The Durant City Council gave the funding plan for a new theater two thumbs down Tuesday night.

The $500,000 loan, approved that morning by the Durant Industrial Authority, would include two parts — $250,000 for 25 years at zero interest paid back monthly and a $250,000 loan that is forgiven if theater ticket sales reach 100,000 per each of the first 10 years. That number of ticket sales would generate sales of $700,000 and provide Durant sales tax value of $31,000 annually.

Officials with B&B Theatres and Rupe Development, who are on the project, attended the council meeting.

Council members first questioned whether they had the authority to approve the DIA’s action, since the loan will come from DIA economic development funds.

City Attorney Pat Phelps said, in essence, the money is still public money and the council should vote on the matter.

Vice Mayor Tom Marcum spoke in opposition to the DIA’s loan.

“We have the best economic development in town, but I’m a little perplexed,” he said, adding that the large loan is a radical departure for the DIA.

Marcum said the group has never given loan funds to for-profit private retail groups in the past unless they brought a large number of jobs and sales tax value, and $31,000 annually is less than three-tenths of one percent total sales tax.

Marcum said he has spoken to other officials and businesses that have B&B Theatres in their cities and they reported that the economic results were not quite as good as what they expected.

Marcum is not against the new theater coming to town. “I’ll be the biggest supporter and probably the biggest patron,” he said, but he does not approve of the $500,000 loan.

The new theater, if approved, would be located on a 4.2 acre site south of University Boulevard and would have an estimated investment of $4.5 million for land, building and equipment. The new theater would have eight screens, with the largest seating 238 patrons and the smallest seating a little under 100.

If the theater were going to be placed in an economically depressed area, Marcum said he could understand the investment, but it will be on perhaps the most sought-after property in Durant.

“It’s negligible,” he said, adding that the DIA and council told Lowe’s and hotels “no” when they asked for money.

“We have never chosen economic development funds for entertainment venues,” Marcum said. However, public funds have been given to not-for-profit venues.

“This is unprecedented in Durant,” he said, adding that the city is on a slippery slope when the business loan is approved. “How do we answer to other businesses [seeking loans]?”

Marcum said that Durant has experienced some leakage of movie patrons south of the river, but “this isn’t Sherman.” Durant has less people and cannot completely beat Sherman and Grayson County.

“It’s not going to be the boon that we expect it to be,” Marcum said, adding “I hope I’m wrong.”

“The fact remains, this is a radical departure [for the DIA],” Marcum said.

Council member Bobby Story made a motion to approve the DIA’s decision. When a second was not forthcoming, Mayor Jerry Tomlinson, looking surprised, seconded the motion himself, then opened the topic back up for discussion.

Council member Dr. Jerry Polson said he would love to see a new theater come to Durant, but he agrees with Marcum.

“Where do you stop?” he said, adding that he sees the movie theater as more of a retail business than an entertainment venue.

Marcum said the $500,000 is economic development money that could be saved and used for something else.

Tommy Kramer, executive director of the DIA, said B&B Theatres approached the city in 2007, saying they had surveyed the market and saw the leakage of movie patrons that Durant was experiencing.

He said research has shown that entertainment venues are places families can enjoy and that they support local businesses.

“We’ve done our homework,” Kramer said, adding that B&B Theatres, an 85-year-old company, has never closed a theater and is the 20th largest theater company in the U.S.

“We don’t know what this (the theater) will bring, but I assure you, it’s positive,” he said.

Kramer emphasized that half of the loan is performance-based and that the loan isn’t a gift but rather an effort to provide a vehicle to help finance the business.

Council member Leon Sherrer asked if the theater company would be open to paying the full loan amount, without having a forgiven component.

Kramer said he could ask, but he didn’t want to speak for the company. He added that the loan was approved on the basis that it is subject to a bankable loan.

John Rupe Sr. with Rupe Development will seek a loan with First United Bank being the lead bank and wants other Durant banks to participate in the loan. Rural Enterprises would package the business loan with a SBA-504 loan program with the local banks.

Rene Lemons, general manager of the Durant Twin Cinema and Bowling Center, spoke in dissent of the DIA’s decision Tuesday morning, saying that Jerry and Ann Wann did not receive funding from the city to open the theater in 1993 and that the new theater should likewise not receive any loans.

She said the the loan proposal for the company is like a “stab in the back.”

Later after the council discussion, Lemons said everyone discussed the new theater as if “we don’t exist,” like the city “doesn’t have one to begin with.”

Wann’s daughter-in-law Michelle Wann, who used to work at the Durant theater, said the Durant Twin Cinema has been family-owned and operated for 17 years and they do not intend to close.

The new 23,000-square-foot theater would have an art-deco exterior facade of EIFS veneer on three sides, front exterior neon lighting to look like the Hollywood theater design and large rocker chairs in all eight theaters with digital projection equipment.

Sonic Equipment Company, headquartered in Iola, Kan., sells and services equipment for the movie theatre industry.

“It’s possible there are more negotiations to be done,” Story said, and that he would withdraw his motion if the DIA would give the funding more consideration.

Kramer and Tomlinson agreed. No action was taken after Tomlinson withdrew his second and Story withdrew his motion.