City supports loan for Maya Cinemas project
By Andrew Edwards
SAN BERNARDINO -- Economic development officials are poised to help Maya Cinemas get a loan from Uncle Sam to finance the company's downtown theater project.
Maya Cinemas, based in Los Angeles, is the San Bernardino Economic Development Agency's hope to develop a sequel to CinemaStar, whose downtown theater business did a fade to black in September.
The 20-screen theater, at the corner of Fourth and E streets, has been a husk since CinemaStar failed.
The City Council voted Monday night to ask the U.S. Department of Housing and Urban Development for a $9 million loan to help Maya Cinemas accomplish its plans.
Maya is expected to purchase the theater site from the EDA and refurbish the property. Maya has promised to add an IMAX screen to the theater, and the firm is also planning commercial development near the cinema.
Maya Cinemas chief executive Moctesuma Esparza said Wednesday that the theater could open 60 to 90 days after financing becomes available.
The financing decision required council members to judge whether it's riskier for San Bernardino to allow a big cinema building to remain vacant or to guarantee millions in new debt. The council voted 6-1 in favor of vouching for Maya Cinemas.
"I'm hoping that we are successful ... all we can do is try," Estrada said Wednesday.
"There's a little bit of concern but the downtown does need those theaters," added Estrada, whose ward includes downtown.
Seventh Ward Councilwoman Wendy McCammack cast the sole vote against the financing plan.
She said Wednesday that she doesn't favor the city's guarantee of "a $9 million loan to a company that said they didn't need a dime of city subsidies."
"I understand that (economic) circumstances have changed, but that's still a difficult sale for this councilwoman," she continued.
But Esparza said changing economic circumstances are the very reason Maya is asking the government for help.
"That was before the credit crash," he said.
One reason for concern is that the loan would be made against San Bernardino's future allotments of federal Community Development Block Grants.
The U.S. Department of Housing and Urban Development manages both the Block Grants the Section 108 Loan Guarantee Program, which is the mechanism that could be used to help finance Maya Cinema's downtown project.
Block Grant funds can be used to finance a variety of local projects and are often disbursed to nonprofits that serve the needy.
The council-approved plan requires Maya to repay the loan in seven years. If Maya defaults, the EDA would repossess the theater site and assume the obligation to pay the balance of the Section 108 loan.
The city would not lose its ability to receive Block Grants as long as Maya Cinemas or the EDA can make loan payments, according to the Agency.
Interim EDA director Emil Marzullo said during Monday's meeting that he anticipates Maya will have a cinema operating downtown by the end of 2009.
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Andrew Edwards. E-mail Andrew here.
The City of San Bernardino has demonstrated time and again it can not manage it’s own finances allowing it to pass their yearly budget. They must keep this theater at arms length away and let whomever is interested in it secure the necessary funding to open and keep it running. The City tried and failed to attract the levels of attendance to make it to the break even point. Focus should be on the 2010 budget which is now only 60+ days away of needing a passable budget. We must not undergo any more layoffs to balance this next budget. They do not need to be distracted by this money pit that will continue to be a liability until downtown undergoes major changes and the residents feel safe to return to downtown after dark. Let Councilwoman Estrada underwrite the $9,000,000 loan if she likes (I believe it is in her Ward) but the City does not have the money or other resources to be involved.
Big Deal.....the theatre only has to produce $1,285,715 each ear for the next 7 years to break even and then the cash just comes rolling in. Whoooo Hooo the bucks will be raining from heaven. I can't believe this Mayor and most of the Council members' talent hasn't been harnessed by Tim Geitner yet....they could teach the Obama Administration a thing or two about World Economics.
Concerned and Unbelievable,
Right on!
The City cannot manage it's own money and RDA and EDA are not business minded. Their job is to spend money and Business is there to "MAKE MONEY"!
The yo yos at city hall, need to stay out of the business world and provide the basics to it's citizens. Forget getting involved with business deals they have no common sense in handling.
RDA and EDA are among the biggest land owners in the area and no taxes are collected from government properties, especially if they are lying dormant.
Downtown area is the best example of city government, trying to run a business and failing miserably.
Just sell the properties to tax-earning, tax-paying capitalists, who without some government guarantee, will have to succeed and will stay the course! Of course the greed of user fees and permits by the city will have to become more business freindly.
Stop using the treasury to keep the downtown indebted to taxpayer money and grants so the city can go about the job description of providing just the basics.
There is plenty of income for the city to provide basic services, if they get out of the "GIMMEE'S AND FAVORITE CHARITABLE HANDOUTS OR PROGRAMS LIKE OP-PHOENIX!
Stop sticking the taxpayers with failed , micro-managed RDA/EDA goof ups and "pie-in-the -sky" unobtainable "PIPE-DREAMS".
The ongoing administrations and councils, have only them selves to blame for this continuing SNAFU!