Council ratifies emergency tax payment to protect city lien on closed downtown theater

The Streator City Council ratified an emergency payment of real-estate taxes intended to protect the city's security interest in the downtown theater redevelopment project.

City staff explained that the city previously provided redevelopment support that included a $340,000 direct subsidy and a $150,000 revolving loan. "There was an outright $340,000 payment that was made to subsidize certain redevelopment costs of the building itself as well as $150,000 loan... but in any case there's about $96,000 that is currently owed under that loan," a city official told council. Staff said refinancing and the bank's failure to make a timely tax payment put the city's lien at risk of being vacated by a tax-sale purchaser, so an emergency tax payment was made to protect the city's interest.

Staff also told the council the operating company, Pupil City LLC, is in bankruptcy and related proceedings will delay enforcement; a bankruptcy hearing had been postponed. The staff presentation said holding the city's position gives it options: either eventual repayment including tax payment made on the city's behalf, or the city could end up with the property and pursue reopening the theater with a new operator.

Councilmember Shire moved and Councilmember Reid seconded the motion to ratify the payment; the roll call returned unanimous 'Aye' votes and the resolution carried.

Staff said the city will await the outcome of the pending bankruptcy matter and will return with next steps consistent with legal advice and the council's direction.