JOLIET – A Will County judge on Friday approved a $600,000 loan to the Rialto Square Theatre to pay old bills.
The loan comes from the Rialto Square Theatre Foundation, the fundraising arm of the theater, which needed court approval to amend the terms of an endowment.
The cash-strapped Rialto has nearly $650,000 in unpaid bills.
The loan from the foundation will be used to pay bills that are more than 30 days old, which total closer to $585,000.
The loan will not take place immediately. But the foundation has already begun the process of converting investments to cash to provide the money, said Ed Jarot, attorney for the foundation.
"We're over the biggest hump," Jarot said after a quick hearing in which Judge John Anderson approved the loan.
Court approval for the loan was needed because the endowment terms allowed only interest, not principal, to be spent. The loan uses principal from the endowment fund, which totals about $885,000, according to Jarot. The Rialto has agreed to pay the money back at the rate of $50,000 a year.
The Rialto also stands to get $250,000 from the city of Joliet after the theater's governing board this week approved a five-year contract with VenuWorks to manage the theater. The city is providing the Rialto with $500,000 in two installments this year. At least a one-year contract with a management company was required before the city would provide the first $250,000 installment.
Rialto officials did not provide a timetable for when they plan to pay off the bills.
"We're going to pay all of our obligations as quickly as we can as resources become available," said Interim Executive Director Timothy Berry.
The Rialto has nearly $100,000 in bills that are more than four months old.
Cash flow problems at the Rialto go back to at least June 2015, when the finance manager told the board that he couldn't pay the gas bill and had gotten a late notice from Nicor. Problems worsened by late 2015 when the theater fell behind on payroll taxes and needed the city to step in to ensure that acts would get paid.
What followed was a tumultuous 2016 in which former Executive Director Randy Green was forced to resign, the theater stopped booking shows for months, and VenuWorks was brought in as an outside management company to run the theater.
In December the entire Rialto board resigned, and a new board has since been put in place.