Downtown Theater Asks For Millions To Help Reopen

The Downtown Novato Theater has asked at a city council meeting for $2 million to help reopen the long-closed theater.

Photo by Rem O'Donnelley

Tuesday night's city council meeting there was a presentation made by the Novato Theater where they asked the city for $2 million dollars.

During the presentation, Novato Theater Board president Dietrich Stroeh showed a video which detailed work that has been done and is being done to the theater. This included mentioning the Novato Fire Protection District which is helping to design the sprinkler system and the North Marin Water District which is considering installing the water pipeline.

The city council chambers were filled with supporters of the theater. The theater group stated the millions was needed to help reopen it. While the total cost is estimated to be $3.5 million, the group is counting on partnerships and public donations to raise an estimated $1.5 million.

The presentation stated that they expect to be able to create 25 new jobs and recurring state and local tax revenues of $125,000 with the theater reopening plus state and local tax revenues of $258,000. They also estimate an ongoing operation revenue at $1.6 million annually.

The ultimate vision of the theater will be to show live theater, music as well as broadcasting live opera performances. If all goes according to their plans in these early stages, construction will start in March.

Al Nymous January 29, 2014 at 02:43 PM
It take 25 people to run a one screen theater? Or three teenagers and twenty two shareholders?
Roger January 29, 2014 at 03:01 PM
I wonder much annual revenue Prado's proposed big 7-screen movie complex and parking garage on the old Pini store site would bring into the city. Or the proposed Friedman's hardware store near Trader Joe's.
D. Cook January 29, 2014 at 03:03 PM
Al. Slow down big fella. Perhaps the theater itself would generate only $125k in tax revenues.. What about the businesses downtown that would generate far more in taxable sales? The restaurants and bars would surely increase their revenues (see taxable sales) drastically should the theater open and Love to Dance, Broadway Bound Kids.. or any other number of organizers rented out the space for events. These people would be eating out far more often and shopping as well downtown. The Marin Civic Center is used by quite a few of these Novato based groups to put on their performances..and the few restaurants down there (see Gaspare's and Las Toscana) reap the rewards as does the city of San Rafael and their citizens from all the Novato "retail leakage" that the city council often bemoans. Look at Trek and Finnegan's. Both are great examples of "if you build it they will come". Before places like this, downtown was a ghost town. So Al, take it easy and put some thought in to what you are writing instead of shooting from the hip. Sort of like saying "25 people are needed to run a one screen theater". This is a multi use venue. It will have 2 screens/rooms. It will require booking and far more than running a single screen show. Get your facts straight and slow down.
Roger January 29, 2014 at 03:19 PM
D. Cook: I thought the estimated sales tax revenue of $125k was from the nearby businesses. The old theater is a non-profit outfit, and when you pay at the door it is a donation that is not taxed, correct?
Bob Ratto January 29, 2014 at 03:35 PM
This is not terribly challenging. They already have some funds in the bank, more pledged. Get a quasi cash secured loan with City guarantee.
Roger January 29, 2014 at 03:50 PM
Ratto: I thought the theater spokesperson last night said they wanted a grant, not a loan.
Al Nymous January 29, 2014 at 04:15 PM
Measure F should be revoked if the city intends on spending a dime on a project like that. What a spineless thing to do is ask 2mil for a theater renovation. Have company to invest their money, not our taxes. Cook, if you believe it will make a profit, invest your own 2mil. Novato is buried in loans, this is nuts!
Rem O'Donnelley January 29, 2014 at 04:24 PM
Additional financial numbers have been added to this story.
Bob Ratto January 29, 2014 at 04:27 PM
Roger Pretty high likelihood that they would want to use Measure F money for this, which would represent nearly 10% of the total expected to be collected over the five year period. A loan is what was originally going to be used to aid in the renovations, and the simple way to do ongoing debt service is to pledge drives/fundraisers, etc-this keeps skin in the game, and the bank can still be backstopped by a loan guarantee from the City..since they do have about $90 million in liquid assets (some of which is restricted)-but still more than enough to cover any loan like this. If theater people are doing a presentation to measure F tomorrow, bring me financials, ok?-in Excel, or just on a memory stick, and I can get with a couple of banks
