Amy Wise, executive director of Huntingdon County Business and Industry (HCBI), approached Huntingdon Borough’s Community Development committee Tuesday afternoon to request it become part of a loan from the Department of Economic and Community Development (DECD) to assist Dave Peoples in making the necessary changes to the Huntingdon Cinema’s Clifton 5.
“The theater affects a lot of other businesses in the downtown area,” Wise said. “If this business would fail, it would be highly detrimental to those other businesses.”
Wise said Huntingdon County Visitor’s Bureau executive director Matt Price is working with Landmarks Inc. to help raise funds.
“The one thing you must keep in mind is there is no funding required from the borough,” Wise said.
Wise has been working with Clifton 5 owner Dave Peoples since September 2012 when the major motion picture industry announced its films released to theaters would be digitalized, forcing theater owners to switch from 35mm film to digital releases.
The total cost of switching all of the equipment out of all five theaters is approximately $50,000-$60,000 per theater with a final cost analysis of $270,000.
Among the fundraising efforts is the selling of plaques to be placed with the purchaser’s name on the back of seats.
Wise informed council there are three parts to the loan package – the bank component, the HCBI component and the anchor loan and fundraising projects.
When asked by acting chairman Jim Decker what the borough’s role in the loan application would be, Wise said the borough would become the applicant.
“The way this works is the borough is basically borrowing the money from the state, giving it to HCBI, who will give the money to the theater and the theater pays the money back to the borough,” Wise said. “It is basically setting up a revolving loan for the businesses of the borough.”
Wise said what would take place after Peoples began paying back the money to the borough for the loan is the borough would then have the opportunity to redistribute that loan to other downtown businesses.
“HCBI would run the loan through the borough,” Wise said. “There is no application fee for you to pay.”
When asked if there is certain criteria for which a business must use the loan for, Wise said there are three things – a new or renovated building, new machine or equipment costs and the cost of installation and the payment of training employees to run the equipment and working capital funds.
“This is a no brainer to me. We want to keep them here,” council president Dave Quarry said. “There are other businesses in town that are not going to survive without the theater being here. There is no cost to us and we could use the revolving loan to help other businesses.”
Wise said there is a deadline issue. She said Fox/21st Century Studios has changed the deadline from the summer and now theaters must make the changeover by the end of May.
When asked how the collateral would be divided if there would be a default on the loan, Wise said the banks would have first choice and then HCBI would be a shared second choice. It would have to be determined on the collateral of the business and the equipment inside.
“I think this is a building block for our community,” Quarry said.
Acting committee chair Jim Decker suggested Wise have HCBI’s solicitor draw up the necessary paperwork to come back to borough council with an agreement on the loan.
However, borough council member John Gradwell thinks council should go back and discuss the issue further.
“I am not sure of the situation and people coming here in the 11th hour,” Gradwell said. “I think this should go back into the committee to explore our options.”
When asked what options there were for the committee to discuss, Gradwell said he isn’t sure, but thinks borough council should look at other funding.
It was agreed Wise would return to a later meeting with an agreement for the loan.
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