Committee agrees to move forward on Oneonta Theater subordination agreement pending county attorney review

The Otsego County Intergovernmental Affairs (IGA) Committee moved to advance a proposed subordination agreement with owners of the Oneonta Theater, subject to review and recommendations from the county attorney.

Jody Brainski, who described a negotiated 10‑year repayment plan with the theater's new owners, told the committee the IDA had four outstanding loans dating to 2010 and three had been settled. "We had negotiated a settlement with new owners on a 10 year basis, to recover the balance of our loan," Brainski said, adding the IDA agreed to drop interest and penalties so it would receive principal payments.

Brainski said attorneys raised a priority‑position issue: signing a new agreement could place the IDA in a lower priority than the county. "Our attorney indicated that, well, technically, if we sign a new agreement ... we become in a lesser position than the county," Brainski said, and counsel recommended a county subordination agreement to preserve relative positions.

Committee members pressed for time to allow a formal legal review. The committee's chair said she preferred moving the resolution with the contingency that the county attorney review and approve the approach rather than delaying action. A committee member summarized the motion as approval contingent on the county attorney’s review and referral to the administration committee for follow‑up.

Speakers provided differing figures for the balance owed. One staff member said the IDA "still owe[s] us a little over $41,000 from a $50,000 loan," while another line item was cited as $85,978.84; staff noted those figures reflect different ledger entries and funding sources. Planning staff also explained a program‑income rule tied to CDBG funds: collections above the state threshold must be returned to the state. As one official put it, "anything collected in the state calendar year above 35,000 ... has to be returned to the state; anything under that amount we get to retain locally." The program‑income rule will influence how much the county pursues to collect and where funds would be allocated.

The committee did not sign a final subordination agreement at the meeting; members instead approved advancing the matter contingent on county attorney review and recommendations and referral to administration for final handling. The committee also discussed whether some older loans without recoverable collateral should be written off and asked staff to work with the county attorney on appropriate next steps.