City leasing theater for $1 a year
The Odessa City Council approved a lease agreement between themselves and Ector Theatre, LLC last week, giving the leasers the theater space at an annual rental cost of $1.
Ector Theatre, LLC is controlled by local investors Toby and Sondra Eoff, who are part of a larger movement to revitalize downtown, including investing in the creation of the Marriott Hotel & Convention Center downtown. The lease itself lasts for 30 years, and provides the city with six nights a year to use the facility free of charge.
Assistant City Manager Phillip Urrutia said the lease does set the rental cost at $1 a year, but that the Eoffs would be responsible for paying for utilities and maintenance of the facility.
“They’re essentially going to be responsible for all costs for the theater after it’s opened,” Urrutia said.
The renovation project has been costly. Council members first paid an estimated $800,000 for design and management of the project to San Antonio-based Killis Almond in the summer of 2017, and in May of 2018, council members approved renovation costs of about $10.8 million for the building, nearly double the projected cost.
So will the city be able to earn back the costs of the investment? Urrutia said the city will recoup the funds through the additional hotel/motel tax revenue that will be brought to the city once the hotel and convention center is opened and that other tax boosts from downtown revitalization should also be realized.
“Overall, we feel that this project will be a catalyst for further development in the city, so that could be property tax downtown,” Urrutia said.
Urrutia gave an example of Torchy’s Tacos, a new restaurant under construction downtown, which he said means even more sales tax coming to the city. The city has already seen high sales tax returns for several months now amidst the ongoing oil boom, collecting more than $12 million in sales tax revenue since the beginning of 2019, about $5.4 million than they received this time last year.
Not every council member was on board with the lease agreement. District 1 Council Member Malcolm Hamilton was the only council member to vote against the lease, and At-Large Council Member Peggy Dean abstained. Hamilton said at the time he had questions and concerns regarding the agreement, and has previously argued for scaling back or scrapping the project altogether, saying the money could be put to better use. Hamilton did not respond to a request for comment.
The lease agreement also has a termination clause, allowing the city to terminate the contract should Ector Theatre, LLC default. Renovations of the theater are expected to be complete by November.