Last updated: November 1, 2022
Why have you given up?
Novato Theater made progress on its goals through 2018 but the last 4 years have been impacted by many factors that have affected the philanthropic environment of Marin, most notably COVID-19 but also other priorities such as fire protection and homelessness. No path could be found to gain the funds necessary to continue and existing funds were exhausted.
Why didn’t you get a bank loan?
Banks require collateral against a loan. Novato Theater could not provide that and was unable to secure third parties to guarantee a loan. Also without any operating revenue, typical business loans were off the table.
Could the City of Novato have backed a loan?
That was a possibility, but as this issue was raised publicly it quickly became a polarizing one among the Council members and the public. No consensus could be reached.
Why was there no success in attracting one of Marin’s many nonprofit philanthropic foundations to participate?
We believe Novato Theater met the criteria to qualify for such an investment by a number of organizations, but we faced stiff competition for funds and were unsuccessful in becoming a priority.
Did the huge government spending to mitigate the economic effects of COVID-19 present any opportunities?
While the government did recognize the arts as needing support during the pandemic, its focus was on maintaining existing arts operations, not building theaters for the future.
Did Marin School of the Arts’ decision to build its own theater impact Novato Theater’s efforts?
MSA’s needs and Novato Theater’s aims were quite different, one being an on-campus learning environment for students and the other a downtown community arts and entertainment center. The same can be said for San Marin High and the development of its performing arts building. We maintained good relationships with the Novato Unified School District throughout and could envision students supporting Novato Theater with their efforts. However, given that MSA and San Marin also needed to raise money from the public, we were competing for limited dollars for similar causes. Today we congratulate both MSA and San Marin High on their beautiful theaters.
Could another group take over this project and see it through?
A new group would be raising money from scratch. Unless it was able to secure commitments from somewhere else going in, a new group would face the same environment and issues. Despite some social media chatter a few years ago, no one has approached the Novato Theater Board with a credible plan. It would take a benefactor emerging with a $4 million check to make the project viable.
How much money was raised and would have been needed to complete the project?
Approximately $2 million was raised since the start of this effort. An additional $4 million was needed to complete full construction and fund initial operations.
What was the money spent on?
The bulk of the money was spent on acquiring the property, designing the theater, gaining planning permission and building approval along with the phase one of construction, which encompassed the demolition of the building and reconstruction of the foundation.
Why was the old building gutted?
The theater, which opened in 1946, was not only structurally unsound but non-compliant with modern building codes and the American Disabilities Act (ADA). It was demolished for the sake of public safety and equal access to all patrons. Following the demolition, the next phase was building a new foundation with all the required modern services for power, water, sewer, and fire protections. Our work was halted after completion of the foundation as we sought a loan and more donors.
Will donors get their money back?
No and that’s a decision out of our hands. It is illegal for a 501(c)3 non-profit such as Novato Theater to return money to donors.
How many donors were there and who were the biggest contributors?
The biggest donors were the City of Novato, the County of Marin, the Margaret E. Haas Fund and an anonymous donor. After that the biggest donors were Novato Theater board members past and present.
If Novato Theater has no money, is it bankrupt?
No, Novato Theater is still in good standing as a 501(c)3 and is current with its liabilities. This has been achieved by taking on sufficient debt to ensure Novato Theater meets all of its obligations through its dissolution process.
How did Novato Theater secure debt to avoid total collapse and how much is it? You’ve said the banks were unreceptive?
The debt is $40,000 from a concerned local company and was secured by the property. It will be repaid as part of the dissolution process which involves selling the property.
What is Novato Theater required to do next?
In dissolving a 501(c)3 it is obliged to liquidate all of its assets, pay whatever liabilities it has, then distribute the remaining funds to other non-profits as closely related to the original cause as realistically feasible. The key asset is the property at 924 Grant Avenue.
Could the City of Novato have done more?
The City was a participant throughout. The City sold the property to Novato Theater in 2012 at a big discount justified by the deed restrictions imposed on the property. It also donated to the phase one construction and was prepared to contribute more if the rest of the funds were secured, which they weren’t. Given the current financial strains on the City further participation is unlikely.
Can you explain the deed restrictions?
When the City of Novato sold the property to Novato Theater it did so at a discount justified by placing usage restrictions on the property. Those restrictions limit the use of the property to being a theater. Novato Theater is working with the City to lift those restrictions to enable the sale of the property.