The State Theatre of Ithaca, Inc. has developed a proposal to acquire the Masonic Temple building on State Street and turn the building into a community center. The idea is that it would offer community space that was lost when the Women’s Community Building was torn down to make way for the Ithaca Neighborhood Housing Services apartment building.
Mack Travis, STI board president, said the idea for the project stemmed from a visit to Cleveland where he and Downtown Ithaca Alliance director Gary Ferguson saw how the creation of a real estate endowment for the historic theatres of Playhouse Square in downtown Cleveland helped save the theatres as well as revitalize the area.
“We rely very heavily on community donations and the hope is to establish a real estate endowment for the theatre,” said Travis. “Just as they did in Cleveland. And we’ve actually found out that this is not an unusual thing to do. So we have the idea of setting up a State Theatre of Ithaca foundation that would own real estate as a way to provide supplement income to the theatre.”
The State Theatre of Ithaca Foundation is the working name for the nonprofit foundation that would own the Masonic building and run the community center, where the New Roots Charter School would serve as an anchor tenant in the building.
“When the community center was torn down, it had a direct effect on one of our tenants at the Clinton House, the New Roots Charter School, in that they lost their auditorium, their lunchroom and their kitchen,” said Travis. “They as a school have grown and expanded in the Clinton House, but also took classroom space at the state theatre and also have use of our auditorium. It’s just been a very symbiotic relationship and it provides for additional funds for stabilization of the theatre. And it gives the school a very good place to meet.”
The project, so far called the “State North Community Center,” was granted loan support in the amount of up to $400,000 dollars from the Ithaca Urban Renewal Agency to assist in acquiring the property. But despite the support shown for the project from the IURA as well as the Park Foundation (offering a loan of $500,000) and Tompkins County Area Development (a loan of $200,000), there is no guarantee that the current owner of the building, Jason Fane, will sell the property.
Documents in the resolution packet for the IURA meeting on September 27 state that
“STI indicates” that an “agreement in principal” has been reached with the owner of the property to acquire the property for $1 million dollars. But when asked, Fane refuted the fact.
“At this time there is no agreement to sell the property, and also no agreement in principal,” he said. “There never has been any agreement in principal or otherwise. Anyone who says otherwise is living in a fantasy world. No written legally binding offer has been made and there is no offer for me to make a decision about.”
Fane emphasized that the property is for rent, not for sale, and that he is willing to do a long-term lease with a “responsible party.”
“I have no reason to sell the building,” he added. “It is an excellent development site that should see a new apartment house, hotel or office building. This would be part of the City's current policy of encouraging the construction of more apartments downtown, which is a sensible policy and one that I support and intend to participate in. There is a need for new housing and also the residents would provide customers for local business and they could walk to work and reduce traffic congestion.”
Fane indicated that while he gets some inquiries about renting the building, demolition of the building might be in the city’s best interests.
“In the long run, the best strategy for the site and for the City is to build a new large building there and one that would keep the property on the tax rolls,” he said. “Ithaca already has too much property that does not pay property tax and it would be irresponsible to make this problem worse.”
Travis pointed out that because the building is registered as a historic building, he thought it would be very difficult to demolish. The 17,500 square foot building was constructed in 1925-26 and used as a fraternal lodge by Freemasons and is on both the Federal and State Registries of Historic Places. Fane acquired the property in the 1990’s.
“I had spoken with Jason Fane last March because I was aware that the community center was going to be torn down about the possibility of taking this long vacant building and purchasing it on behalf of the theatre,” said Travis of the “agreement in principal”. “He has made it very clear that he prefers a long-term lease. Two years ago I tried to negotiate a lease for him for the school to expand and that was not possible. So this spring we began talking about it and he has never said that he will sell it. He says now he ‘prefers’ a long-term lease. But where we left it in June was that if I’m serious about buying it, if we bring him certified funds he will then be at a point where he will have a decision for me. Whether or not he will make a decision in favor of accepting the million dollar purchase price, I don’t know. But unless we have the funds there’s no way of knowing.”
