'Reel' hopeful: Theater proposal gets general approval from city
WORTHINGTON — Since the closure of Northland Cinema 5 in Worthington nearly three years ago, the public has made it known it wants another theater in the community.
It’s something Worthington City Council members hear time and again, and after putting out a call for proposals in May, they’ve received two options for consideration.
A $3 million difference in options between Twin Cities-based Odyssey Entertainment and West Mall Theatres Inc. President Todd Frager brought Frager before a special city council work session Wednesday afternoon. He was joined by local businessman Kevin Donovan.
Frager has wanted to bring a theater back to Worthington since he was forced to close Northland Cinema 5 in October 2015 due to the pending demolition of the Northland Mall.
His proposal seeks the city’s willingness to construct a building to house five theaters, a concessions area and restrooms. Frager will provide the guts — the movie screens, projectors, sound equipment and seating needed to operate a theater — and be responsible for all operational expenses except real estate taxes. The city’s estimated investment would be $3 million.
Frager said he wants the option to buy the building — perhaps in as little as two years after opening.
“It is an asset for the city and if the building is sold, it’s the city’s money,” Frager said. “If I operate the theater for two or three years, then I’d have actuals (revenues and expenses). Two years of hard numbers, then that building is a possibility to purchase. That’s the term I’m looking for.”
The idea was appealing to Councilman Alan Oberloh, who said if the city entered into a lease for five years, it could offer the building to the occupant at an established price.
“If they’re not interested, offer another five-year contract,” he added. “I don’t believe the city is going to own a theater. We’re going to own a building that would house a theater. I’d rather see us be a building owner than an operator.”
City Administrator Steve Robinson said it’s clear an investor isn’t going to come into a city the size of Worthington and build a movie theater.
“The bottom line is it’s not economically feasible for an investor to come in and entirely fund a brand new movie theater. If it were, it would have occurred by now,” Robinson said.
“The only way we’re going to end up with a new movie theater in Worthington is if the city or another public entity participates in funding it.”
Robinson said the proposal submitted by Frager and Donovan is “probably the most optimistic,” and noted both plans estimate box office sales of $550,000 in the first year of operation.
The Odyssey Entertainment proposal requested the city be responsible for complete development, ownership and operations, with the theater operator acting as a contracted management consultant. This proposal also requested a specific site, and came with an estimated city investment of $6 million.Bonding a likely scenario
If the council decides — and that may happen within a month — to move forward with plans to build the building, Robinson said a $3 million bond will likely be pursued. That amount would fund the purchase of land, engineering and construction.
Payment on the bond would come from an increase in the city share of a Worthington resident’s property taxes. Though more discussion will be forthcoming, the initial idea is to increase the city levy by 7 percent. Doing so would generate enough money to pay off the bonds in 15 years — perhaps sooner if the city continues to grow or Frager is able to purchase the building.
The levy increase, for a home valued at $100,000, would be approximately $24 a year (see table) — a cost council members agreed would be less than driving out of town for dinner and a movie.
“I think what (you’re) proposing … is the obvious way to go,” said councilman Mike Harmon. “The city needs a theater.”
Councilwoman Amy Ernst said the council needs to work in a direction so people have a better outlook about Worthington.
“We need to make people proud of the city of Worthington,” she added.
Oberloh asked if council members were receptive to constructing a larger building to include more than just a theater. Councilman Chad Cummings said amenities such as a roller skating rink, an indoor park, a few bowling lanes or an arcade could be part of an overall complex.
“When we originally talked about this, we talked about a six-screen theater, with the sixth room as an arcade,” Frager said. “If that didn’t pan out, we’d add another screen. But that sixth room just takes the cost up there.
“I’m not opposed to an arcade — the staff is already going to be there,” he added. “I want traffic. If there’s another reason for people to come there … that’s fantastic — that’s what I want.”
The only location idea presented during the council meeting was to construct the building on the former Northland Mall property currently owned by Yellow Company LLC (Aaron Marthaler). Robinson said the city has yet to discuss a possible parcel purchase with Marthaler, and noted there are other options if it needs to look elsewhere in the community. Approximately three acres is needed for development.
The earliest construction could begin on a building for the theater is next spring, and Robinson estimated it would take eight to 10 months of construction.Feedback sought
With the information now in the hands of the public, the council wants to hear feedback from residents.
“I understand the want, but I also want to give the real answers,” Cummings said, adding that he’d like to see a tax calculator made available so residents can see just how they will be impacted financially.
“This project, this expenditure, is a little outside the norm because it’s public investment,” Mayor Mike Kuhle said. “I think the council needs to have as much feedback as possible.”
In other business Wednesday, the council:
- Had a brief discussion with Worthington Police Department Capt. Kevin Flynn regarding the use of all-terrain vehicles within the city limits.
Current state law allows ATVs to travel on state highways and state roads. That means the vehicles can travel Minnesota 60, and Nobles County State Aid Highways 10 (Crailsheim Road) and 25 (Diagonal Road/10th Street/East Avenue/Gateway Drive), but cannot travel on city streets.
Flynn said law enforcement needs direction because there is confusion. The council can choose to either allow ATVs on all city streets, or to not allow them within city limits at all. If the council chooses not to allow ATVs, it would have to establish an ordinance.