Roanoke Rapids City Council Monday accepted a $1.75 million cash offer from a New Jersey company to buy the theater.
The 4-1 decision to accept the offer from Victor Freeman of the Parsippany-based The Victor Enterprises Company means there will be no auction through the GovDeals website to sell the venue.
Freeman’s offer to buy the theater was submitted on Monday — the day the council during a special called meeting was scheduled to consider a $1.5 million offer from a group including Weldon Mills Properties.
The decision to accept The Victor Enterprises offer came after lengthy discussion and a fine-tuning of Councilman Carl Ferebee’s motion, which also included wording to cancel the online auction scheduled to begin Thursday morning and end on June 26. Councilman Wayne Smith voted against the motion, saying he wanted more time to study the last-minute offer and the company which submitted it. Ferebee, Sandra Bryant, Tommy Daughtry and Rex Stainback voted in favor of the motion.
A 10-day upset bid period will begin once The Victor Enterprises makes a deposit on its offer, City Attorney Geoffrey Davis said, explaining the council still has the right to accept or reject all offers.
According to the proposal, upon acceptance of the letter of intent, The Victor Enterprises will make a $25,000 non-refundable deposit to the city. The company plans to make an additional deposit following an inspection period which will not exceed 10 percent of the purchase price.
Freeman is no stranger to the theater, City Manager Kelly Traynham said following the meeting. He had proffered a previous proposal to buy the venue through a financing agreement which was not accepted and has toured the facility.
Freeman is also renovating the former BB&T building in Weldon, a source familiar with his interest in the venue said.
The proposal does not mention specific plans for the theater.
Before Ferebee made his motion to accept the offer on a second by Bryant, the council had spent just over an hour-and-a-half discussing the Freeman offer, the GovDeals auction and the $1.5 million offer submitted by Weldon Mills Properties.
The council then spent slightly more than 20 minutes discussing and fine-tuning Ferebee’s motion.
During the discussion of the motion, Smith said, “We need to ask the council if anybody on the council knows anything about Victor Enterprises. I had asked that we postpone this until June 6 so we could look up and find out something about Victor Enterprises. I don’t know anything about them. I don’t know anything about the gentleman who says he owns it. I would like the opportunity, being a council member, to find out what type of business this is before we get into a resolution.”
Mayor Emery Doughtie, responding to Smith, said, “I know we’re taxed with doing the best job we can for the citizens in trying to receive the highest bid. We also have an interest in the concept of what the theater was supposed to be when it came. It was supposed to be an anchor for other businesses that would come around it.”
Doughtie said of the offer, “This is a lot of money. It doesn’t look like a lot of money when you pay $14 million to $15 million for a piece of property and a building and you’re selling it for a considerably less amount. It’s still a lot of money and I have no reason to believe a contract (would not) be deemed and in a professional way. On the other hand we have quite a few people who seem interested in the property. We’ve researched everybody else that offered to do anything.”
Ferebee said he believed the $1.5 million that was offered by Weldon Mills Properties and contingent on the council not moving forward with the auction was a stronghold.
While Stainback said he was not against getting more information on the group, he did support the $1.75 million offer.
“Even if we accept this tonight, because of the upset bid process, and whatever comes out of that upset bid process, whether there are no upset bids that come in and this is the final offer so to speak or whether there are upset bids, it still has to come back in front of council for council to accept or reject all bids,” Davis said. “So the council gets an opportunity sometime down the road to truly accept this and confirm the sale.”
Jim Stewart of GovDeals told the council he believed the reason they had two cash offers was through the influence of the auction website. “You’ve got just two offers. I know they sound good but wouldn’t you like to have five or 10 offers? I would submit, give the process a chance and run it through that for the next 34 days, have them put their bids on there and we can drive that price up.”
Bryant said, “This has been quite a process. This is my first term going through dealing with the theater.”
While she said she liked what GovDeals has done, she added, “I’m very pleased there’s been some interest but I also think back to what my grandmother always said to me — ‘a bird in the hand is worth two in the bush.’ We’ve already got an offer of $1.75. Do we know we’re going to get that or more? If it’s not more, why would we take it?”
Stainback said if the auction didn’t reach $1.75 million and “we’re not able to take one of these two offers we’re going to be looking not real smart. If it was my theater … I would take the offer of $1.75 myself. It’s still subject to an upset bid. I would hate mighty bad if we walked out of here with no decision. I feel like it was a bad investment many years ago and I think tonight we’ve been offered way more than the first two offers generated. I would certainly accept that (the $1.75 million) and see what happens in the upset bid process.”
The city still has $7,638,760 in debt to pay on the series A bond.