Craig Belfor January 29, 2014 at 04:54 PM
How much do we pay for the bonds that built city hall, and how much in tax revenue do we get? Sometimes an infrastructure investment looks bad on paper but helps the city in the long run. If we can swallow a $15.5 million dollar city hall that holds 24% less staff than occupied the old building, then maybe we can swallow a $2 million dollars debt to finish our downtown and bring in business. Larkspur and San Rafael did it, but then again, they weren't saddled with a new city hall to pay first first.
Roger January 29, 2014 at 05:01 PM
Belfor: Did those two other cities really give their old theaters $2M grants? I didn't know that. Is that true?
Bob Ratto January 29, 2014 at 05:02 PM
Craig The bonds are going to run about $42MM over 30 years as i recall, so back of napkin that is $1.4MM per year-rent before was about $700k per year, so the City needs to swing the difference of about $700k per year every year for the next 30 years, which is a very tangible reason why they want to get new revenue sources. Measure F is increasingly being thought of as "free" money, but it isn't...nothing is.
Roger January 29, 2014 at 05:13 PM
Ratto: I heard last night that your Measure F committee wants a new $0.025 sales tax imposed after Measure F sunsets in 2016. I doubt voters will approve such a permanent new tax while the council wastes money-- eg, huge cheap loan to a Senior Housing complex on Diablo where most of the new residents are from outside Novato.
John Sammons January 29, 2014 at 05:14 PM
If the city is going to do anything it should get in gear to renovate the community center - kitchen, stage, meeting rooms etc. Oh by the way don't charge for use small organizations or clubs can't afford it. Downside PARKING< PARKING , PARKING
Mark Burnham January 29, 2014 at 05:24 PM
Consider this. In 2006 or 2007 the city of Novato were given the opportunity to sell the theater building to Tallan & Kashan. T&K had successfully renovated and opened the Egyptian Theater in LA and the Aero Theater on the Santa Monica promenade. They wanted to do the same for Novato!?!? Go figure.. but yes it was true. Jeanne Macleamy and one other voted YES to sell the property to this group. But Pat Eklund and two others voted NO. The result a 2-3 vote turning this well financed group away. If my memory serves me correctly T&K were willing to pay $200-300,000 for the theater and would have been opened by 2008. Instead the city let it sit.. and sit.. and then sold it for $50,000 to Bernice Baeza in 2010. The city council screwed up so royally in 2007 and we are left picking up the pieces almost 7 years later. The city council of Novato is wholly responsible for the theater remaining closed for years. They should be responsible for opening it again. Amazingly, they can come off looking like the hero by bringing the theater back to life and increasing tax revenues tremendously by doing so. Odds are they will find a way to screw this opportunity up once again.
Bob Ratto January 29, 2014 at 05:24 PM
Roger If I recall correctly 4 out of 7 members were ok with cutting the present tax in half...no one was recommending an additional tax on top of the existing, such as was done in San Rafael. A couple of members wanted it ended, others were in favor of continuing it. It all comes down to the level of service you want, whether you want employees to be paid at market rate, whether you want to maintain infrastructure. A lot of tough choices..and yes, the $1.5MM blown (waived fees, free loan) on Warner Creek for 9 residents, was absolutely wasteful and shameful.
Rem O'Donnelley January 29, 2014 at 05:27 PM
Tomorrow between 730-9 am, January 30 the city will have a Measure F Committee Oversight meeting http://novato.org/?page=636&recordid=7549&returnURL=%2findex.aspx
Sam January 29, 2014 at 05:37 PM
You people all have a screw loose if you think for one second We the voters will renew measure F. Our group will spend 50 k to tell the voters the truth. "STOP SPENDING"
Craig Belfor January 29, 2014 at 06:35 PM
