SOUTH ORANGE, NJ – The Board of Trustees will vote tonight on a proposal to take over ownership of the South Orange Performing Arts Center building.
At its special meeting, which begins at 8 p.m. at Village Hall, trustees will consider an ordinance introduced on May 29 that transfers ownership of the building and releases the nonprofit SOPAC from the debt that, according to a news release on the village website, “is by all accounts, an uncollectable debt/receivable.”
The original agreement called for SOPAC to initially lease the building and to make payments to the Village to cover the cost of construction, which had been underwritten by South Orange through bonds it had issued. According to the release, the cost to build SOPAC was approximately $15 million. The village has paid down the debt to approximately $11 million but has received no repayment from SOPAC.
Under the new arrangement, SOPAC will continue to lease the building and be responsible for its maintenance. It will continue to collect the rents from the movie theater, approximately $200,000 a year. After five years, that rent money will revert to the village. In addition, based on the assumption that SOPAC improves its financial condition, the village will discontinue its operating subsidy, currently $239,500 a year. That could happen as soon as three years from now.
“To be clear, this will not increase anyone’s taxes,” according to information in the news release. “More importantly, as SOPAC succeeds … there will be a significant and positive financial impact to the village which will provide relief and stability for future budgets, controlling and limiting future tax increases.”
There will be a public hearing on the proposal before the trustees vote.