(UPDATE) 8:58 p.m.—The city will officially submit a proposal to sell the Senator Theatre to its current operators on Wednesday.
Under the proposed arrangement, the city will hold the $500,000 Purchase Money Mortgage on the property.
The agreement would terminate the current lease of the building—operated by James "Buzz" Cusack and his daughter Kathleen Lyon as Senator Theatre, LLC—and sell the building to its tenants.
The city’s director of finance has recommended the approval of the sale, according to the Board of Estimates agenda.
The agenda also states that the project’s financing needed to be revised because construction bids for the renovations were higher than anticipated.
"The new financing strategy centers on a sale of the property, rather than a lease, which will allow it to be used as collateral for the City and State of Maryland loans that are essential to the project," the proposal reads.
The total cost of the renovation, including the acquisition of the property, is expected to be $3.49 million.
"There was literally no way to make it work without having the Cusacks actually own the property. The city is going to hold the mortgage on it, and the city and the state together will share first position so, god forbid, anything goes wrong it will still be in our hands to determine what happens with the property, which was the whole point, as far as I was concerned in owning it in the first place," said Councilman Bill Henry, who represents the area where the theater is located.
- State Loan: $560,000
- City Loan: $700,000
- Community Legacy: $425,000
- Equity: $950,000
- Bank Loan: $350,000
- Façade Grant: $6,000
- Purchase Money Mortgage: $500,000
The bank loan is expected to bridge the financing gap between now and the time an equivalent amount in state and city historic tax credits kick in.