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Joliet considers releasing annual subsidy to Rialto

The Rialto Theatre (Handout)

Despite what city officials called years of mismanagement and a number of missed opportunities to bring in talent, the city of Joliet sees value in backing upcoming shows at the Rialto Square Theatre.

At a special March 28 city council meeting, officials voted 6-1 to approve the preparation of an intergovernmental agreement between the city of Joliet and the Will County Metropolitan Exposition and Auditorium Authority Board. Councilman Larry Hug cast the lone vote against the effort, while councilman Jim McFarland was not present at the meeting.

The agreement would grant the city’s inspector general full access to the theater’s financial records in exchange for the city to release some of its annual $600,000 subsidy to the Rialto.

The city council was expected to vote on the intergovernmental agreement at its April 5 meeting. [Editor’s note: At press time, the meeting had not yet occurred.]

As part of the agreement, the city would release no more than $440,000 to help the Rialto make payments on back payroll taxes and to secure its upcoming shows. To date, the city has released $160,000 of its $600,000 subsidy.

Mayor Bob O’DeKirk said the city wanted to elicit community input after a number of new developments came to city’s attention.

“The issue with the Rialto Theatre came up about three weeks ago,” he said. “Dan Vera [president of the WCMEAA board] approached the city and was very forthcoming with the issues that were going on. Since that time, it’s evolved a little bit and some decisions were being made behind closed doors in the city about extended funding or what commitment the city would make.”

Officials have been in talks with the Rialto about reviewing its finances situation. The Rialto board hired an outside financial consultant to satisfy the city’s demand.

City Manager Jim Hock said it’s unclear what assurances city officials can count on, since a complete financial review of the Rialto is not yet completed.

“My understanding is from our finance director is that’s going to take quite some time before we really have a handle around the cash, assets, what’s owed to all the vendors,” he said. “We do know that they have been behind in payroll taxes payments since the start of March, but there are still back payroll taxes owed to the federal government.”

City officials said they recently learned that promoters were looking to back out of arrangements to do shows at the Rialto this fall, as a result of learning about the theatre’s financial situation in the news. In response to the concerns expressed by promoters, the city manager provided a letter of assurance to promoters letting them know the city intends to pick up minimum amount of money due to the acts.

Hock said the issue at hand presents a challenge for the city, in part, because payments for two comedy shows will be due by the week’s end.

“The question is whether or not we want to enter into any kind of intergovernmental agreement with the Rialto, establishing specific conditions to the money that we provide them on an annual basis,” he said.

O’DeKirk said it’s evident that a compliance issue remains between the city and its relationship with the Rialto.

“I think it’s a concern that the inspector general is not being allowed over at the Rialto,” he said. “I know when we first met three weeks ago there were basically two provisions that we needed to happen for the city to continue to fund or up its funding. One was regarding Mr. Green and his employment and the second was for the inspector general.”

O’DeKirk added that it becomes less clear why the city should be “making the Rialto’s problems, the city’s problems.”

City officials learned that the finance committee for the Rialto hadn’t met since September 2015, which furthered concerns about the theatre’s financial management.

Additionally, councilwoman Jan Quillman stated that the Rialto failed to hold a hearing prior to the week of the special city council meeting regarding the employment of Randy Green, the general manager of theatre who was placed on paid administrative leave.

Rialto attorney David Silverman sought to lessen the city’s worry.

“We have not been successful in negotiating that exit agreement,” he said. “The city has made it clear they don’t want us to do that. That certainly you don’t want any city funds used to support such an agreement.”

Quillman said she loves the Rialto, but it seems to her that Joliet is being held hostage in this situation.

“I’ve been a big advocate for the Rialto, but now I have to look at the other side here,” she said. “There’s been no finance meeting, there’s been no oversight of the money since September and then you have no payroll taxes being paid. And now, you’re coming to us for more money. Well, we have to look at the rest of city too. This is taxpayer money.”

Silverman said it’s not that the Rialto has been resistant in its effort to cooperate with the city, explaining how it is to his understanding that a financial review lies outside of the inspector general’s expertise.

“We have a problem, that’s obvious,” he said. “The Rialto if not the, is one of the anchors of downtown Joliet, so I know it’s important to you and I know that it’s important to the taxpayers of Joliet. We’re asking ‘please help us.’ We’re saying that we will bare a financial soul to you, we have no problem doing that; you’re a big investor, you’re a partner.”

Hug negated the concern regarding Inspector General Chris Regis’ ability to scope out the Rialto’s financial situation, saying the inspector general would call for the assistance of his partner if needed. When the city requests a review of the theatre’s finances, Hug added that it intends to take a complete look at everything.

Silverman said the theater aims to comply, but it’s unsure how far the city will need to take their investigation.

“I’d rather look out the windshield than in the rearview mirror,” Silverman said. “Let’s figure out where we’re at and figure out how to move forward from there. We can go backwards and look at the last 20 years if you like. The Rialto has financially struggled for a long time; this is nothing new. We have to figure out a path for success.”

In response to the attorney’s reassurance, Hug said it’s important to make sure past mistakes aren’t repeated.

“Sometimes you have to make sure your axles aren’t missing their rear tires,” he added.

The issue of liability is another concern city officials have been looking into as of recently. Regis reached out to the federal government to survey the risks of providing assistance to the Rialto, given the fact that the theatre is behind on payments.

“Personal liability is a possibility,” Regis said. “However, in situations where it’s a government body or an employer who is delinquent, the employee’s agency is generally the one that will bear the liability, not the individual who may have moved on since then.”

Hug questioned why the city should feel compelled to bring on the two shows this fall.

“On the matter of continuing to rebuild the confidence [of promoters], that’s a very temporary thing…,” Hug said.

Hock said it’s more of a matter of securing the two upcoming shows and determining how much the theater currently has and will earn in moving forward.

Councilman Pat Mudron said it’s going to be a tough decision for the city to make, but added that the Rialto Square Theatre is more than willing to work with the city.

“The city council, as I see it, is responsible for the downtown Joliet, and the Rialto is a major part of it,” he said. “As [Gerl] already mentioned, we’re on a positive move here. Junior College will be opening soon, transportation center is here and will be added to, the courthouse, as far as I know, everyone is committed to keep it down here.”

Mudron said downtown Joliet needed the Rialto Theatre and its cultural benefits in order to bring in the types of new business the city is hoping to attract.

Councilwoman Bettye Gavin thinks the city has an opportunity to tap into more dollars in terms of diversity in the shows that are booked. She said new management might help in reversing this trend.

“We are certainly missing some opportunities and dollars in terms of diversity and in spreading that footprint that would bring that in,” she said.

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