CAPE MAY — While members of the Beach Theatre Foundation expected city council to approve a $100,000 loan to the non-profit organization Tuesday, council tabled the resolution to allow City Solicitor Tony Monzo to examine loan documents.
A special city council meeting has been scheduled for Sept. 7 at 1 p.m. in City Hall auditorium “to discuss approving a loan agreement between the City of Cape May and Beach Theatre Foundation Inc,” according to the printed agenda issued today.
Foundation vice president Jerry Gaffney, a former mayor and city councilman, complained at the meeting that council has delayed approving the loan again and again.
“Until the public goes away and doesn’t push them, they are delaying this action,” he said.
Gaffney said council could have passed a resolution approving the loan contingent on Monzo’s examination of the documents.
“They choose a belt and suspenders approach one again,” he said.
Michael L. Zumpino, president of Triad Associates, a consulting firm hired by the city that specializes in economic development, presented council with a set of policies and procedures for managing a revolving loan fund of over $600,000 which council approved in an unanimous vote.
The fund was set up with the state Department of Community Affairs to loan $600,000 for the reconstruction of Congress Hall hotel.
That money was repaid to the city making it available for other loans for economic development projects. Zumpino said the guidelines his firm prepared included eligibility requirements and what security must be presented to assure repayment of the loan.
The Beach Theatre Foundation plans to lease the theater for one year while it seeks a developer to purchase and refurbish the theater complex. Since the foundation would lease and not own the theater, its does not have a building to offer for collateral.
A reoccurring theme at the meeting was what would happen if the foundation could not repay the $100,000 loan to the city. Zumpino said the city was not obligated to repay the $100,000 from taxpayer’s dollars if the foundation defaulted on the loan.
He said the city would simply have $100,000 less to loan for future projects. Assets on hand could be used as security for the loan or personal guarantees, said Zumpino.
Gaffney said the foundation has raised $30,000.
Zumpino said the fund should be used for projects that create or preserve jobs and one new job should be created or retained for each $35,000 of the loan. He said he had not seen the final terms of the loan and could not make a recommendation to council at that moment.
The loan would need to be repaid in five years, said Zumpino. He said the recipient of the loan should be putting 10 percent of its own money into the project.
Jack Wichterman, a board member of the Taxpayers Association of Cape May, said the group opposed the loan. He questioned if the foundation could not raise $100,000 to lease the theater, how would it raise $12 million to $16 million to purchase and renovate the building.
“Is the marketing plan put forth by the group viable or is there too much supposition contained therein,” asked Wichterman.
He questioned if the loan would set a precedent whereby other non-profit ventures such as Mid Atlantic Center for the Arts or Cape May Stage would “demand their cut of the pie, thereby deleting the fund altogether.” Wichterman asked of the theater would be in competition with the proposed construction of a new convention hall.
Susan Tischler, secretary of the Beach Theatre Foundation, said the organization has been delaying fund raising activities until it had the loan from the city. Borrowing a phrase from the Seinfeld television series, she said the theater was “loan worthy.”
Harry Bellangy, who said he has lived in Cape May “since rocks were salt,” said the Beach Theatre was gorgeous when it opened and be restored to that same condition. He noted Atlantic City once had 18 movie theaters but now has none.
Resident Gail Pierson said she couldn’t imagine living in a city where it was impossible to have dinner and see a movie. She said many like herself, were prepared to pull out their checkbooks to help the project.
Gaffney said the theater’s owners, Frank Investments, has a demolition permit that became effective the day after Labor Day.
Cape May – Governor Murphy says he doesn't know anything about the drones and doesn't know what they are doing but he does know that they are not dangerous. Does anyone feel better now?
