Operators of Aspen’s full-time movie theater hang on with lease extension from city
The operator of the Isis Theatre in downtown Aspen will get another seven months added to its lease, giving it a lifeline through January even though its four screens have been dark since mid-March.
Members of City Council agreed in principle at their regular meeting Tuesday to allow Los Angeles-based Metropolitan Theatres, which operates the only full-service cinema in Aspen, to extend its lease retroactively from June 21 through Jan. 31.
“If this goes away, there is literally no way we could replicate this spot in town,” City Councilwoman Rachel Richards said.
Public health orders stemming from the COVID-19 pandemic have kept the Isis Theatre closed since March 17. With no tickets or concessions to sell, its operator hasn’t paid rent since April, city finance director Pete Strecker told the five-member council during the virtual meeting.
“We hope to be open at some point before too long, but the summer is getting away from us,” David Corwin, CEO of Metropolitan Theatres, said Wednesday in a phone interview.
As if the cinema industry didn’t face enough challenges posed by streaming platforms and other mediums, the pandemic has exacerbated it through health order restrictions and closures. The situation at the Isis Theatre, meanwhile, muddied further when its Metropolitan Theatres’ lease expired in June.
Metropolitan Theatres owns cinemas in California, Colorado, Idaho and Utah. All are currently closed.
“It’s just been a challenge over all of this time,” Corwin said. “And with the lease with the Isis, we’ve worked with them (Aspen Film and the city) to come up with this plan to get a few more months. We didn’t want to leave with the lease up.”
He added, “I recognize the importance of the Isis to the community. We’ve been partners to Aspen Film and we certainly want to do what we can in our role to keep the existing theater and help everyone get through this.”
The city holds a key role in the future of the Isis because it owns the theatre space from where it operates. The nonprofit Aspen Film also is integral to the public-private partnership established in October 2006.
Through the partnership, Aspen Film, which produces short- and full-length film festivals, makes monthly lease payments to the city using the rent it collects from subtenant Metropolitan Theatres. Aspen Film also had used the venue, as well as the city-owned Wheeler Opera House, for its own programming prior to the pandemic.
The city relies on the rent to pay back the 30-year certificates of participation, or COPs, to investors who backed the Aspen government’s $7.5 million acquisition of the property in 2008. The partnership was created with the intention of preserving the theater.
While the property secured the investments, the city also has been a guarantor to the COP payments, which it makes twice annually. The city’s next principal and interest payment, $129,488, is due Sept. 1. Aspen Film also owes the city $62,597 in rent payments, according to a memo from Strecker to the council.
Under the new terms of the lease, Aspen Film will receive 15% of monthly ticket sales plus food and beverage sales from Metropolitan Theatres through the end of January. Metropolitan Theatres also must pay its outstanding May and June rent over the next six months, while its April rent would be forgiven under the lease extension.
The city also would restructure its COPs payments so that they do not come due until September 2021 rather than the upcoming September. That also would give Aspen Film time to raise funds.
Once the remaining $2 million of the debt service on the COPS is paid, Aspen Film can exercise its option to acquire the property for $10, per the agreement.
The remaining $4.5 million of the balance was paid off when the other member of the public-partnership, 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.
“We’re not looking to get rid of the theater at all,” Aspen Film executive and artistic director Susan Wrubel told council. “We’re just looking for creative ways to figure out how we can still make it run and pay off this $2 million worth of debt.”
“And as I said, it’s very important for us to get the money that Metropolitan technically owes because that’s what we relied on the last close to 15 years to keep this place operating. … It’s very important for us to know there is revenue coming in and that we keep everything current and not cause the city to default on anything or to have a credit rating downturn. We certainly don’t want any of that.”
Another option the city has would be to subdivide the space it owns and put it on the market. Officeholders were not ready to take that measure.
“I would rather, as I think we all would, go forward with this working together knowing that we are all still in the pandemic,” Richards said.
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The Steadman Clinic isn’t publicly discussing its undeveloped site in Basalt but has submitted plans for a 50,000-square-foot clinic with a 44,000-square-foot underground parking structure.