More Than $60K in Past Donations for Theater Went to Other Groups, Records Show

Work has started on the interior of the Novato Theater, with crews removing walls, rotten wood and other hazardous materials from the 70-year old venue.

The nonprofit describes the improvements as a “soft demolition” and says it will give architects a chance to get accurate measurements for the theater they hope will eventually screen independent films and offer performance space for local theater, music and dance groups.

“We want to let people know that this is happening,” said Deborah Rawson, a spokeswoman. “We want them to come into the theater and take a look for themselves.”

On August 1, the theater will start selling vintage seats for $20 each as a way to get rid of the old furniture and raise needed funds. The group already has raised an estimated $650,000, but needs twice as much before they can start construction. The overall cost of completing the reconstruction is estimated at around $3.5 million.

As work gets under way, some residents are urging more transparency in the process, which has had many starts and stops over the past decade.

"There's a bad taste in some people's mouth who donated,” said Carlos Castillo, who owns The Loveable Rogue bookstore on Grant Avenue. “People want to know what happened to the money that's already been raised." 

Prior to the formation of the nonprofit Novato Theater in 2010, another group calling itself the North Bay Performing Arts Theater was fundraising to revive the former downtown attraction. But when it was not successful in raising the needed money, it disbanded in 2005 and donated their accumulated funds—$45,000 in all—to the San Marin High School Music Boosters program. 

In 2002 and 2003, another group calling itself the Novato Theater Restoration Committee had also tried to fundraise for the neglected theater, but it too eventually fell apart. The group ended up donating $17,000--money many believed would go to reopen the theater-- to other community groups which had nothing to do with the arts.

These included the Hospice of Marin and the Children’s Hospital in Oakland, who received $2,500 each, and the Downtown Business Association, which got nearly $5,000, according to IRS records. Two local rotary groups—Ignacio Rotary and Novato Rotary—received nearly $4,000 each for their endowment.

Why did theater backers repeatedly donate money to other groups instead of toward its intended purpose?

The answer has to do with how the nonprofits’ articles of incorporation were written, according to Jay Strauss, a Novato attorney and Novato Theater board member.

“Federal law says that on dissolution funds have to be distributed to charitable purposes and returning money to donors does not satisfy this requirement,” said Strauss, adding that he has only been involved with Novato Theater since this year and can’t speak to decisions made by past volunteers.

“Money could have been put into an escrow account. But if that happened, the group would not be able to offer tax write off until the condition was satisfied (total $3.5 million in donations raised.)” 

Repeated calls to longtime volunteer and current board member June Haugen were not returned. Dietrich Stroeh, another board member, said he was not familiar with nonprofit law, but said the public had nothing to worry about.

"The goal is to make it happen and we will," he said.

Rawson, the theater spokeswoman, said the group is serious about putting donors' money toward the intended goal.

“Safeguarding donations is of paramount importance to us,” she said.

But Dan Ochs, a Novato resident who briefly volunteered for the theater before becoming disillusioned with the project, said the group needs to admit what happened in the past and be clear that money raised this time around will be spent on what was intended.

"They were able to get money from people in the first place by telling them about what was going on," Ochs said. "That hasn't happened, they won't even put their meeting minutes in the windows. They don't want people to know."

Have you donated to Novato Theater’s rebuilding efforts? Do you believe the theater will ever be revived? Share your thoughts in the comments below.