Bid on PenMar Theatre seats

Photo: City of Penticton

Not-too-distant memories of a deal that looked good on the books but went awry for Penticton City Hall were pulled from the books on Tuesday. During a council meeting, the city considered how best to hock some theatre equipment it never wanted to possess in the first place.

Part of a December 2013 deal when the City of Penticton lent the PenMar Community Arts Society $125,000 to purchase equipment – chief among them, theatre seats and projectors – was that the equipment would be city property if the society failed to repay.

“The funds were supposed to be strictly for those assets, so the fact that they spent 10 or 11 grand on electrical upgrades sort of deviated from … what was written in our agreement,” Mayor Andrew Jakubeit said.

City hall’s finance chief Jim Bauer presented to council on the matter on Tuesday, noting that of that $125,000, just shy of $63,000 was doled out to the society, which was to pay the loan back over seven years – interest-free for the first five. That never happened.

With the Many Hats Theatre expressing interest in buying 112 of the 310 seats and another bidder interested in all of the seats, council ordered staff to seek out the highest return from selling off the equipment. But with the equipment going used, although effectively brand new, Jakubeit doesn’t expect to get the whole $63,000 back.

“Realistically, I think if you can get 50 cents to the dollar, you would be doing well,” Jakubeit said. “What we’re trying to do is get some value out of it, instead of just, essentially just giving it away for free.”

But while the city is ultimately coming out with a loss on that equipment, Jakubeit skirted around calling the loan a mistake.

“In fairness, there was a fair bit of community support and momentum,” Jakubeit said. “You had another prominent business across the street wanting to ... put their support behind it, there were other community groups coming to put some money on it.

“The city wanted to, we added an amenity fund in support of the arts, we felt it was a worthwhile cause. So, moving forward, yeah, certainly there will be more scrutinizing of whatever application comes.”

In fact, most investments into the arts carry the risk of coming out at a loss, according to city boss Peter Weeber.

“Would that prevent council from investing in the arts then and now and in the future,... to say no to every possible ask is not practical,” Weeber said, adding that council has directed staff to set up a new program to help decide how to invest in various arts programs. “(It) will better define risk and eligibility of projects as they come up, like this project.”

On the other hand, Coun. Judy Sentes pointed to some successful arts investments the city has made in recent years, including the Shatford Centre, Oktoberfest and Lobster Fest.

An architect is also owed money from the society, though it’s not clear how much.