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Councilman Ernest Bobbitt made a motion for the city to move forward with the lease-purchase agreement so council could begin studying the lengthy proposal. Carl Ferebee seconded the motion and Councilman Ed Liverman voted to approve it, along with Ferebee and Bobbitt.
The deal requires Gatling to put $625,000 in the form of a bid deposit up front and make monthly payments. If the payments are made on time over the life of the contract, the sale price could be reduced to $11.5 million, according to the contract.
Hugh Bazemore, chairman of the Advisory Committee, noted the committee recommended a North Carolina contract attorney study all the proposals submitted.
The committee also recommends the identities of the Illinois limited liability corporation set up by Gatling to buy the theater be disclosed. “We are also encouraging all key stockholders of the limited liability corporation to purchase and maintain life insurance protection sufficient to pay the balance due on the lease-purchase agreement, naming the City of Roanoke Rapids as beneficiary. The City of Roanoke Rapids should obtain credit reports on all other major stockholders of the limited liability corporation.”
The proposed contract is prepared with the understanding the theater be used for what it was originally intended, an entertainment venue to help spur development in the Carolina Crossroads Music & Entertainment District, Bazemore told Council.
Following the meeting Bazemore said while it was a difficult decision, members of the Advisory Committee said of the 21 proposals they studied, the Gatling proposal was the best. “This is really the only one to have a lease-purchase and offer significant revenues to the city,” he said. “This is something that goes a long way to off-set the tax responsibility.”
Mayor Drewery Beale said following the meeting he supports the Gatling agreement. “The main thing I like about it is he is putting money into the project.”
Beale said a trip to Chicago in August convinced him the Gatling proposal is the best for the city. “After going to Chicago, I am confident he can do the same thing here.”
City Manager Phyllis Lee said the city sees the Gatling proposal “as a second chance for Carolina Crossroads to become a reality.”
She said this morning, “In order for Carolina Crossroads to fully develop in the way that it was intended, there has to be an anchor to draw other development and the theater was always intended to be that anchor.”
Initial talks with Gatling indicate he wants to bring a variety of acts to the theater, including country, blues jazz, pop, soul and gospel.
Lee said Gatling’s payments, if the proposal is approved, would be roughly two-thirds the amount of the city’s debt on the theater. The first year of full payments will be $1,246,000, which is almost 68 percent of the city’s debt service payment.
That means taxpayers would fund the balance, which is $595,000. “Our current budget is funding $1.3 million in payments,” Lee said. “The cost of the theater itself represents 62 percent of the $21.5 million in bond indebtedness. The payment that Mr. Gatling will be paying is almost 68 percent of our debt so we will be taking loss? No. Are we making a profit? No. Have we made a fair and equitable deal? I think so.”
If he chooses to walk away, Gatling loses all the money he put in theater. “He walks away from any equity he has in it and the city has a right if he owes us any money to seek legal remedy and if he is at fault he is responsible for paying the back payments and city’s cost for recovering the money,” Lee said.
Hubert Pope, a member of the committee who knows Gatling, said he believed the Chicago businessman and Northampton County native was the right person to run the venue. “If anyone can put their heart into a project and integrity it is (Gatling),” he said following the meeting. “He will put his heart and mind (into the project) and go above and beyond.”
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