BEACH THEATRE FOUNDATION LOAN PAYBACK MEETS MILESTONE
Loan Payback By Pledgors Seen As Ahead Of Schedule
CAPE MAY, NJ, October 9, 2012 - The Beach Theatre Foundation (BTF) announced today that it was delivering another monthly repayment totaling $7,000 toward the $100,000 loan made by the City of Cape May to the non-profit foundation. The latest installment marks a total of $38,700 being paid back on the loan made in October 2007. At that time, the City utilized the New Jersey Small Cities Grant program to fund the loan to the BTF, which the foundation then used to pay for a one year lease, with option to buy, of Cape May’s Beach Theatre from its owner, the Frank theatre chain. The BTF was then engaged in efforts to operate, acquire, restore and redevelop the movie house, which subsequently was demolished in 2011 after the City refused to confirm it as an historic site. In order to secure the loan, the City required individual pledgors to agree to donate to the BTF amounts sufficient to repay the loan in the event the BTF could not. Several dozen concerned citizens and fans of the theatre, the majority being BTF trustees and local residents, stepped forward and signed pledges to stand behind the loan.
The 2007 loan was originally set to mature by its terms on October 1, 2012. However, in March 2009, the Theatre owner refused to grant a second lease extension to the BTF, and in April 2010, citing its legal right to accelerate the loan under those circumstances, the City sought to call the note over the BTF’s protests that acceleration would effectively kill the redevelopment project still in progress. The parties disputed the acceleration until the Theatre itself was demolished in September 2011, after the City Council overrode its Historic Preservation Commission and Planning Board, refusing their recommendations to declare the Theatre site historic, and granted a demolition permit to its owner. Loss of the Theatre resulted in a pre-payment program agreed to by the City and the Foundation in December 2011 wherein the BTF agreed to act as a conduit forwarding pledge payment funds received on a monthly basis to the City, and the City agreed to release each pledgor to the extent of paid pledges.
Each pledgor signed a written instrument on a form drafted in 2007 by the City Solicitor stating that the pledgor has "a period not to exceed five (5) years" to pay the pledge in the event the BTF does not. The BTF has maintained that, unfortunately, the pledge instruments are ambiguous as to when the five year period begins to run, so that, as the instrument might be construed if the City took action against the pledgors, those persons may have five years from 2010, or even 2012, to fulfill their pledges. The settlement agreement has resulted in the BTF contacting pledgors and asking them to remit funds as soon as practicable, but it does not require the BTF to seek to enforce payment.
In either case, the BTF believes that the overwhelming majority of the loan pledges will be paid back far in advance of the outside dates. Based on the paid pledges over the past 10 months, the BTF is confident in the continuation of pledges being made good to the City of Cape May.
BTF President, Steve Jackson, added "These pledges are a testament to the citizens who believed in the historic and economic value the Theatre brought to Cape May. The payback by the pledgors is even more amazing considering the Theatre was lost last year as a direct consequence of the current administration's lack of concern for maintaining an important community institution that had been part of Cape May for over 60 years. The BTF is proud of the pledgors, but no small town should ever be proud that they lost their last movie theatre."
About Beach Theatre Foundation, Inc.
The Beach Theatre Foundation, Inc. is a non-profit 501(c)(3) designated corporation founded in 2007. Its mission was to save the historic Beach Theatre in Cape May, New Jersey and operate the theatre to enrich the entertainment, cultural and educational values of Cape May and southern New Jersey. The Beach Theatre was first opened in 1950 as an 806 seat movie theatre by Huntʼs Theatres, Inc. Designed by famed architect William Harold Lee, the theatre was placed on Preservation New Jerseyʼs Ten Most Endangered Historic Sites in New Jersey in 2008.
Should be interesting to see how this plays out.