That means the city will not see the $539,419.05 the Chicago businessman owes the city from when he intended to buy the venue in an installment deal.
Doughtie said, however, “There is no need for us to continue to spend that money through legal fees and try to recoup.”
L&M Hospitality, which ran the theater, was a limited liability corporation, the mayor said. “There were no assets in that LLC. It's not like we were going to get that money.”
Doughtie said the pending cash only sale is based on negotiations between City Attorney Gilbert Chichester and Gatling's attorneys. “The information provided to us is the money is available.”
There are no options or financing requests in the proposal, Doughtie said.
Doughtie views the proposal as getting a stay of execution. “We're in death row looking at $1.7 million to come up with in cuts and services or a tax increase. We'll be able to pay off a substantial amount of the debt and maybe looking at much needed capital improvements.”
The city owes some $19, 690,000 on the building and the money received from the proposal would be used to pay off some of that debt. “Part of the agreement Bank of America agreed to is we have to take proceeds on the sale and pay it on the debt. We can't buy a new fire truck with it.”
Doughtie said the proposal will also free up nearly $2 million in debt reserve which will also be applied to the debt.
The mayor hopes the deal will be consummated by Friday. “I think in the very near future we will have the paperwork back and divulge the details. I think when everyone sees all the details, I feel it may be a good for him and we're looking at a good deal for us. I think we're using good debt management strategies.”
The plan is apparently for Gatling, who was in a meeting this morning in Chicago and could not be reached for comment, to keep the venue as an entertainment facility. “Mr. Gatling buys the theater which is in the hub of the entertainment district. If there's been some communication to development of more property that would be a huge monetary investment. It seems to me you invest in infrastructure to develop property it brings in jobs, tax (rolls) increase and sales tax increases.”
Once the deal is finalized the city will start immediately working with Bank of America to restructure the remaining debt. “There are so many variables in the one we have, rates can go up. We want to try to find something with a fixed rate,” Doughtie said.
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