to extend Metropolitan’s lease, which had expired in June, through January. The revised lease forgave Metropolitan’s rent due for April, and it deferred May and June rent over the next six months. Metropolitan’s lease requires it pay $15,500 a month in rent.
Metropolitan Theatres announced Sept. 2 that moviegoers can schedule private screenings with parties of as many as 20 people at select locations, including Aspen. The screenings range in price from $125 to $155, with a $5 booking fee, and the deal allows guest to pre-order concessions to be delivered to their seat. More details at http://www.metrotheatres.com/your-private-screening.
Meanwhile, Strecker said he hopes to have the refinancing complete by Oct. 23. It still awaits City Council’s final approval at a later meeting.
The remaining $4.5 million of the balance was paid off when Isis Retail Group sold its interest in the building — two retail spaces and two deed-restricted housing units — to an LLC headed by developer Mark Hunt for $13 million in October.
A family’s decision to cancel a wedding event at The Little Nell because of COVID-19 restrictions did not entitle them to a deposit refund of nearly $60,000.