Catalina Raises Concerns about Paramount Operators
Peekskill Mayor Frank Catalina asserted last week the city’s historic Paramount Hudson Valley theater was “a leaking siv” that had him worried about the ability of the current management group to viably operate it.
After analyzing a spreadsheet of expenses to the city over the last 10 years, Catalina maintained he was alarmed by the more than $257,000 price tag the Paramount cost Peekskill in 2013 and urged the Common Council to start thinking about a “plan B” if Red House Entertainment was unable to fulfill its obligations under a 17-year contract it signed with the city in May of last year.
“It seems like these expenses have just exploded in the last year and they weren’t open for a full year,” Catalina said. “I’m not going to sit back until they turn in the keys and say the heck with it. I have real concerns about this group. I am concerned because they have been dark for a number of weeks in January and two weeks in February. It doesn’t look like we’ll be anywhere near those rosy projections.”
Under the lease agreement, Peekskill was guaranteed 5% of ticket sales at the former Paramount Center for the Arts on Brown Street. Red House has projected gross ticket sales of $900,000 in the first year (October 2013 to October 2014) and $2.2 million annually thereafter. The agreement includes a 10-year option, and Peekskill paying for utilities for the first six months.
Catalina conceded 2013 was not a good year to judge the finances of the Paramount, which is listed on the National Register of Historic Places, since Red House only was in charge for a short time, but he said the city only receiving $1,229 for the entire year was eyebrow raising.
He also questioned the staying power of Red House due to their efforts to seek $1 million from investors. In offering documents outlined by Red House at the end of August, the Garrison-based company stated it had a goal of raising $500,000 by the end 2013 and $500,000 in 2014. The proceeds will be held in escrow until at least $250,000 has been raised, at which point Red House may access the funds.
“When they sent out a prospective for $1 million it means to me they’re in big, serious trouble or the city made a really bad deal,” Catalina said. “I don’t want the city to be dark for eight months if and when they fail.”
The principals of Red House Entertainment, which took over the Paramount last July, said in November it was understood from the onset that it would be looking for financial backers.
Red House projected losing almost $230,000 in 2013, but is looking to bounce back in 2014 with a profit of more than $65,000 and more than $767,000 in 2015. Its website shows a full schedule of shows every weekend starting this week.
Red House, which has never run a theater such as the Paramount, was selected by the Common Council over two other entities, the Tarrytown Music Hall and the Paramount Phoenix Group. Red House has 50 employees and has been involved in many large events, including the Super Bowl and the Olympics.
“I’m just excited to hear people talking about it again,” Deputy Mayor Drew Claxton commented about the Paramount. “It may not be everything we want it to be at this very second but in a very short nine months they have pulled in some shows and pulled in some houses. I’m just really glad that shows are showing up, honestly.”
Claxton and Councilwoman Kathleen Talbot said it was premature to cast a shadow over Red House since they haven’t been given a full year yet to show their stuff, but Councilman Vincent Vesce maintained it was clear Red House was not living up to its end of the bargain with the city.
“We have an operator in there who is not meeting the expectations of its lease and what they presented in their RFP,” Vesce said. “(The Paramount) is one of the largest economic drivers of this city. We need somebody in there that can produce.”
Reportedly, Catalina was able to avoid an auction of lighting and other equipment that Red House inherited at the Paramount by negotiating a deal with Key Bank. He also is hoping to reach a settlement with a property owner to allow access to the backstage of the theater behind the Paramount East building.
Rick has more than 40 years’ experience covering local news in Westchester and Putnam counties, running the gamut from politics and crime to sports and human interest. He has been an editor at Examiner Media since 2012. Read more from Rick’s editor-author bio here. Read Rick’s work here: https://www.theexaminernews.com/author/pezzullo_rick-writer/