JOLIET – The new Rialto Square Theatre board got right to business Wednesday at its first meeting, addressing the nearly $600,000 backlog in bills.
The Rialto does not have the money yet. But board Chairman Robert Filotto said after the meeting that he expects the bills will be paid with a $600,000 loan from the foundation that raises money for the theater.
"I think it's the intent of the board that we move fairly quickly on the payment issues, especially with the local vendors," Filotto said as the board discussed the old bills during the meeting.
New Vice Chairman Jeff Pierson added that local companies should get full payment.
"Our local people need to be paid in full and not negotiated down," Pierson said.
Pierson made his comment after Finance Director Dale Evans advised the board that it could consider negotiating bills, although the Rialto was prohibited by state law from filing for bankruptcy.
Board members were asking Evans about the backlog of bills, which now stand at $597,000.
Evans said he had sent vendors, whom he described as "very patient," a letter last year describing the Rialto's financial situation. The letter in part told vendors that the Rialto cannot file for bankruptcy and "we recognize our obligations," Evans told the board.
"That doesn't mean that you're not able to negotiate with those vendors," he said.
That may not be an issue if the Rialto is able to get the foundation loan that Filotto described.
"It could be a good six weeks off unfortunately," Filotto said after a closed session, which apparently involved discussion of the potential foundation loan.
"That's not ready to go. We've got some hurdles to overcome," Filotto said.
The Rialto Square Theatre Foundation will have to go to Will County Circuit Court to seek a judge's approval to use $600,000 from the principal of an endowment fund to pay the theater's bills, he said.
Typically, only the interest generated by an endowment fund can be used. But the foundation plans to make a case for using the principal because of the financial situation facing the Rialto.
Rialto and foundation officials have repeatedly said that the foundation was trying to pay off the old bills but have not discussed how it would be done.
Foundation President Tricia Simpson would not comment Wednesday when asked about the loan.
Filotto said the Rialto would have to pay the loan back at the rate of $50,000 a year.
The board put off a vote on a five-year contract proposed by VenuWorks, saying it needed more time to review the 25-page document.
VenuWorks now has a three-month contract through March to continue operating as the management company for the Rialto. But at least a one-year contract with a management company must be in place before the Rialto begins receiving funds from the city of Joliet for 2017.
Visit TheHeraldNews.com for video from the new Rialto board's first meeting.