Attached to Senate Bill 105, one in which the main purpose is to provide for a one-time tax refund to taxpayers who have a net North Carolina tax liability on their 2018 state individual income tax return, is a proposed $7.5 million appropriation to reduce the current debt the city owes on the Roanoke Rapids Theatre.
State Representative Michael Wray said this morning the add-on to SB 105 is essentially a substitute for a proposal that would have allowed Roanoke Rapids voters to decide via a referendum on a 1-cent sales tax increase to pay the theater debt. The 1-cent sales tax increase proposal died in the senate.
SB 105 is currently in the rules committee.
Said Wray, “The bill is a way to relieve the burden on the city’s residents.”
In a statement this morning, City Manager Joseph Scherer said, “The city of Roanoke Rapids had previously reached out to our legislators for assistance with resolving the debt from the Roanoke Rapids Theatre venture.
“The current proposal is still in committee for review and future discussion. We appreciate the General Assembly's efforts to help the citizens of Roanoke Rapids and hope that they will continue to look for ways to assist us in alleviating this financial burden from the City.”
Said Scherer: “The City is committed to meeting all of its financial obligations, to include the theatre debt, as we strive to provide efficient and financially responsible services to all our citizens.”
Scherer also confirmed this morning G&T Holdings, the owner of the venue, is up to date on payments.
City Councilman Wayne Smith, who has been a proponent of selling the venue, said he wanted to study the bill further before commenting.
Mayor Emery Doughtie was not immediately available for comment this morning.
Under the terms of the proposal, which is included in Section 2 of the tax refund bill, the Office of State Budget and Management would appropriate the sum for the 2019-20 fiscal year if the bill should pass.
The proposal stipulates the city must have applied to the Local Government Commission for approval of a plan to apply the appropriated funds to reduce the existing debt. It also requires a proposal for the payment of the existing debt that is not prepaid. The LGC has to approve the city’s application.
The summary of the proposed bill gives a history of the theater starting with the 2005 announcement by the North Carolina Northeast Partnership of a deal between private developers and the city for development of a 1,500-seat entertainment venue to be managed by Randy Parton, who would also perform there.
The city borrowed $21.5 million, with Local Government Commission approval.
The theater opened in July of 2007 as the Randy Parton Theatre, but the venue struggled to generate sufficient revenue, and shortly after it opened, Randy Parton, the brother of Dolly Parton, was removed from his position, and it was renamed the Roanoke Rapids Theatre.
The city assumed full responsibility for operating the theater.
Under tax increment financing, a public economic development investment is supposed to improve the value of the surrounding property, and the incremental increase in property tax collections is then used to repay the borrowed money.
Roanoke Rapids officials planned for the increased property tax revenue to be only a reserve and expected theater revenues to cover most of the cost.
However, the project essentially failed leaving the city with debt to retire and little revenue to do so.
Currently, the city is leasing the theater, which is being used for various entertainment activities such as concerts, variety shows, and festivals.
The city owes approximately $11 million on the theater and has an annual debt service of $952,000.