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IDA reaches repayment agreement with new downtown theater owners; county asked to approve subordination to preserve loan priority
Summary
IDA staff told the committee a long-outstanding IDA loan to a downtown theater (dating to 2009—10) remains unpaid; the new owner agreed to a 10-year principal-only repayment on roughly $41,005.22 and the IDA recommended a subordination agreement so county CDBG-linked loans keep their prior legal position.
IDA staff briefed the administration committee on a complicated outstanding loan tied to a downtown theater that originated in 2009—10. The IDA has collected on most historical loans but one remained outstanding after the original borrower failed to pay and ownership later changed.
Staff said the new owner, identified in loan paperwork as 47 Chestnut Street LLC, agreed to repay the IDA the outstanding principal over a 10-year schedule and that to preserve the county's previous lien position the IDA attorney recommended entering a subordination agreement to maintain parity with county filings made at the time. The IDA is not seeking interest, staff said, and the agreement would close the loan and allow collection without triggering a larger reversion to the state if too much is repaid in a short fiscal period.
Committee members discussed the collection strategy and the fact that the loan funds originated as CDBG monies, which trigger specific state reporting and recapture rules; the committee agreed to move the subordination agreement forward to the full board for consideration.
