I recommend Council grant up to $300,000 in tax increment financing for repairs to the Babcock Theater.

Babcock Theater - The city signed a 15-year lease with the Art House Management LLC, a nonprofit limited liability Co. for the Babcock Theater in 2018.  The lease may be extended 15 years through three, five year extensions.  Section 6 Funding of Repairs and Renovations - City shall not be required to make any improvements, replacements of any kind or character to the leased premises except as provided below...  City shall provide Lessee funds as approved through the budget process by the Mayor and Council for improvements to the premises.  Lessee shall make recommendations to the City regarding improvements, however, City shall make final determination and approval of improvements."  The city is not obligated under the lease to maintain the Babcock, however the partnership that was created in 2018 to secure the theater anticipated both private and public investments to bring the property into a functional state of repair. 

In 2017 an Ad Hoc committee was created to review and make recommendations to Council regarding the Babcock Theater.  A January 22, 2018 memo to Council recommends Council approve the Art House Cinema & Pub proposal and to negotiate a lease.  Under the Financial Impact section of the memo, the following was stated.  The Council approved $500,000 in the FY 2018 budget for the capital replacement/improvements and discussed budgeting the same amount in FY 2019 for the Babcock.  No money was appropriated in the FY 2019 budget for the Babcock.  

John Caterino, Facilities Manager has been working with the Babcock to assess the facility's condition and offers the following:  There are a substantial number of rehabilitation and repairs that are needed at the Babcock Theater. The major and immediate items that have been identified by City Staff are the following:
- Sidewalk vault repairs – this project was completed by Art House with the aid of a Historic Preservation Grant.
- Exterior marquee rehabilitation – estimated repair costs at $250,000
- Boiler stack masonry repairs – estimated repair costs at $30,000
- Projection booth repair – estimated engineering service costs TBD

Visible deterioration, water infiltration, and drainage issues of the marquee give cause for concern about the overall integrity of the structure. Thus, City Facilities Division secured services from Cushing Terrell in December 2023 to conduct a condition audit and provide a written report summarizing findings and providing repair methodology. The report recommends various degrees of repair, from general maintenance to replacement of components and systems as most of the components are in fair to poor condition. For more detailed information on the marquee or to see the engineers report, reference item 3 from the March 18, 2024 Council work session. Estimated cost to repair is $250,000. 

The original steam boiler exhaust stack is experiencing masonry bond failure, brick deterioration, and delamination of cementitious coating. To avoid further degradation and to ensure historic integrity of the element, Staff recommends repair by method of tuckpointing all good and serviceable mortar beds, replacement of failed masonry and mortar, and skim coat application. Estimated cost to repair is $30,000.

Babcock Theater had a projection booth added at some point in time after the building was constructed. It is still in use today to house the motion picture projector equipment which projects the movie onto the screen. The projection booth element is pulling away from the building and if not repaired it could cause a larger structural failure. No measurement tools have been placed on the element to observe the amount of movement but if left unaddressed it could become a liability. Since City staff is unaware of any drawings of the projection booth it is difficult to pinpoint the type of structural failure or the repair methodology. Therefore, Staff recommends securing a licensed professional structural engineer to perform an analysis. Estimated engineering cost is $4,000.

Therefore, with all of the above information in mind and the information included in the enclosed power-point presentation from the Art House, we need to decide how to move forward.  We believe $300,000 is needed in addition to the $299,891 Art House has secured for the sidewalk vault, stairs support/mop closet projects.

As requested by the Council during their October work session, we discussed the impact of using the revolving loan fund to help pay for these improvements.  Because there are several more critical projects to be considered in upcoming years, staff and the Art House see a loan as making it more difficult to fund raise for future projects.   

The final attachment is a letter from the Downtown Partnership Board recommending against using TIF dollars to fund capital projects for these city assets.  

City Council may:

• Approve; or,
• Not Approve

Babcock Theater - $300,000 is recommended by staff to renovate the Marquee, repair the brick boiler stack/chimney and to investigate the projection booth repair.  The cash flow projection spreadsheet is attached and anticipates positive year-end balances going forward. 

*  A TIF reimbursement agreement totaling over $600,000 for the Stone building project is no longer a liability for the TIF budget.  This grant has been revoked because the project did not meet its timelines in spite of two extensions.