“Mack Travis sent me many emails on the topic and also spoke with the commercial rental agents,” said Fane when asked when he was approached by STI about the property. “However, he never did the one thing that could possibly lead to a real estate transaction, namely to make a signed offer to purchase without conditions and a price that is more appealing than continuing to own the property.”
If the acquisition does not go through and Fane does not choose to sell the property then the funds from the IURA will have to be returned since they can only be used for an eligible project cost, said Nels Bohn, the IURA director of community development. In this case, he said, the eligible project cost is the acquisition of the property. The funds would not be dispersed for any other use and additionally the loan agreement will dictate the conditions of the loan, which would have to be met before the funds would be dispersed.
“It’s very specific to the project that was approved by the IURA,” explained Bohn. “And in fact the IURA funds still need one more approval before they would be available to assist State Theatre of Ithaca Inc., because Common Council has to vote to authorize the agency to approve use of the Gateway Proceeds funds, which $250,000 dollars of the $400,000 dollars is coming from that source and that source requires common council approval. So we’re a ways away from any kind of legal agreement.”
There is an additional safeguard for the agency, since collateral in the form a personal guarantee will be put in place when the loan agreement is signed.
“I guess we’ll just have to see how the property owner and the prospective purchaser work this issue out,” said Bohn. “That was not something the agency felt it had expertise on in this case. They were presented with a proposal on a project that they felt made sense, but does assume that the owner of the property will sell at the price that the State Theatre has suggested.”
Travis emphasized that the great appeal for the project is as a community center. With the charter school as an anchor tenant – they’ve already given STI a letter of interest to occupy the first floor of the temple if it is secured. They would share use of the auditorium and a commercial kitchen. Travis said he’s also received interest from Running to Places, Dan Smalls Presents and a church that could share the auditorium space.
“I certainly can envision things like the rotary pancake breakfast that used to on election day go to the Women’s Community Building, would come here,” said Travis. “The upper floors, we will install an elevator and then they’ll be eligible for non-profit offices. And this has interested the Park Foundation as a community center and a center for not-for-profits.”
The Park Foundation hired a consultant to look at the possibility of establishing a nonprofit center where offices could share services and strengthen the nonprofit community.
“We don’t have distinct plans for this, but from that report, it was evident that there’s certainly a desire in the community and among nonprofits to see something like this established,” said Travis.
Travis added that everything is tentative, and that until Fane agrees to the sell the building all of plans are just a wish.
“This could take a building that’s long been out of use and really make it a tremendous community asset,” said Travis. “But it’s totally dependent on Jason. I can understand his desire to hold it as a development site.”
As to Fane’s concern about tax-exempt property, Travis expressed belief that the community benefit would outweigh the amount of property taxes the city would derive from the property.
“One of the things this project does is really help create a friendly living environment downtown,” he said. “And there’s a tremendous amount of development planned for downtown. From the new holiday inn to the green street apartments to the building on the challenge site to the INHS building. So there’s a lot going on downtown, most of which will be taxable. So I think that the relatively small amount of taxes that this would bring in would be well made up by the increased development downtown in large part because we have the State theatre creating an entertainment hub. we have the kitchen theatre, we have Cinemapolis. There’s just a whole lot of possibilities for helping to create a very vibrant downtown.”
With the project dependent on Fane’s decision to sell, Travis said STI is looking at other property downtown for possible acquisition to continue the goal of creating a real estate endowment for the State. And even if the sale goes through, one building in the endowment would not suffice.
“I think it’s a very special opportunity at this point that would greatly benefit the community,” concluded Travis. “I know Jason has been generous to the community under the radar and it might seem paradoxical to be paying a pretty high price for the building, but it’s really going to be his benevolence and his determination that indeed he would sell it that would make it happen.”