Roanoke Rapids to sell troubled theater
Posted November 15, 2011 5:59 p.m. EST
Updated November 16, 2011 7:28 a.m. EST
Roanoke Rapids, N.C. — Roanoke Rapids city leaders plan to sell the troubled theater that bears the city's name to a Chicago businessman for an undisclosed cash offer.
In an emergency meeting Tuesday, the City Council authorized the city attorney to enter into a contract to sell the Roanoke Rapids Theatre to Lafayette Gatling, who several years ago entered into a $12.5 million lease-purchase agreement with the city.
That deal was supposed to help Roanoke Rapids erase debt incurred from the project, but the City Council terminated it last year when Gatling failed to pay $530,000 in back rent.
City attorney Gilbert Chichester said Gatling's new deal with the city requires full payment of the purchase price in cash before closing.
Roanoke Rapid's interim city manager, Ed Wyatt, said Tuesday that he expects the new deal to be negotiated within days. Once the City Council approves the contract, there is a 10-day window for other bidders to beat Gatling's offer.
In 2005, the city borrowed $21.5 million to build the 1,500-seat entertainment complex, which was expected to spur growth along Interstate 95 and to generate enough revenue to pay off the loan.
At the time, it was managed by and named after Randy Parton, the brother of country singer Dolly Parton. The city cut ties with Randy Patron in 2008, after poor ticket sales and management issues kept the theater in the red.
At one point, local leaders increased the local tax rate by 5 cents to pay the theater's bills.
In a statement Tuesday, Mayor Emery Doughtie said that Roanoke Rapids would be taking a loss on the theater but that the city still owes $19 million for it. By selling it, he said, the city can refinance the remaining debt to make it more manageable.
"The theater currently costs taxpayers $100,000 a year just in operating expenses," Doughtie said.
He noted that the sale doesn't eliminate the possibility of raising local taxes again.
"The city, at least, will be able to concentrate on more of the essential services that our citizens deserve and respect," Doughtie said.