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Wednesday, 19 August 2009 15:52

City taking no position on late theater payment

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Despite being late with the August theater lease payment, the city has taken no position on whether that means the $1 million discount Lafayette Gatling will get for making timely payments at the end of the agreement will be applied.

“The lease is strong,” City Manager Paul Sabiston told The Spin this afternoon. “We don’t waive our rights.”

Sabiston in an email yesterday said the Gatlings and L&M Hospitality RR indicated the entire monthly payment of $250,000 was wired to the city. The payments were broken into three wires, Sabiston said.

Sabiston agreed the city walks a fine line between scaring the Gatlings off by enforcing the terms of the contract and protecting the integrity of the document which allowed the Chicago businessman to buy the theater. “We’re glad to get the money,” he said.

Sabiston noted in the email the Gatlings just returned to Chicago this week after spending the weekend in Roanoke Rapids for the recent concert.

Gatling signed papers in March to buy the theater from the city. Timely payments mean Gatling will get a $1 million discount off the $12 million price of the venue.

The city will still have to pay the remaining amount due on the $21.5 million bond package used to finance the theater’s construction, opening and infrastructure needs.

According to the contract, rent payments are considered delinquent if received after the 10th day of any given month. Tenant shall pay the landlord interest at the rate of 10 percent per annum — or such lesser amount as may be the maximum amount permitted by law — on all overdue payments of rent from the due date thereof until payment. Notwithstanding this foregoing, tenant shall not be considered delinquent until after the expiration of five business days following written notice from the landlord.

Sabiston said in the email, not including the August payment of $250,000, L&M Hospitality has paid more than $678,000 since entering the lease and purchase agreements. “The July and August payments alone are $250,000 per month,” he said. “These lease payments are used by the city to repay the debt for the Roanoke Rapids Theatre.”

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