Ocean City Theater Company

Mike Allegretto reached out to me to advice of an item that will be on the agenda for the upcoming city council meeting on March 11, 2021. This meeting will be open to the public and will be held at the high school auditorium. 

The agenda item deals with the Ocean City Theater Company and the renewal of their agreement for use of the city owned building at 15th and West Avenue.

The lease agreement is for an initial period of 5 years with the possibility of two 5 year extensions, if parties agree to execute the extensions. Apparently, the initial lease agreement expired around 1.5 years ago, so we are well into the initial lease period of 5 years.

Been advised that there are some minor changes to the lease agreement, of which the most significant change concerns utilities. Under the new lease agreement, the city will be responsible for payment of utilities for the building, whereas, under the old lease agreement, the theater company was financially responsible for payment of utilities.

In addition, mainly as a result of COVID-19, the theater company is in arrears on their utility payments in the amount of approximately $30,000. Since the onset of COVID-19, the theater company has been unable to generate any meaningful revenue and their major source of revenue, the summer Broadway shows, has been shut down due to pandemic related restrictions. As a result, the city will pay for any outstanding utility charges the organization has due to their inability to generate revenue.

Based on my governmental experience, it is common place for local governments to subsidize community organizations, especially those organizations that benefit the youth. Recreation facilities and athletic fields used by such organizations like little league baseball, Pop Warner football along with softball and basketball leagues are most often under the control of local governments and the cost to operate and maintain those facilities are paid for by the local taxpayer. The only difference here is that it is a building versus an outdoor facility or gym; regardless same concept.

Mike Allegretto told me that the last time this lease agreement was approved many years ago that there was some pushback from the public, so he just wanted to provide FIT with advance notice along with the opportunity to ask any questions. My only recommendation was to make sure that the theater company applied for any COVID-19 related grants or financial assistance programs to help with offsetting the revenue loss, which will continue well into 2021, and develop a robust working relationship with the Ocean City Free Public Library so that sponsorships can be established to help with funding efforts. The theater company already has a strong working relationship with the schools.

Thanks — Dave

David Breeden, President

Ocean City Fairness in Taxes

 

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