GOSHEN — Ownership of Goshen’s historic downtown theater could soon be changing hands.
Goshen Redevelopment Commission members Tuesday voted in favor of providing a $150,000 loan to the recently formed non-profit organization Goshen Theater Inc., funding which the group plans to use to purchase the historic downtown theater.
“The Goshen Theater project has been going on since 2010, and it seems like it’s just now getting rolling,” said Mark Brinson, director of community development for the city. “It’s a big project.”
According to Brinson, the Redevelopment Commission back in 2010 approved a matching grant to the downtown advocacy group Downtown Goshen Inc. for the purpose of completing a study of the feasibility of renovating the currently shuttered Goshen Theater into a center for arts and entertainment in the downtown.
That study, he said, confirmed that the theater could indeed be successful, provided that a non-profit organization could be established to operate the theater and conduct a major fundraising campaign. According to the results of the study, a full renovation project for the theater would likely fall somewhere in the range of $9.5 million, with the annual cost of its operation falling at around $200,000 a year.
Following completion of the feasibility study, Goshen Theater Inc. was reportedly formed with the mission of acquiring, renovating and eventually operating the Goshen Theater.
Along those lines, Brinson said the group recently commissioned a feasibility study to see if it would be possible to raise all of the necessary funding for the renovation project through either private sources or grants. The results of that study are expected in July this year.
In the meantime, Brinson noted that the current owner of the theater, Epic Ministries, is in the market to sell the theater immediately and has expressed a strong desire to sell the theater to GTI so that it can be maintained as a community venue for the performing arts.
As a result of recent talks between the two organizations, Brinson said GTI has negotiated a purchase agreement with Epic Ministries to purchase the building that will require $150,000 at closing, with an additional $50,000 to be funded out of proceeds from the capital campaign.
That, he said, is where the loan request by GTI comes in.
As GTI does not currently have the necessary capital to purchase the building on its own, Brinson noted that a loan from the Redevelopment Commission would allow the group to make good on its purchase agreement and thus keep the building from being sold to an organization that perhaps does not have the best interests of the historic theater in mind.
The commission agreed, and the request for the $150,000 loan was approved unanimously. A breakdown of the particulars of the loan agreement is as follows:
• Loan amount: $150,000
• Interest rate: 3 percent
• Amortization schedule: 15 years
• Deferred payments: first two years
• Balloon payment: after six years
With the purchase agreement between GTI and Epic Ministries now in its final form, Brinson said final approval by both organizations is expected to occur within the next couple of weeks.
However, Brinson noted that under the terms of the agreement, closing is contingent upon completion of a phase one environmental assessment, the results of which should be available by the end of March.
Once those are in and deemed satisfactory, Brinson said closing is expected to occur shortly thereafter.
“It just seems like a win-win,” said Commission Vice-President Vince Turner of the request. “This is a downtown landmark. It’s a really solid group of proven people who are putting this together. It’s an opportunity for us, even with a nominal interest rate, to get more of a return on our current funds than we are now. It just doesn’t seem to have a downside.”
With the purchase of the Goshen Theater by GTI now virtually assured, Brinson noted that GTI’s current plans for the building involve re-opening the theater on an interim basis while the fundraising study and subsequent capital campaign takes place.
According to Brinson, GTI is now in the process of securing grants from various sources to fund the cost of operations over the next two years. Based on the interim operations budget, Brinson said the goal is to raise $200,000 per year in grants, donations and in-kind services.
Along those lines, Brinson noted that the Goshen City Council earlier this month agreed to provide $50,000 toward the theater’s operating budget for 2014 — a funding commitment which GTI hopes will serve as a catalyst when it comes to securing additional funding from other local community organizations and granting sources down the line.