Lincoln Aldermen hear from Jack Rooney regarding status of Lincoln Theater and other properties owned by MMIL Properties

 

[November 21, 2018] 

At the Monday night meeting of the Lincoln City Council the evening began with Jack Rooney addressing the council during the public participation segment. Rooney is the investor/owner of MMIL Entertainment and MMIL Properties, the entity that owns the Lincoln Grand 8 Theater, as well as several other properties in the downtown Lincoln area.

In recent weeks, news has come out that the Lincoln Grand 8 is in financial trouble, and that foreclosure is imminent. The theater has been under the management of Lincoln resident David Lanterman, who was also an owner/investor within the parent corporation.
 

Having the theater go into foreclosure and possibly sell to a new owner or be abandoned is of great concern for the city due to the Tax Increment Financing that was provided for the construction of the theater. The TIF allowed for the theater to receive a $2 million “loan” that would be paid back through the increase in property taxes derived from the improvement of the property.

Rooney reported Monday night that Lanterman is “stepping back” from the theater and that he (Rooney) is “stepping up” to try and save the theater from foreclosure.

Rooney began by saying he had no background in theater or real estate, but was an IT consulting business in Springfield. He said however he did have some experience in “decent sized” business.

He said in the last few weeks, he had come to Lincoln to get a snapshot of the business. He said that coming into it he was pretty nervous and was supposing that the picture would be so grim that there was just no way to save the theater. However, he said that right away there were four to five good ideas that presented themselves, and he felt that working to implement those ideas could save the theater and make it profitable.

Rooney said he was not coming to the city for any kind of assistance. He wanted to just let them know he is ready to go full speed ahead, get the taxes paid off, get the TIF taken care of and make some money.

He said that on the bad news side, he had expected to find that the properties belonging to MMIL would be in better shape financially than they are. He said again there are back taxes owed, and that on the property side of the story there is a need for a “cash injection.”

He said that MMIL is renegotiating with the bank regarding the theater, but with the properties there are several banks involved, so that is going to make it a bigger challenge.

Rooney asked if the aldermen had any questions. Ron Keller asked him to address his vision for the future of the theater. Rooney said that he does have a vision and that it includes faith in God. He said that he has always been a Christian, but in the last few years has become a stronger Christian. He said that it was God who brought Marilyn Altman to him at the perfect time.

Rooney said he had also spent time going around the town and talking to people in the community about Lincoln. He said he didn’t want to be derogatory, but he had seen that the community is in need of help. From there he said he had changed his focus from showing movies and making money to doing something to strengthen the community.

He explained his vision brochure that he would later hand out.

He also said he had a vision for the properties. He said that many of those properties are in what he calls the “Depot corridor.” He was referring to properties owned along Chicago and Sangamon Streets. He said that he can envision this area as a place to create a tourist visitor destination point where there were historical/tourism oriented and retail oriented storefronts that would capitalize on the area and make it a destination location in Lincoln.

Rooney also noted that his vision for the corridor was not short term or quick turnaround, it was a plan that would or could be implemented over a five-year-period.

Ron Fleshman asked how many properties Rooney was talking about. Altman spoke up and provided the number, which is 36.

Tracy Welch asked how many of the properties had, had their taxes sold. Rooney said he would venture that all of them have.

Welch then asked if Rooney’s plan included paying the taxes and also renovating the buildings. Welch noted that many of the buildings in question are in pretty bad shape.

Rooney said it would be a big challenge. He noted that he was feeling pretty good about the theater, but that the cash injection would be a ‘pretty tall order” on the properties side. He said he had done some traveling and had been looking for anyone with an interest in tourism who might be willing to invest. Right now though, he said he didn’t know where that money was going to come from.

He added that the properties had also funded the theater. He said that the properties themselves would have been okay, but money from the properties had been given to the running of the theater.

Welch said that since news broke that the theater was in foreclosure it had been the talk around town and some were speculating as to what would happen next. Among the questions Welch has heard is, will Rooney attempt to turn the theater into a 501C3 not-for-profit business?

Rooney said that he had spoken with his accountant/friend who had made that suggestion. Rooney said, “I was fine with it, it sounded good to me.”

Welch told Rooney that a 501C3 was tax exempt and that tax exempt property would not pay toward the TIF. Rooney then responded, “So I guess in that case, that idea is not going to happen.”

Rooney said that he was just kicking around some different angles. He then added that right now the theater is decent, his bigger issues are with the properties.

He said that he and Altman are implementing some cost saving ideas already. He also mentioned that one thing that would help would be volunteer labor. He noted that theaters in Chillicothe and Rushville used volunteer labor.

Rooney went on to say that the theater structure and size was not the best fit for Lincoln. He noted that the theater would be better suited for a larger community such as Bloomington or Peoria.

City Treasurer Chuck Conzo sought clarification on comment Rooney had made earlier about the properties supporting the theater. Rooney had presented that comment in such a manner that Conzo felt he was saying that the Theater TIF had impacted the taxes on the properties, making it harder for MMIL to pay those taxes. Rooney said no, that was not what he intended to say.

He explained that cash had been physically transferred from the properties accounts into the theater account to pay theater costs.

When Rooney had finished, Wanda Lee Rohlfs came forward with some questions about the TIF. She inquired about the balance on hand in the TIF fund to pay the upcoming bond payment for 2018. Conzo said there was money available to pay this year’s payment, but that the excess cash that had been in the bank prior to this year would be depleted, bringing the account down to close to zero.

Rohlfs then asked what would happen if in coming years the money is not available to make the bond payment from the TIF account. Conzo said that it would have to come from the general fund, and that the telecommunications tax, which is also shrinking each year due to fewer land line telephones, would be the first money to go, then it would just be taken directly from the general fund balance.

Rohlfs also talked about the exemptions from the TIF. She noted that according to TIF rules, when a property sells, the new buyer has the option to opt out of the TIF district.

Rohlfs concluded on that topic saying she was very glad that the 501C3 had come up during the discussion with Rooney. She said if that were to happen it would have a large impact on the city’s ability to pay off the TIF bond.

At the Monday night meeting there was no request for action by the city from either Rooney and the council moved on into the regular voting session agenda.

[Nila Smith]