Despite the strong objections of Comptroller Joan M. Pratt, who described the deal as a "bailout" for a failed business and a continuing drain on public funds, Baltimore's spending panel voted Wednesday to purchase the mortgage on the ailing Senator Theatre.
The vote formalizes a proposal Baltimore Mayor Sheila Dixon put forward in April for the city to pay $950,000 to 1st Mariner Bank for the mortgage on the 900-seat theater and two other properties.
It also gives the city the authority to foreclose on the Senator, after which it plans find a new owner or operator for the theater.
"We think this is a good outcome," Baltimore Development Corp. President M.J. "Jay" Brodie said.
After the city takes control of the title, a public auction of the theater will be scheduled. The city will have a measure of control over the process because any potential owners would have to bid more than the $950,000 spent to gain control of the title. The Dixon administration had feared that without its intervention, land speculators could have snapped up the property at a low price at a foreclosure auction and then left it vacant.
Dixon reminded officials Wednesday that the city has put about $3 million to $4 million into developing the Senator's Belvedere Square neighborhood, and that the loss of the theater could undo the progress made there.
But the city's comptroller disagreed, arguing that Belvedere Square is successful despite the presence of the theater, which she said is often lightly attended.
Baltimore should not be in the business of owning theaters, she said.
"I don't see how it is going to be profitable," Pratt said, noting that there is a nearby movie theater in Towson.
Any future owner or operator would likely ask the city for financial support, Pratt said. She said that the building will require costly repairs on the roof and other parts of the theater, which she said is not in compliance with standards set by the Americans with Disabilities Act.
The comptroller's office also objected to a part of the deal that allows the current owner, Tom Kiefaber, to keep the Baltimore County house that he had put up as collateral.
The action came after a long history of city spending on the Senator, a historic movie palace with a single screen that has suffered in the wake of more modern, multi-screen complexes. The city issued the theater a $180,000 grant in 1999. Next, in 2002, the city guaranteed half of a $1.2 million loan that 1st Mariner Bank extended to Kiefaber.
Dixon officials, along with City Councilman Bill Henry, said the theater has attracted potential buyers. They declined to name names, but Buzz Cusack, who owns the Charles Theatre, a five-screen movie theater near Pennsylvania Station, said Tuesday that he will bid on the Senator.
Running a single-screen theater would be "very difficult" Cusack said, and he would want to install a restaurant, similar to what he's done at the Charles.
"It is not going to be a great money maker," he said of the Senator. Cusack added that he still needs to determine how "big the problem is" at the Senator, and would not say how much he would bid on the property or whether he would ask for the city's help.
