McMinnville officials appear to be jumping through legal hoops for funding Park Theatre restoration. However, the law may have more to say about who operates the facility once complete.
According to Tennessee state law, officials cannot lend the city’s credit to another, that being Park Theatre Group, for renovation. Nor, can the city use tax dollars for renovation and enter into a lease-to-buy agreement with the Park Theatre Group.
Under Section 29, it states “The credit of no county, city or town shall be given or loaned to or in aid of any person, company, association or corporation, except upon an election to be first held by the qualified voters of such county, city or town, and the assent of three-fourths of the votes cast at said election. Nor shall any county, city or town become a stockholder with others in any company, association or corporation except upon a like election, and the assent of a like majority.”
City attorney Tim Pirtle says the legal wording means the city cannot use tax dollars to renovate the building then give it to another organization to operate.
“Any agreement entered by the city is subject to certain laws,” said Pirtle. “Once tax dollars are used for renovation, the city cannot arbitrarily let one entity interested in managing the facility have it.”
Making sure the city abides by the law will be Tennessee Comptroller of the Treasury. The state comptroller is charged with monitoring, auditing, and approving fiscal management, including debt management, for municipalities in Tennessee.
Pirtle and Park Theatre Group representative David Marttala sat down with the comptroller’s attorney to discuss the situation when the city was considering a lease agreement with the Park Theatre Group. The agreement would have allowed the group to lease the property and operate the facility once renovated. After the debt service for renovation is paid in full, the city would sell the property to the group for $1.
Pirtle says officials can enter into a management agreement with a company, association or corporation, but only after it opens the project for bids.
“He told us if the city enters into a management agreement for Park Theatre, it would have to use a competitive bidding process,” Pirtle said.
A bidding process means the Park Theatre Group would have to submit a bid and be considered among other applicants.
Marttala says Park Theatre Group members are fine with the comptroller’s decision.
“We are OK with the city not giving us the property,” said Marttala. “At this point we have no lease agreement with the city and we are acting in an advisory capacity.”
As with many laws, there is an exception. If a referendum is placed on the election ballot this year and three-fourths of the votes cast are in favor of the city entering into a management agreement with Park Theatre Group after renovation, the city does not have to open the project for bids.
Park Theatre Group still has its sights set on Park Theatre restoration, says Marttala.
“A finished Park Theatre will bring a lot of opportunity to the community. We want to help facilitate that and make it a success for the city. Our goal is, and has always been, the restoration of Park Theatre.”