JOLIET – The Rialto Square Theatre board delayed a vote on a VenuWorks contract at a special meeting Thursday, which was called to vote on the agreement.
However, the board did take legal steps needed to pave the way to a $600,000 loan from the Rialto Square Theatre Foundation to pay off a backlog of bills.
The agreement with VenuWorks must be completed before the Rialto gets another cash injection – $250,000 from the city of Joliet, promised once the Rialto has at least a one-year contract in place with a management company.
The board will consider the contract again at its regular meeting Wednesday.
The VenuWorks contract would be a five-year agreement with a clause allowing either side to walk away after three years.
VenuWorks would be paid $114,000 a year in base management fees.
The company also would get 5 percent of food and beverage sales and 10 percent of revenue from advertising, sponsorships, naming rights and pouring rights.
The VenuWorks cut from other revenues concerned board member Thomas Osterberger, who said he wanted to see more numbers and projections in the agreement.
“When they get a certain percentage of food and beverage sales, I want to know what the projections of those sales are going to be,” he said.
Osterberger also expressed some concern about approving an agreement with VenuWorks before seeing a budget.
Meeting budget is a key part of the contract, which calls for VenuWorks to refund a portion of its base management fee if theater operations go over budget.
VenuWorks, which has been at the Rialto since September on two short-term contracts, developed a business plan that projected a $500,000 deficit in 2017. That deficit is to be covered by the city contribution, which will be provided in two $250,000 installments.
The board voted to table the contract vote to Wednesday to give Osterberger time to discuss potential numbers with VenuWorks.
The board voted to file a petition seeking court approval of the foundation loan. It also approved an agreement to pay back the loan at the rate of $50,000 a year with 1 percent interest.
The loan would be used to pay off bills that are more than 30 days old, which totaled nearly $585,000 on Thursday. All unpaid bills, including less than 30 days old, totaled nearly $646,000.
The foundation needs court approval because the money would come out of an endowment that was set up to leave the principal intact while spending the interest on the Rialto.
Ed Jarot, attorney for the foundation, said a petition could go to court for possible approval Feb. 24. It would take some time after that to convert bonds and securities into cash to give to the Rialto, he said.