Although some Durant City Council members may have questions regarding a Durant Industrial Authority loan for a proposed new theater, the project is continuing as planned, due to a recent ruling from City Attorney Pat Phelps.

On March 9, the DIA approved a $500,000 loan, which 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, which would generate sales of $700,000 and provide Durant sales tax value of $31,000 annually.

The new state-of-the-art theater, which would be located on a 4.2 acre site south of University, will have an estimated investment of $4.5 million for land, building and equipment.

In a March 9 Durant City Council meeting, council members tabled the matter and asked the DIA to reevaluate the loan agreement with B&B Theatres and Rupe Development.

In a message to Tommy Kramer, executive director of the DIA, Phelps wrote on March 10 that he reviewed the DIA trust indenture and its supplements and “conversed with other Oklahoma lawyers who deal solely in the field of public finances.”

According to the message, the trust indenture allows the DIA “to provide funds for the cost of financing, refinancing, acquiring, constructing or purchasing” properties for the purpose of economic development.

Thus, a motion by the city council is not necessary in order to pursue the loan agreement. If the ruling had been required, the DIA would have honored the council’s opinion either way, Durant Mayor Jerry Tomlinson said.

The attorney’s opinion about the necessity of the vote would have been preferred before the council meeting because it would have eliminated confusion among the council members, Tomlinson said. During the meeting, council member Bobby Story asked many times if the council even needed to make a ruling on the DIA’s decision.

During the council meeting, Vice Mayor Tom Marcum said the large loan is unprecedented because the DIA 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.

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

Kramer spoke to the council, saying that the loan was approved on the basis that it is subject to a bankable loan.

John Rupe Sr. with Rupe Development is seeking 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.

Tomlinson said the theater group is still working with local banks on the finance end of the project. Once that process is complete, the bank loans will be a basis for the DIA loan.

Approximately $4 million of the funds will come from financial institutions. The finances could be completed in several weeks, Tomlinson said.

In regards to the $500,000 DIA loan, Tomlinson said he would not describe the amount as “big,” but rather the amount necessary to make the project a viable option for everyone involved.

Other theater groups have not been interested in coming to the Durant area, Tomlinson said, and B&B Theatres is the 20th largest theater group in the nation.

Kramer said the company has hired professional engineering and architect firms for the project, and final conceptual plans and designs could be complete soon, possibly in 60 days.

Once engineering and design blueprints are complete, they must be brought to city officials to make sure they meet Durant building codes, Kramer said.

The theater company approached the city in 2007, saying they had surveyed the market and saw the leakage of movie patrons that Durant was experiencing, Kramer said.

When asked why the project has taken three years to come to the forefront, Kramer said the occurrence is not uncommon. He worked with Chili’s between five and six years and worked for 10-plus years to bring a new Braum’s to Durant.

Kramer stressed that the funds used for the loan will come from a non-sales tax fund used for economic development projects. More than $500,000 is currently in the account, he said.

The DIA studied and reviewed the funding options for the project and decided that using the economic fund was the best option, Kramer said.

Tomlinson said part of the funds for the account comes from members of the original industrial foundation that was in place before the DIA.

When the DIA was founded in 1964, Kramer said the funds from the foundation were transferred over into a special account, which was to be used for economic development projects.

Kramer said the DIA has waited to use the funds on an economic project Durant citizens would stand behind. Because the DIA was founded 46 years ago, he is unsure if a portion of the funds have been used for past projects.

The new theater is expected to employ 20-25 part-time employees and two to three full-time management positions. It would have eight theaters, with the largest seating 238 patrons and the smallest seating a little under 100.

Tomlinson said citizens have been been excited about the project and he has heard people ask if the theater is still coming to the area.

Kramer said he is unaware of opponents to the project and that the reaction has been overwhelmingly positive. Also, he feels that the theater will have a positive effect on other retail businesses in the community.

“I’ve never seen so much excitement from the citizens about a project [before],” Kramer said.

A new theater has been the No. 1 request from citizens, he said, and additional restaurants is a close second.

Rene Lemons, general manager of the Durant Twin Cinema and Bowling Center, disagrees with the funding plan for the new theater, saying that Jerry and Ann Wann did not receive any financial help from the city when they opened Durant Twin Cinema in 1993.

“The city officials want to give them a loan. Jerry had to do it on his own,” she said at the DIA meeting in March, adding that the loan proposal for the outside company is like a “stab in the back.”

Before the vote, Lemons asked why the Mr. Wann was not approached about upgrading and renovating the Durant Twin Cinema

Addressing the policy question, Kramer said that projects come to the city in a multi-facet of ways and in that the DIA does not approach businesses. Rather, businesses approach them with project ideas.

He said that local businesses are more than welcome to approach the DIA with projects.

The DIA’s job is to improve the workforce in the community and help businesses, Kramer said.