Agree­ment signed to re­open movie the­ater

Kent County News - - FRONT PAGE - By TR­ISH MCGEE pm­cgee@thekent­coun­tynews.com

CH­ESTER­TOWN — A deal has been struck for the re­turn of a first-rate, first-run movie the­ater to the Wash­ing­ton Square shop­ping cen­ter. By a 2-1 vote Tues­day night, the Kent County Com­mis­sion­ers ap­proved an al­lo­ca­tion of $75,000 from the Kent County Re­volv­ing Loan Fund to Ch­e­sa­peake Movies Inc. The money will bridge the gap in fund­ing be­tween Ch­e­sa­peake Movies and prop­erty owner Sil­i­cato De­vel­op­ment, which had been ne­go­ti­at­ing since last fall to fill the empty space cre­ated when Ch­ester 5 The­atres abruptly closed in June. The plan is to have the re­fur­bished mul­ti­plex open by the end of June or early July — “60 days, hope­fully less,” Michael Klein, pres­i­dent of Ch­e­sa­peake Movies, said in a tele­phone in­ter­view Tues­day night af­ter the com­mis­sion­ers signed off on the agree­ment. “We’ve been an­tic­i­pat­ing the vote, and we ac­tu­ally had the com­pany that is gong to in­stall the pro­jec­tion and sound equip­ment come to the the­ater to­day,” Klein said. He said he also has been in con­tact with Ch­ester­town Zon­ing Ad­min­is­tra­tor Kees de Mooy about sig­nage for the the­ater. Ch­e­sa­peake Movies Inc. in­tends to in­vest about $500,000 in a com­plete over­haul of the the­ater, which had lit­tle to no up­grades in its 21-year run as Ch­ester 5 The­atres.

