The Centralia City Council is not ready to grant a funding request for continued work on the Fox Theatre.
The council plans to revisit the request from the Fox Theatre Board during its budget process in early October.
The council voted to table a decision on the Fox Theatre during its Tuesday evening business meeting after more than an hour of discussion and debate on the theatre’s future. Before the temporary conclusion, Councilor Tucker Voetberg made a motion to provide the requested $1.5 million in funding through city bonds. The council was unwilling to commit bond funding as it stares down what is expected to be a difficult budget season. The motion from Voetberg did not receive a second and died without a vote.
The newest Centralia City Council member, Jan Nontell, made the motion to table the consideration of the theatre funding until the council has more answers to financial and legal questions. The Fox Theatre will once again appear on the council’s business agenda for its Oct. 13 meeting.
“I think everybody wants to see the Fox Theatre open,” Nontell said. “I know it's been my dream for the last 20 years. It's definitely an anchor to our downtown. It will be incredible when it's open, but we still have legal questions that haven't been answered. We have fiscal questions that we can’t answer right now.”
Nontell pitched the delay from the start, hoping that the council could wait for more information on the city’s 2027 budget. City staff was unable, in the moment, to provide exact financial numbers for next year's budget as the process has just begun.
According to City Finance Director Bret Brodersen, city staff will present preliminary budget numbers during the second council meeting in September, prompting the delay of consideration to the mid-October meeting.
Nontell, Deputy Mayor Kelly Smith Johnston and others also had legal questions concerning the theatre, which were raised previously.
The city remains uncertain if it would be required to pay back previous state grant funding if it chose to not continue work on the theatre or even sell it. The grant funds come with stipulations that the facility remain a theatre or performing arts center for 10 years.
The Fox Theatre Board and Voetberg have warned that the city would likely be on the hook for the grant funds if the project stalls and the board is dissolved. Other councilors and city staff, however, have questioned that conclusion, pointing out that the city was not a direct party to the grants and the grant funds were given to the Fox Theatre Board, not the city.
The city is awaiting an official legal opinion but is currently without a city attorney after its former in-house counsel, Kyle Manley, left the job earlier this year.
Before the eventual conclusion to the discussion, the council discussed where the funding would come from.
As previously stated by city staff and touched on again Tuesday evening, the city expects that it would have to use all of the available lodging hotel-motel tax revenue and some general fund monies to cover the $150,000 yearly debt payments for a $1.5 million bond. Hotel-motel tax revenue is often referred to as Lodging Tax Advisory Committee or LTAC funds.
According to Brodersen, the city is already paying off other debts using LTAC funds and may be able to pay the Fox Theatre debt service using LTAC funds once those debts are paid off around the year 2030.
“Until some of the other debt that the LTAC fund is paying off is extinguished, the general fund would be the only other place that we could have to pay for that debt service,” Brodersen said.
Smith Johnston and Councilor Adriana Garibay briefly debated the merits of the funding with Voetberg, urging him and others to consider budget realities.
“We have to be very careful, and then not just say ‘let's go ahead and do it,’” Garibay said. “We have to pay attention on how we're going to spend the money.”
Voetberg defended his support for the theatre, arguing that the faster the city could get the theatre operational the sooner it would provide a financial benefit to the city in the form of tax and ticket sale revenue.
“We can finish this out and start to recover the money that we've invested into the project through sales tax, through lodging taxes, and also through the lease agreement,” Voetberg said.
The plan, as it stands, is to use $1.5 million in funding from the city to complete a portion of the theatre and earn a temporary occupancy permit. According to Fox Theatre Board of Directors President Joe Clark, that would make the theatre eligible for more state grants and allow the board to pursue the rest of the money needed to complete the theatre and earn a final certificate of occupancy.
During a previous presentation from Voetberg and Fox Theatre Board of Directors Vice President Todd Rayan, the board included that it expects to be able to bring in revenue and help the city with debt payments on the bonded $1.5 million within three to five years.
Centralia City Manager Michael Thomas raised staff concerns with those projections, including funding, timeline and ability to help with debt payments, referring to the plans as “somewhat optimistic.”
“We appreciate all the hard work Mr. Clark and his team have put into it,” Thomas said. “We don't come to the same conclusions, city staff doesn’t, with some of their estimates on timelines and their ability to return funding.”
For the latest reporting by The Chronicle on The Fox Theatre with more details about the funding outlook, visit https://tinyurl.com/3pebm7d8.
