The Rialto Square Theatre Board is looking at a possible sale of its Two Rialto Square building after a water leak in July caused an estimated $280,000 in damage.
The future of the building was discussed at its Wednesday meeting, in which the board approved a 2019 budget with a $444,000 deficit.
“This budget looks a lot different if you isolate it from Two Rialto Square,” board member Joe Carlasare said at the meeting.
The budget projects rental income from the building to drop by more than $100,000 because of tenants moving out. Repair costs for all Rialto operations are going up by $72,000, mainly because of Two Rialto Square.
“It’s almost two-thirds of our maintenance and repair budget that goes to Two Rialto Square,” Carlasare said.
The latest troubles at the office building adjacent to the Rialto Square Theatre occurred the first weekend of July, when a leak in a line to a heat pump caused damage on all six floors.
The damage from the leak is estimated at about $280,000, board Chairman Robert Filotto said.
“But we think it’s going to grow from that,” Filotto said.
He said that the Rialto has insurance that will cover most of the damages, however, the policy has a $55,000 deductible that will have to be met first.
Filotto said the board is talking to the Rialto Square Theatre Foundation about potential help to cover the deductible.
At the end of the Wednesday meeting, the board met in closed session to discuss the subject of leases and potential sale of property.
Although board members did not name Two Rialto Square as the topic of the closed session, Filotto said Thursday that a sale of the building is being considered.
“Are we exploring it? Sure we are,” he said. “There’s been no straw poll, but the board is leaning toward that.”
The Rialto over the years has considered a sale of the Two Rialto Square building.
The topic came up again in early 2017, but Filotto had urged the board to keep the building for the cash flow it brought to Rialto operations. He also urged the board to hire Olivieri Real Estate to increase rent revenue.
The board hired Olivieri to address tenant concerns and draw new tenants into the building, but vacancies have increased since that time.