City to forgive $2.55M debt for Beacon Cinema
PITTSFIELD — The city will forgive the Beacon Cinema's debt after a City Council vote Tuesday.
The proposal from Mayor Linda Tyer will forgive $2.55 million in loans awarded to the Beacon's redevelopment project. Tyer and councilors behind the proposal argued that, with the building in foreclosure, it's unlikely that the city will see the money repaid either way. In debt forgiveness, they see an opportunity to usher in new ownership and avoid seeing the lights go out on what, for the past decade, stood as a symbol of the downtown revitalization effort.
Others argued that it's time for the city to cut its losses when it comes to the Beacon and stick to its guns in hopes for repayment. The city has similarly granted money from its Economic Development Fund — it was built up with cleanup money from General Electric Co. — to the Colonial Theatre, Barrington Stage, Covanta and LTI Smart Glass — without expecting repayment.
The theater opened in 2009, with help from a series of grants. Banks moved to foreclose on the property in September. A Michigan-based small-theater chain, Phoenix Theatres, has agreed to buy the property and assets for $644,000 — if the city forgives the debt.
Some argue that the cinema's owner, Richard Stanley, has enjoyed excessive support from the public sector, but officials say the cinema is no freeloader. Under a tax increment financing incentive, which phases in redevelopment investments, the cinema is paying $45,098 in real estate taxes and $18,354 for personal property during this fiscal year alone. City money for the cinema came in the form of $1.5 million from the Economic Development Fund.
Two additional grants were funneled through the city in order to support the project: $50,000 in Community Development Block Grant money, and a $1 million grant from the state. Under the proposal, state and federal grants used for the project are to be immediately forgiven.
The $1.5 million awarded through the city's Economic Development Fund will be forgiven in stages over the next 10 years, under the condition that the cinema remain open. If the Beacon closed, the money would be returned to the Economic Development Fund, where officials could use it for economic development incentives.According to Council Rule 38, councilors are to consider disbursements from the city's Economic Development Fund based on potential job creation, capacity to generate further investments and overall public benefit.
"Everyone's kind of confused about exactly what's happening here," said Ward 5 Councilor Donna Todd Rivers.Councilor At Large Melissa Mazzeo said she wanted to take more time on the decision, and hoped for more out of the situation — "a goodwill gesture" from the buyers to remove "the sour taste" for the public. She suggested forgiving some of the loan, but not all of it.
"We need to make this more palatable," she said.Jonathan Butler, president of 1Berkshire, called the cinema a "critical anchor property" in the city's downtown.
Nick Russo, who lives in a newly renovated apartment across from the Beacon, said he likely wouldn't have moved back to Pittsfield if that section of North Street were still blighted and without the Beacon. So, to forgo the money, he said, "is not a loss."
Jesse Cook-Dubin, president of Downtown Pittsfield Inc., gestured to downtown business owners packing the house to support a future that includes the Beacon.Cheryl Mirer, executive director of Downtown Pittsfield Inc., said the cinema acts as "the glue" holding downtown together.
To that point, an owner of The Marketplace Cafe said it was the Beacon that inspired the company to open a second cafe in downtown Pittsfield.Steven Valenti has been in business on North Street since 1965, and he said his customers are spending more in Pittsfield now that there's the Beacon, Barrington Stage and the Colonial Theatre.
"I fear that without the Beacon we will fall back in time," Mirer said.
Amanda Drane can be contacted at email@example.com, @amandadrane on Twitter, and 413-496-6296.
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