Plan set to save Isis Theatre
November 28, 2006
The Aspen City Council on Tuesday unanimously agreed to a “memorandum of understanding” to save the Isis Theatre.The council first announced a general plan Oct. 10 and since has been working out some of the details. Tuesday’s agreement gives the city and its partners, the Isis Group LLC and Aspen Film (formerly Aspen Filmfest) a firm commitment to the details in the memorandum, allowing the city’s partners to take further steps toward renovating the building in time for the busiest revenue seasons next year.For the city, that means securing the certificates of deposit that will help fund the deal. The city won’t purchase the building, but through the sale of the certificates, it will use its good credit to help the other partners buy the building at a lower interest rate.The Isis Group and Aspen Film will make monthly payments over the next 30 years to pay off the certificates, much like the city would pay off a bond. But in this case, the city won’t borrow money for the purchase. It will sell the certificates to buyers, who will earn interest over time as the city pays off the certificates.Worst-case scenarioShould the partners fail to meet their monthly payments, the city could seek new tenants to meet the cost. Failing that, the city could sell the building to pay off the certificates. But if the building didn’t sell, or if it didn’t bring enough money to pay off the certificates, the city isn’t liable for any debt. Instead, the “owners” of the certificates could foreclose on the property.But city officials say allowing that to happen would be a bad idea.”In practical terms, it would be really disastrous for the city’s credit rating not to pay it,” said City Finance Director Paul Menter.Menter also said, however, that the likelihood of the Isis building not bringing in enough money to pay off the certificates is very low.
Further detailsUnder the agreement, the Isis Group will renovate a portion of the building for deed-restricted, midlevel retail space – which means it must remain midlevel retail space.Aspen Film will reconfigure the other part of the building as four movie theaters, also deed-restricted. They must remain movie theaters as long as the cinema is a viable national business. If that ever ceases to be the case, the organization’s portion of the building must remain a public meeting space.City Manager Steve Barwick said after October’s announcement that the restrictions are tied to the building, regardless of the owner.The memorandum, a public document available to the public through the city, also outlines a number of other details of the deal, including affordable housing mitigation and plans to build out a “notch” in the southeast corner of the building, near the fire station.Local philanthropist Leonard “Boogie” Weinglass, who helped Aspen Film come up with the money they needed to get the ball rolling, told the council Tuesday the theater “would be a total nightmare” if the notch isn’t filled in and used as a lobby for the reconfigured theater.”Everybody that’s been involved with this deal agrees with you completely,” Barwick told Weinglass. “It hasn’t happened yet, but all the parties are working toward that.”Menter said after the meeting that the estimated cost of filling in the notch is more than originally anticipated, and the search for a solution is part of the reason it’s taken so long to bring the memorandum before the council. The estimated cost is $700,000.As part of the deal, the city has agreed to increase the money raised through the certificates of participation by $100,000, as well as paying $36,000 over the first five years toward the buildout, if Aspen Film can come up with the remainder by Dec. 15. Aspen Film would not pay back the $36,000. Rather, Menter said, it would be treated more like a donation.
ObjectionsLocal resident and former Councilman Tim Semrau addressed the council Tuesday about concerns he has over the deal. He submitted a list of questions to Menter after seeing the memorandum of understanding for the first time Monday, and he asked the council to hold off on entering an agreement until they could hear more from the public.The majority of the three-way negotiations took place in closed-door executive sessions before the city officially announced the general structure of the deal in October.The city issued the more detailed memorandum last week, but Semrau said that’s not enough time for the public to review it.”There are many items in this [that] bear extensive public discussion,” he said. “You owe it to the public to let all the facts get transparent.”Councilwoman Rachel Richards responded that the general terms “were outlined six weeks ago” and that “none of that has changed.”Richards, Menter and Mayor Helen Klanderud clarified some of what they considered misconceptions in Semrau’s memo, such as the idea that the city “is establishing a new corporation [the ‘authority’] to purchase the Isis.””There’s not a new authority,” Klanderud said. “The authority is the same authority that has the parking garage.”In response to Semrau’s question of ownership, Richards re-emphasized the city will “not own the contract.” She also stressed the urgency in moving forward with the deal, whose primary goal is to save the theater.
“This is not something that can stretch on forever,” she said, calling it a “go or no-go deal.” The city must “go forward or risk the entire thing going away.”Richards recalled similar pleas to try to save the Motherlode as a restaurant.”We’ve lost that building because everyone thought we could just wait for a little better deal,” she said.Klanderud and Councilman J.E. DeVilbiss agreed, although DeVilbiss acknowledged that an ideal scenario would have allowed the public more time to look at the deal.”I wish it could be otherwise,” he said, but “I have read the memorandum of understanding, and [I think] it is appropriate for us to go forward today.”City Attorney John Worcester noted that the memorandum doesn’t preclude the participants from reselling the building with the same deed restrictions, and he said the Isis Group has represented themselves as having the community’s interest in saving the theater at heart.Klanderud and Menter both acknowledged the compromises involved for all of the parties but said they are necessary concessions to meet the common goal.”What it enables us to do is to save the Isis as a theater,” Menter said. “In terms of the city’s interest in this transaction, that’s the primary one that is met.”Abigail Eagye’s e-mail address is firstname.lastname@example.orgThe Aspen Times, Aspen, Colo.