Growing up in northern Homeland, I saw my first film at the Senator Theatre at 10. I went four times in four days to see Dick Tracy and got sick from eating too much popcorn. During breaks from college and the Peace Corps, I regularly took in screenings at the historic theater and made an effort to be an ambassador for the Senator, as Tom Kiefaber advocated to patrons before each performance. I even took part in the 2007 campaign to save the Senator from the auction block, going door to door in the neighborhood to collect small donations and get the word out to area residents.
Given this strong, personal connection with the theater and the neighborhood, you might think I'd support efforts to bail out the Senator and convert the theater into a nonprofit. But I definitely do not.
For starters, proponents of a bailout make the mistake of confusing the fate of the Senator's owner with the fate of the theater. If Mr. Kiefaber defaults on his loan, he may lose control of the theater, but that doesn't mean the theater itself will disappear. The Senator is already on the National Register of Historic Places and cannot suffer a developer's wrecking ball.
Proponents of a bailout are also understating the real costs. Besides paying off $320,000 of the theater's debt, the plan to convert it to nonprofit ownership would cost the city $25,000 a year in annual property taxes the Senator currently pays. About a third of the city's assessable property is exempt from taxes because it's owned by governments, churches and nonprofits. The city doesn't need to increase that amount, especially in these times of economic distress, when there is talk of cutbacks in civic services and while so many less-affluent areas of the city are in such dire need.
The delusion of a multipurpose Senator Theatre also overlooks the fact that hundreds of thousands of dollars would be needed to revamp the Senator into an arts center, on top of $1.5 million in debts the theater has accrued after years of fiscal shortfalls. Where does this additional capital spring from during an economic downturn? If credit remains frozen and the Senator cannot amass capital after its baptism as a nonprofit charity, will we be asked for yet another financial bailout two years down the road?
I realize we are in the age of the bailouts - of auto companies, banks and insurers. But in the decade-plus of well-publicized financial problems of the Senator - of city loans and loan guarantees and fundraising campaigns - one thing that has not been tried has been a free-market solution.
If the Senator can't pay its loans, let the bank foreclose and put the building up for auction. At the right price, and with no debt, a new for-profit owner-operator might come in, make some needed improvements and turn the Senator into a viable business.
In any case, the City Council should put aside its inkwell, sign no dead-weight loans and let the for-profit sector decide the fate of the Senator Theatre.