Bob- you're telling me that the new city hall will cost $700,000 more per year than renting, (and our deficit was $700,000 per year, according to the post I read where the city wanted to raise this much). Ever hear of a sale/lease back? Companies do this to get working capital to survive, and let the new owner get the appreciation and tax breaks. It's not my cup of tea, but it's a proven cure for a company that says they need to go forward now at the cost of some future holding's value. Our city did the opposite, and that's why we have money problems now. Still, based on your figures, if $1.4 mil carries $15.5 mil, then $15,000 per month carries $2 mil. If the theater can pay $15,000 a month rent to the city, we should go pass that bond, and the taxpayer would not be saddled with that debt. I think the theater can pull in more than that, and the nearby restaurants will benefit. We should look at this option.
Roger January 29, 2014 at 06:36 PM
Sam: Is Steve Jordan a member of your anti-tax group?
Craig Belfor January 29, 2014 at 06:45 PM
Veola pays Petaluma one million dollars a year for the use of their streets, but pays Novato nothing. When asked, the sanitary district said that we have the lowest garbage rates in the county because of this. However, someone posted that some number cruncher came up with only $2.88 per month per household to charge Veola, and pass the cost on to Novato residents. So the question is this- Option 1- we charge every Novato resident $2.88 per month more for 2 years and pay off the theater and let the city become part of the revenue distribution, or #2-float the bond, pay off the theater rent (bond cost), and keep the rest for the deficit. However you call it, I'm more than willing to spend $2.88 per month to finish the downtown.
Desperation January 29, 2014 at 08:13 PM
Finish the Downtown ! Are you kidding Where is the parking as the new 999 Grant ave has none and nobody will rent it because of that problem. Your city council took the trees out from behind the police department to put in three new spots and now the city is paying rent to 7250 Redwood blvd for employee parking Does that tell you we have a problem ? City employees are also parking on Sherman with no meter maid patrol. Ever wonder why we are called the stupid voters
Paula Neese January 30, 2014 at 09:43 AM
I couldn't agree with you more Al Nymous! Right on! Serenity Now!
Roger January 30, 2014 at 12:03 PM
Ratto: MacLeamy voiced strong support for a pension reform bill pending in the legislature. Would reform there help Novato's structural budget shortfall? I know many cities have gone bankrupt due to costly pensions, and then the old people get their retirement checks cut to pennies on the dollar. Reform now seems better for those union workers than what happened via bankruptcy to civil servants in Detroit.
Tina McMillan January 30, 2014 at 01:58 PM
How can the city justify giving the theater money, even if it is a good cause, when they can't pay for basic services?
Sam January 30, 2014 at 02:04 PM
Tina , Its simple as people like you vote the wrong people into office and then you think you can speak for them . Ever think you are part of the problem with the postings
Tina McMillan January 30, 2014 at 02:49 PM
Sam: ========================================== You assume you know who I vote for as well as assuming that comments to Patch have anything to do with what the council does with money from Measure F or the General Fund. ========================================== Patch is a forum where people get to discuss everything from local government to gardening. Free speech and diverse views are the basis for journalism in America. If not Patch then the IJ and the Advance are both local news sources.
Bob Ratto January 30, 2014 at 07:09 PM
Roger The pension wave is a difficult one to keep on top of...in talking with Jeanne, another challenge is cities like San Rafael (which have huge unfunded pension liabilities) will offer compensation levels to employees that are higher than what we would ordinarily offer (they have the $$ for now, because they don't fund their pensions)-results in wages driven up. As I understand most of the pension reform being proposed by Chuck Reed-it is to set up a second tier with lower pensions offered to new employees, to slow the growth in liabilities down. Shortfalls in pension earnings from CalPers come directly from city budgets...your taxes; and they do not have a terribly stellar investment record.
Roger January 30, 2014 at 07:41 PM
Ratto: Thanks. The private company I work for had a tiered pension system imposed 7 years ago. The pilots union has a tiered program for old vs new pilots. Seems only fair that the trend hit the civil servants some year soon.
Bob Ratto January 30, 2014 at 07:50 PM
Roger Yes, well I wish I had a pension...my investment adviser verbally abuses me when I do not make monthly contributions, which come right out of my business.... thing with pensions is, at some point you do run out of others people money.


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