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Check the URL for errors.The Unified Government Commission tonight gave its permission to allow the UG administrator to offer The Legends 14 Theatres for sale.
According to a resolution approved tonight, the theater is being offered to Red Legacy for $8.8 million for the property.
Currently the theater, owned by the UG, is under the management of Phoenix Theatres. According to UG officials, the UG would have to pay a $1 million breakup fee if it sells the theater to a third party.
The anticipated sale price of $8.8 million would be expected to cover the costs, according to UG officials. Closing would be expected to take place in four to five months, officials said. The UG expects to have an estimated balance in its favor of $255,000 after the sale takes place, according to figures presented by Lew Levin, UG chief financial officer.
In a unanimous vote, the commission voted to allow the UG administrator to offer the 10-year-old theater for sale. The UG owns the 8.6 acres, the theater building and the theater equipment.
A supplemental agreement specifies that Red Legacy will have the right of first offer for the sale of the theater.
Red Legacy will have 20 days to accept the UG’s terms and enter into an agreement, or to waive its right of first offer, according to UG documents. Red Legacy also will have the right of first refusal to buy the theater if the UG offers it to some other third party other than Phoenix for use as something other than a theater.
According to figures prepared by Levin, there is a $300,000 debt listed as property taxes for the theater. An executive summary the UG prepared for this project stated that the theater is behind on its property tax payments. The property taxes are paid with operating revenues from the theater and Phoenix is not required to put in Phoenix’s private money to pay tax shortfalls under this current management agreement, according to the executive summary. The UG likely will have to bring the property taxes current at closing with a portion of the proceeds from the sale, according to the executive summary.
UG Administrator Doug Bach said it was never the UG’s intent to own a movie theater. In 2004, there was a private theater lined up for The Legends Outlet development, but that project did not go forward. Since there was a public demand from the community, which did not have a large movie theater, the UG decided to build a theater. The UG did not have to subsidize the theater with any public funds during these 10 years, he said.
“Phoenix has been an outstanding operator for us of this theater,” Bach said. “Over the years, they have served our community and served this theater well.”
Marlon Goff, of the UG economic development department, said the Legends 14 Theatres are doing very well in the Kansas City area market. They are consistently in sixth to eighth place among more than 30 theaters in the Greater Kansas City area.
The Legends 14 Theatres has a 129,000-square-foot building with 14 screens and just under 3,000 seats on an 8.6-acre site, Goff said. It includes a lounge and balcony area, with two rooms used for birthday parties.
Bach said the UG is working on some restrictions to the sale that would keep the building as a movie theater, as suggested by Commissioner Gayle Townsend at a committee meeting.
If the theater is sold to a third party, Phoenix would be entitled to a $1 million breakup fee, according to Todd Lasala, an attorney working with the UG. The $1 million would be built into the sale price. There would be a 120-day period to terminate the agreement. After giving Phoenix notice, they have 30 days to let the UG know of transitional costs, according to Lasala. Then the UG has 45 days to make a decision to go forward, he said. The buyer would be asked to put $1 million in escrow so the UG would be covered in case the sale falls through, he said.
In other action tonight, the UG Commission approved a resolution of intent to have a public hearing to issue $18 million in industrial revenue bonds for NPIF2 Kansas Avenue, LLC. The project is at 5100 Kansas Ave. Commercial buildings would be renovated and there would be an addition of 50 new jobs, according to UG information.
Also approved was a special use permit application from Ben Barreth for Homes for Hackers LLC, to allow up to five individuals to operate businesses out of the home at 4428 State Line Road. Several people spoke at a public hearing on this application. Some of the neighbors said that while they approved of it for this particular location, they did not necessarily support other businesses operating out of residences.
The commission also went into a closed session tonight to discuss labor negotiations and security.