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07 Dec, 2017

Back up for auction, State Theatre being marketed for uses other than the arts

07 Dec, 2017 - Tranzon Fox

Originally published in the Culpeper Star-Exponent
By Allison Brophy Champion
Dark for more than a year, the abandoned Culpeper State Theatre is back up for foreclosure auction and being marketed for uses beyond the performing arts.
The nationwide auction company, Tranzon Fox, will attempt to sell the circa 1938 art deco theater on Main Street in the town of Culpeper at 1 p.m. on January 23 at the site. A $50,000 deposit will be required with a suggested opening bid of $500,000 for the 25,000-square-feet-plus historic property.
It underwent a $13 million renovation and expansion prior to its grand reopening in 2013 before it shut down in late 2016, saddled by $5 million in unpaid construction debt. At auction, the theater’s lights, equipment, seats and other fixtures will be offered for bids separately.
A news release from Tranzon Fox stated, “Whether the building will be bought for continuation as an entertainment venue remains to be seen … It’s anybody’s guess what will happen – perhaps an investor/developer will have a completely different idea in mind: brewery, spa/fitness center, condos/apartment, retail, boutique hotel. More details to follow after the holidays.”
Culpeper Town Director of Economic Development and Tourism Paige Read said Thursday that her department looks forward to working with whoever the new owner is to ensure a successful transition of the State Theater property.
At the auction house web site, the theater is listed as a multi-use property being offered at foreclosure sale on behalf of the first position lienholder’s original $2 million note. According to court documents, a Rappahannock County couple made a $2 million loan to the State Theatre Foundation in 2012 with a scheduled maturity date by the following year.
The repayment schedule was extended in 2013 to 2020, at the request of the Foundation, and the creditors agreed so long as the loan did not default, according to court documents.
The State Theatre was appraised in June for $5.8 million, not including its fixtures and equipment.
“Don’t need a theater? See the Commercial-2 zoning permitted uses list in the property information package and get creative!” according to the auction house web site main page listing for the Culpeper State Theatre. “There are many options for re-purposing.”
Listed on the National Register of Historic Places, the 500-plus-seat theater was sold to another note holder, State Theatre Owner LLC in 2008, according to the auction house, and leased by the State Theatre Foundation, a nonprofit group led by a volunteer board of local business people.
Originally opened as Pitts Movie Theater, the building closed in the early 1990s and sat vacant and in a blighted condition for two decades before Culpeper developer Greg Yates purchased it and turned it over to the Foundation. He served as president of the Foundation board for a while before distancing himself from the project as the board changed, hiring and firing various paid directors.
According to the auction house, the master lease with the Foundation ends in April of 2018. In addition, the five-year historic tax credit use restrictions will expire in May of next year, according to the auction house. The theater’s renovation was paid, in part, with $1.6 million in Federal Historic Tax Credits and the same in Virginia historic tax credits, according to the National Trust for Historic Preservation.
There will be a 10 percent buyers’ premium based on the high bid at the upcoming auction and a 45-day closing period. Prospective bidders can tour the property 11 a.m. to 1 p.m. on January 8 and January 16 and at the same time on the day of the auction.


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