The Rialto Square Theatre board voted Wednesday to seek bids for the Two Rialto Square office building.
The six-floor office building is next door to the Rialto Square Theatre and originally was made part of the complex to create a source of revenue for theater operations. But repair costs and a dwindling tenant base have become a drain on the Rialto budget.
“I think it’s a very positive step,” board Chairman Robert Filotto said of the decision to seek a buyer. “We’re down to five tenants. We have tenants only on floors one and two now. Floors three, four, five and six are empty.”
At the same time, Filotto said the board won’t sell Two Rialto Square at any price.
“This is all subject to getting a bid that the board finds reasonable,” he said. “The board has the right to rescind all offers.”
The bid package should be prepared in about a week. After that, Filotto said, it’s likely to be a 90-day process. He said there will be a 60-day period when prospective buyers can visit the building.
The troubles at Two Rialto Square worsened in July when a burst pipe on the top floor created a leak that damaged all six levels of the building. It was the second severe water leak in two years.
Filotto told the board at the Wednesday meeting that the insurance check for the latest damages will be $548,000.
Not all of that is likely to be spent given that four floors of the building no longer are being used, he said.
“We’re in the process of going through what needs to repaired and what doesn’t need to be repaired,” Filotto said.
The exit of tenants is accelerating. A month ago, the Rialto reported nine tenants in Two Rialto Square.
The board has been considering a sale of the building for the past couple of months, and some potential buyers have emerged.
“At this point, there are at least three prospective people that are on our radar,” said board member Joe Carlasare, who heads the Building Committee. “I don’t think there’s anything hard, but there are three people who have shown some interest.”
Putting the building out for bids will help the board determine its potential market value, Carlasare said.
He said there was some concern on the board that the Rialto not be “obligated with a low-ball offer” through the bidding process. “It doesn’t bind us in any way,” he said.
Previous boards had explored a sale of the building while ultimately deciding to keep it.