ROANOKE RAPIDS — The Roanoke Rapids City Council voted unanimously to approve to accept the deed of the Roanoke Rapids Theatre instead of foreclosure during a Tuesday night meeting.
The decision came after the owner, G&T Holdings LLC, was overdue on its balloon payment back on June 21, which City Attorney Geoffrey Davis said was unlikely they would be able to fulfill.
According to a promissory note, G&T Holdings took ownership in 2018 for a loan amount of $2.7 million. The document underwent four modifications since, with the last one on Jan. 21, 2021.
During Tuesday’s meeting, Davis reiterated that the city had not owned the theater in recent years and that it does not look like the company will be making any payments nor requesting any extensions to move the balloon payment. He then proposed three options to the council, which option one would be to extend the loan again for them. However, Davis said it is unlikely they will pay the balloon payment given that many entertainment venues took a financial hit during the COVID-19 pandemic.
“And at this point, it looks unlikely that they will be able to do that in any timeframe that I think would be reasonable to present to city council,” he said. “So I think that what we’ve done in the past when we’ve been in this situation or close to this situation, I don’t think that’s a very good option — is option one.”
Davis said option two would be the city forecloses on the facility, which advised comes with considerable costs.
“We’d have a building that would be sitting there aging,” he said. “G&T could say, ‘Well, we’re not going to pay the utilities on it, we’re not going to pay the insurance on it, we’re just gonna let it sit there,’ and it could be a problem. So I don’t think option two is really the best option if we don’t have to take it.”
Davis proposed option three, which would be the city accepts the property back in lieu of foreclosure. He explained that he and G&T’s attorney had discussed the option over the past couple of weeks. Davis said G&T does not have any other assets and that if the council agreed to the option, then the property could come under the city’s control by the end of the week.
“I’ll just say if once this is back in our hands, at the end of the week, if we follow through on this, at that point the next meeting — the August meeting comes up, the city could, or the council could decide to entertain bids,” he said. “We could essentially put it back on the market as early as the August meeting.”
The council approved the third option to take the property back. Councilwoman Suetta S. Scarbrough was not present.
A budget amendment Ordinance No. 2022.13 was proposed for the theater expenses.
The budget proposal listed services for phone lines, internet, elevator, fire monitoring, electricity, security alarm, music/performance licensing, annual fire pump inspection, building maintenance performance and to replace a defective Lake Mes-Quad Audio Processor that is listed as a “critical.” Options given were three months for $51,420, six months for $98,640 or 12 months for $193,080.
Councilman Wayne Smith questioned why there would be a need for phones and other services if the building would not be occupied.
Public Works Director Larry Chalker explained that in discussion with the city attorney through email that the city needed to be prepared to make the building available for rental in order to make it possible for the recovery of monies. Chalker gave an example that Dominion stages its bucket trucks in the area during storms, and one day with the electric company renting the building would benefit the city.
Davis said the funds in the budget proposal do not have to be spent but to bring a reasonable number to the council and have something in place rather than wait a month later.
City Manager Kelly Traynham said the money proposed would come from the general fund and recommended the three months of $51,420.
The council approved the budget under Traynham’s recommendation.