CAPE MAY — “Show us the money now,” said Jerry Gaffney, co-chairman of the Save the Beach Theatre Foundation to city council at an Aug. 7 meeting.
He asked council to authorize a $100,000 loan check be issued immediately to the foundation before final approval from the state Department of Community Affairs (DCA).
“You can do this,” said Gaffney, who is a former Cape May mayor and councilman.
He said council could take care of “red tape and technicalities,” at a later date.
A $100,00 loan to the foundation has been pending since May from the city to allow the non-profit group to lease the theatre and give the foundation time to find a developer to purchase the building at an estimated cost of $12 million.
Earlier in the meeting, Gaffney asked council for a date when the foundation would receive the $100,000 loan from the city. He said the group was running short on time and the lack of a finalized agreement prevented the foundation from holding fundraising activities such as a planned benefit concert.
City Manager Luciano V. Corea Jr. said there was no set date but acknowledged he was aware the foundation had until Sept. 30 to complete the deal.
Gaffney said the agreement with Frank Investments could be signed tomorrow if the foundation had the $100,000.
Corea said he along with Councilman David Kurkowski and City Solicitor Tony Monzo met with representatives of Triad Associates Aug. 7, which have been hired by the city to help obtain the loan for the foundation.
“We fully expect to have the DCA approval and be able to move forward with the loan,” said Corea.
He an additional modifications would be added to the loan to address future use of the money for other projects.
Kurkowski said he was confident the foundation would have its loan by Sept. 30.
Gaffney said the foundation was “very, very close to finalizing an agreement,” with Beach Theatre owners, Frank Investments.
“Of course, we need your $100,000 to do this,” he said, noting the city had $640,000 in the account.
The money was originally procured for Congress Hall hotel’s rehabilitation. The hotel repaid the loan to the city.
Monzo said the matter was being reviewed by DCA and Triad Associates was negotiating a modified loan reuse plan, so it was prudent to wait until that was completed. He said it may not take until Sept. 30.
Monzo said he did not want to create problems with DCA by loaning the money before the reuse plan is in place. He said the city must then approve the loan by resolution and hold a public hearing.
Gaffney suggested the foundation should sign the agreement with Frank Investments and “hope to get the money someplace else.”
Mayor Jerome E. Inderwies said he would not turn his back on the matter.
After the meeting Gaffney told the Herald he was very disappointed with council.
Hopes were dimmed for the loan to the foundation in early July when DCA determined the foundation did not qualify for the loan.
A June 22 memo from Corea to council and the foundation outlined problems raised by DCA including: a loan for that type of project must be for the addition of permanent, full-time jobs to low and moderate-income individuals, and not for the retention of existing jobs.
It also noted there was no provision for the providing of a loan that involves leasing of a facility, as opposed to physical acquisition thereof and the loan must be secured by either real property or personal guarantees.
Later in the month, in a memo, Monzo said the loan could be made to the foundation without recourse to the city. He said he did not find anything in DCA regulations that requires the loan to be for the acquisition of a building.
The memo also stated he did not see any requirement the loan be supported by personal guarantees or a mortgage on a real property.
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