The county’s loan is to Ch­e­sa­peake Movies — the prin­ci­pals are Klein, Robert Wein­holt and Ira Miller — with the Town of Ch­ester­town as the co-guar­an­tor, ac­cord­ing to the guar­anty agree­ment signed by Town Man­ager Bill Inger­soll and Klein. The town has agreed to re­pay the $75,000 loan through the amuse­ment tax rev­enue gen­er­ated by gross ticket and con­ces­sion sales. In a separate agree­ment signed be­tween the prin­ci­pals and Ch­ester­town Mayor Chris Cerino, Ch­e­sa­peake Movies pledged that if af­ter three years there re­mains an out­stand­ing bal­ance on the orig­i­nal ad­vance of $75,000, the bal­ance would be paid in full within 30 days of the ex­pi­ra­tion of the third year. As an added pro­tec­tion to the town, if Ch­e­sa­peake Movies shuts down be­fore the full re­pay­ment of the ad­vance, the to­tal re­main­ing bal­ance shall be payable to the town within 30 days of the ces­sa­tion of op­er­a­tions. Should Ch­e­sa­peake Movies de­fault on its re­pay­ment obli­ga­tion, the town is en­ti­tled to own­er­ship of the the­ater seats, the con­ces­sion stand, fix­tures and any equip­ment “to sat­isfy that obli­ga­tion, with such pos­ses­sion to be con­sid­ered full sat­is­fac­tion of the en­tire amount due,” ac­cord­ing to the agree­ment that Cerino, Klein, Miller and Wein­holt signed April 18. Jamie Wil­liams, the county’s eco­nomic de­vel­op­ment co­or­di­na­tor, told the com­mis­sion­ers Tues­day night that the re­open­ing of the movie the­ater “has to be the most talked about thing.” She said the Eastern Shore En­trepreneur­ship Cen­ter is ad­min­is­ter­ing the loan. What­ever con­cerns Cerino had about guar­an­tee­ing re­pay­ment of the loan to the county — Cerino could not com­mit to that when he re­quested the com­mis­sion­ers’ help on April 10 — had been worked out, Wil­liams said when quizzed by the com­mis­sion­ers. Pres­i­dent Wil­liam Pick­rum voted against award­ing the loan, say­ing he had reser­va­tions about a plan that tied re­pay­ment to the en­ter­tain­ment tax. “This is tax­payer money and tax­pay­ers de­serve some con­fi­dence that it will be paid back,” Pick­rum said dur­ing Tues­day night’s meet­ing. This is only the third loan the county has made through its re­volv­ing loan fund, Wil­liams said in an in­ter­view last week. She ex­plained that the fund was cre­ated in the Fis­cal Year 2016 bud­get with $200,000 in seed money. It’s a part­ner­ship with Mike Thielke, ex­ec­u­tive di­rec­tor of the ESEC, who ad­min­is­ters the fund. Thielke has the ca­pa­bil­ity to lever­age ad­di­tional funds through the Depart­ment of Hous­ing and Com­mu­nity De­vel­op­ment, bring­ing the to­tal to as much as $400,000 avail­able for Kent County, Wil­liams said. The in­ter­est is 2 per­cent on the loan to Ch­e­sa­peake Movies, which will pay for the ser­vic­ing fees charged by the ESEC. “We’re not mak­ing any money on it,” Wil­liams said. She de­scribed the loan as “a per­fect eco­nomic de­vel­op­ment project that’s also a com­mu­nity de­vel­op­ment project.” “If we don’t take this op­por­tu­nity to work with both of these en­ti­ties — the prop­erty owner and the busi­ness owner — I don’t feel that Kent County will have a shot at a movie the­ater,” Wil­liams said in an in­ter­view in her of­fice April 19. Work to get the movie the­ater deal back on track be­gan in earnest about a month ago when Klein, Miller and Wein­holt at­tended a Ch­ester­town coun­cil meet­ing ask­ing for fi­nan­cial help. They needed an ad­vance of $75,000 to bridge the fund­ing gap af­ter ne­go­ti­a­tions with Mills­boro, Del.-based Sil­i­cato De­vel­op­ment had reached an im­passe. The the­ater own­er­ship would pay 4 per­cent of its rev­enue through the amuse­ment tax an­nu­ally, with a pro­jec­tion that the town would re­coup its loan in five to seven years. Per the terms of the newly inked deal, the fi­nal pay­ment of the bal­ance of prin­ci­pal and in­ter­est is due Oc­to­ber 2021. At the March 19 coun­cil meet­ing, Mayor Cerino said he was con­cerned about set­ting a prece­dent in fronting money to a busi­ness or en­tre­pre­neur in ne­go­ti­a­tions with a land­lord and that he needed as­sur­ances that the tax­pay­ers’ money would be safe­guarded. Af­ter dis­cus­sion, the vote was 4-0 to pro­ceed as a fa­cil­i­ta­tor in the ne­go­ti­a­tions. Coun­cil­woman Linda Kuiper was ab­sent. Town Man­ager Bill Inger­soll was au­tho­rized to look af­ter the town’s in­ter­ests as Sil­i­cato De­vel­op­ment and Ch­e­sa­peake Movies worked to­ward an agree­ment. In Tues­day night’s tele­phone in­ter­view, Klein recom­mit­ted to a com­plete over­haul of the 14,400-square-foot space that an­chors the shop­ping cen­ter at the north­ern gate­way to town — what is go­ing to be called Ch­e­sa­peake Movies. There will be raised plat­form seat­ing with high-back rock­ers, new drapes and car­pet­ing, wider screens, and state-of-the-art pro­jec­tion and sound sys­tems. Ev­ery­thing will be new and mod­ern­ized, in­clud­ing the lobby, the con­ces­sion stand and re­strooms. Some of the prep work al­ready has been done; the old seats and most of the drapes were taken down in Septem­ber af­ter ne­go­ti­a­tions had be­gun be­tween Ch­e­sa­peake Movies and Sil­i­cato. They ex­pect to hire 12 to 15 peo­ple, in­clud­ing a the­ater man­ager. Any­one who is in­ter­ested in a job should con­tact Klein at chesa­peake­movies @gmail­com. The plan in­cludes mak­ing this a com­mu­nity the­ater, in­volv­ing Wash­ing­ton Col­lege, the lo­cal film so­ci­ety and the broad­cast­ing pro­gram at Kent County High School. The the­ater could be rented for fundraisers and birth­day par­ties. They are ex­plor­ing the idea of sell­ing beer and wine and part­ner­ing with area restau­rants to pro­vide a din­ner the­ater op­tion or joint mar­ket­ing pro­mo­tions such as din­ner and a movie.

The space most re­cently oc­cu­pied by Ch­ester 5 The­atres in the Wash­ing­ton Square shop­ping cen­ter is ex­pected to re-open this sum­mer as Ch­e­sa­peake Movies.

PHOTO BY TR­ISH MCGEE

Michael Klein, pres­i­dent of Ch­e­sa­peake Movies Inc., rolls out the plan for a thor­oughly ren­o­vated and mod­ern­ized the­ater to the Ch­ester­town mayor and coun­cil mem­bers March 19.

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