Mayor Bill Judge’s announcement last week that Neighborhood Development Services offered to buy the recently closed Lake Cinemas 8 has left the community abuzz with questions and concerns regarding its fast-paced transaction.
Although nothing has been approved at this time, the city and NDS have worked out a financial plan that would involve a loan from the Barberton Community Development Corporation (BCDC) and Barberton Community Foundation, which could allow the theater to reopen in early April.
The theater closed Jan. 15 following failed negotiations between previous tenant Phil Canfora and the city regarding a new lease or sale. Once the theater was cleaned out, Judge took NDS through the building again and decided to get estimates on repairs and installations.
“Every business venture is a little different,” Judge said regarding the city’s decision to have a nonprofit buy the theater. “The movie industry now with Netflix and the Internet is a little different than any other business. We’re being creative this way. It’s nothing new, but for this area it is new.”
NDS Executive Director Dave Vaughan said previously that the group would pay for the building through a $545,000 loan from BCDC, which would be paid off in a five-year mortgage on the property. BCDC is a tax-exempt, nonpolitical organization that works to bring businesses and jobs to the city. NDS is a community development corporation in Barberton that works to revitalize neighborhoods and the city’s center.
If everything works as the city has planned, the source of all this money would come from the Barberton Community Foundation, a public charity which partners with community stakeholders, donors and charities to help build the community.
BCDC Executive Director Scott Wagner said the Foundation developed a fund years ago for economic development projects, which is available for BCDC to make loans.
This is the first loan the BCDC has considered giving to a nonprofit, so there are concerns about how fast it’s moving and questions that need answered first, Wagner said.
“With any financing project, we always have a security concern,” he said. “We want to be secured as much as possible. We would have a first mortgage on the theater and it’s a pretty specialized use so if anything happened it wouldn’t be real easy to sell that to recoup our losses.”
If BCDC approves the loan, it is then up to the Barberton Community Foundation to look at the offer and decide if it’s something worth approving. However, Foundation Executive Director Larry Lallo said it is too soon to tell what it will do.
“We would have to look at the risks ourselves based on the information [BCDC] provides,” he said. “Usually we’re going to affirm what they bring to us, but not always. We have investment standards we want to make sure are complied with.”
Lallo emphasized that no matter how fast the sale moves, he needs to make sure that the standards are not compromised.
“I understand that things need to move fast and I can accept that, but the standards have to be met for matters to be approved,” he said.
If BCDC and the Barberton Community Foundation approve the loan, NDS can then buy and own the building. Great Oaks Cinema, which operates a year-round cinema in Wadsworth, would operate the theater.
Vaughan said the NDS will also spend about $250,000 of its own money to install digital equipment, two 3-D screens and renovate the entryway.
The offer will be discussed in the rules committee meeting at 6 p.m. Tuesday in the Municipal Building, and City Council members will vote on the sale at their Feb. 25 meeting. No decision by council can be made until both the BCDC and the Barberton Community Foundation approve the loan.