The fate of the Paramount Theatre state funding request is still unknown, at least as far as the city of Austin is concerned.

Tuesday, October 19, 1999

The fate of the Paramount Theatre state funding request is still unknown, at least as far as the city of Austin is concerned. Austin City Council members delayed a vote on acquiring the Paramount until a special council/finance committee meeting could be held on Oct. 25. The Austin Area Commission for the Arts (AACA) had requested that the city purchase the building – more as a formality – to facilitate a request by the AACA for $550,000 in state funds from the 2000 bonding bill.

"It was just too much money to go out without having a full council discussion," director of administrative services Tom Dankert said, referring to the matching funds the state funding would require from the city. "The way we had outlined the deal, it would have been a $550,000 loan at 0 percent interest paid back over 10 to 15 years."

Dankert pointed to other factors in the delay, like the fact that the AACA board is scheduled to meet at 7 p.m. tonight, and the city council didn’t want to vote on something the board hadn’t themselves approved.

The council has to make a decision in favor of purchasing the Paramount – for the proposed $1 – by Nov. 1 if the state funding request is to go through. The ownership change is necessary, AACA president Janet Anderson explained Monday, because a facility has to be owned by a government agency in order to qualify for any funding from the state bonding bill.

City administrator Pat McGarvey pointed out another possible sticking point: the city’s ownership of the Paramount. While plans were for the city to own the historic theater in name only, leaving the Paramount group to administer and run the building and activities and to eventually buy back the building after paying back the matching funds, the state might not approve, McGarvey explained.

"If you (a government institution) sell a building back – one that has benefited from a state bonding bill – under current law, it’s my understanding that the state would only approve the sale if they get their money back," McGarvey said. "That would mean the building would most likely have to go at fair market value. That wasn’t part of the original plan."

Anderson also stressed that the ownership change was contingent on state approval of the funding, which she called "a long shot" at best.

Anderson was unavailable for comment after the council meeting.

In other business, the council:

– approved the appointment of James Sheehan to the Library Board. Sheehan replaces Jeff Ettinger, who was also recently appointed to the Library Board, and subsequently transferred to Willmar. Sheehan is the treasurer of the Hormel Company.

– appointed Mayor Bonnie Rietz to the Fire Committee until the council selects a replacement for former council member Roberto Romo, who recently resigned for personal reasons, and until committees for 2000 are determined.

– passed a resolution in support of the Nov. 2 Austin School District Referendum.

– approved the appointment of 2nd Ward council member Todd Penske to the Housing and Redevelopment Authority Board.