GEDC seeks broker to market Lynn Theatre

The Gonzales Economic Development Corporation will be seeking proposals from a third-party real estate brokerage firm to market and sell the historic Lynn Theatre, which has been shuttered since 2020.

GEDC remains the unplanned owner of the theatre, located at 510 St. Paul St., because the previous operator failed to make required lease-purchase repayments back to the corporation. Board members are insistent they want to see the building back on the tax roll, whether it operates as a theatre or some other business.

“We have been in negotiations with different parties, and for various reasons, they have not materialized,” said GEDC executive director Jennifer Kolbe. “The last deal was hung up because of the terms of a performance agreement. If you remember from past meetings, there's certain ways that, since we're a public entity, we can sell this property. And if we sell it below market value, it needs to be sold under the terms of a performance agreement.”

Under a performance agreement, a company receiving a loan or property from the GEDC must commit to additional payroll or jobs and a capital investment. Additionally, performance agreements may include “clawback” provisions which outline the terms of repayment if a company does not meet its performance requirements, including forfeiture.

Kolbe said if the GEDC can get an appraisal of the property and sell it based on the appraisal; go out for public bids; or hire a third-party to market the property and sell it for them, which is the method she was bringing forward to the board to consider.

“We would go out for proposals and whoever we select, according to our scoring criteria, they will bring comps back to us and they would secure an appraisal,” Kolbe said. “We would work with them to come up with a sales price that we both agreed on. And then, of course, they would be paid a commission because they are a real estate agent. They will do the hustling, you know, the marketing, and eventually, hopefully, we’ll come to the terms of a sale (with a new owner).”

GEDC president Andy Rodriguez said the corporation can work with the listing agent to add any stipulations they believe are necessary to the sale of the property.

“More specifically, if you want to say it can only be a theatre, then that could be a stipulation if the board agrees to it,” Rodriguez said.

Currently, the Lynn has a market value of $361,910, which includes $347,790 for the building and $14,120 for the land, according to the 2021 records of the Gonzales County Appraisal District. That was an increase of $130,460 above the $231,450 market value listed on the books from 2018 through 2020.

GEDC has owned the property, which was built in 1947, since it was foreclosed on in February 2011 after previous owner Cal Collins, a San Antonio businessman, failed to make repayment on thousands of dollars in loans from the GEDC.

Since that time, the Lynn has reopened twice under different management — once more under Collins in 2011-2012 and under Cliff Anderson from 2012 until the theatre closed in 2020 due to financial difficulties right as the COVID-19 pandemic hit.

In other action, the board voted to approve a performance agreement with Main Street for the Business Incentive Grant Program offered by GEDC. Kolbe said new Main Street director Tiffany Hutchison-Padilla and her board had already approved the agreement at their last meeting.

“The purpose of this agreement is to empower Main Street to have the funding to do Main Street grants, which is part of their requirements to keep their certifications as a national Main Street and Texas Main Street community,” Kolbe said. “This lays out the guidelines of how they will bring in the grants, check them for completeness.

“Whenever a grant is completed, Tiffany and I will work together to make sure we validate that all the work was complete, then the invoice from the applicant will come to us and we will sign off of it. There'll be no actually money changing accounts (from GEDC to Main Street) and there will be two sets of eyes before any funds or expense is paid.”

“I'm excited to work with Jennifer and this board, the EDC, to get the funding to preserve our historic downtown Gonzales and our gorgeous buildings we have there and to create economic development,” Hutchinson-Padilla added.