A 1982 lease agreement between the City of Billings and the Alberta Bair Theater Corporation for operation of the theater expired on October 18, 2012, and the theater corporation has asked to renew it for an additional, 30-year term. 
The Alberta Bair Theater originally was constructed in 1931 as the last Art Deco style theater in the Fox Theater chain, owned in part by the 20th Century Fox Corporation.  The decaying building was purchased in 1978 by a movie house company that intended to turn it into a 3-screen, modern movie house.  It also was considered as a site for a City parking garage.  The Fox Committee for the Performing Arts, which had scheduled artists in the past, had the structure placed on the National Register of Historic Buildings, and then involved the City and community leaders in a $5.2 million fund drive to renovate the building.  Alberta Bair, born in a homestead on the spot where the theater was built, provided the lead gift for the project, and the building was renamed in her honor.  It is a 1,400 seat venue for professional touring companies, local performing groups and educational programming.

The agreement was revised by the Alberta Bair Theater Corporation Board.  It proposes two major changes from the 1981 original:

• The first change, in Section 18b Damage and Destruction of Improvements,  outlines how repairs would occur if the building was damaged in varying degrees.  As in the past, both the theater corporation and the City would be covered under insurance provided by the theater company.  The City would agree that the proceeds of any insurance would be used to repair the building if it would be possible to do so with little or no interruption to the theater company operations.  If the premises were severely damaged or destroyed and would substantially interrupt theater company operations, then the parties would have to mutually agree how the insurance proceeds would be used to support a performing arts center;
• The second change, in Section 24, Renewal of Lease, gives the theater corporation the right to renew the lease for an additional, 30-year term, providing the theater corporation gives notice of its intent to renew at least one year before the agreement expires.  If the City does not receive such a notice, it must remind the theater corporation in writing to its right to renew within 60 days of the City notice. If the theater corporation fails to respond in that time frame, the right to renew terminates. 

The City Council may review the lease agreement and:

• Approve the lease agreement as proposed by the Alberta Bair Theater Corporation Board;
• Direct staff to amend the lease agreement and return it to the Alberta Bair Theater Corporation Board for further consideration; or
• Not approve the lease agreement and propose a short-term contract with the Alberta Bair Theater Corporation for the balance of the current performing arts season while deciding upon another way to operate the theater in the future.

The Alberta Bair Theater Corporation pays the City of Billings $1 annually as rent for the theater.  It also pays all other theater operating costs, including the utilities and taxes, as well as the insurance noted above.  It addition, it also makes all renovations or improvements to the theater as determined by its board and in compliance with City codes.  The theater corporation board  must respond to the City on any renovations or improvements the City requests. 

Staff recommends approval of the lease agreement with the Alberta Bair Theater Corporation as presented.