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Wall Street Theater looks to recapitalize and settle loan with Patriot Bank

Screenshot of The Wall Street Theater’s website.

The Wall Street Theater and Patriot Bank have negotiated a settlement in the foreclosure action filed against the nonprofit entertainment venue in July.

Under the settlement agreement filed in court last week, The Wall Street Theater can avoid being evicted by paying the bank $3.1 million, the agreed upon value of its real estate, although the debt is said to be nearly $9 million. The deadline for payment is Dec. 15 but the theater can get an extension of that deadline to Feb. 28 if it proves that $108,145 in sewer and property taxes have been paid to the City.

The Wall Street Theater has admitted fault, as part of the settlement.

Patriot’s July foreclosure filing came after Wall Street sued the bank in June, alleging that Patriot purposefully made loans to the theater knowing they couldn’t be repaid. Patriot refinanced a $3 million loan to make it $8.8 million, according to Wall Street, which alleged Patriot made false statements in “intentional” and “negligent” misrepresentations.

Wall Street also alleged that Patriot never sought nor received State approval for the “secreted” financial modifications to their agreement.

(File photo)

A Nov. 6 legal filing shows that Wall Street’s lawsuit against Patriot is being withdrawn. The legal document regarding the foreclosure settlement was filed the same day.

Simultaneously, the theater is promoting a GoFundMe campaign to raise $25,000 for operating expenses. Wall Street Theater Company President Suzanne Cahill said the GoFundMe campaign is not related to the foreclosure action.

State and Federal tax credits supported the renovation of the former Globe Theater into The Wall Street Theater, which opened in 2017. A $1.7 million HUD (U.S. Department of Housing and Urban Development) Section 108 loan to the theater was held up by the Common Council in 2017 due to liens on the property, then-Planning Committee Chairman John Kydes (D-District C) said. The theater was going through a Chapter 11 bankruptcy over a dispute with a contractor and emerged from bankruptcy in January 2019 “after successfully implementing its plan of reorganization,” according to Westfair Business Journal.

The Wall Street Theater had made offers of $2.9 million and $3.5 million to settle the loan dispute before the foreclosure action was filed, according to its lawsuit against Patriot.

Attorney Brian Wheeler of Robinson & Cole, representing Patriot Bank, did not respond to an email asking about the settlement.

Cahill, theater President, said the theater has a recapitalization plan.

“We are working with financial partners, including other community banks and nonprofit organizations, and also some of our neighbors on Wall Street, to get back on track, and to move forward,” she said.

The theater has shows booked through next year and event holds for 2025, Cahill said. “Our goal has always been from the beginning to redevelop the theater and preserve it,” and countless volunteer hours have been invested. “I’m happy now that we’ve come to an agreement with Patriot Bank for us to be able to go our separate ways and be healthy together.”

The $108,145 in sewer and property taxes, described in legal documents as an encumbrance on the lien, stem from a property tax dispute, she said.

The Wall Street Theater has appealed its tax bill, contending that as a nonprofit its property should be nontaxable, legal documents show. The City denies that.

Most Connecticut communities recognize that nonprofits should be exempt from property taxes but in Norwalk, nonprofits have to file an appeal, Cahill said. WST’s lawyers are discussing the situation with the City’s Corporation Counsel office in hopes that the City will “alleviate the burden” from the theater so it can move forward.

“The Wall Street Theatre currently has a tax appeal pending in the superior court regarding the assessment of the property on the 2022 Grand List,” Norwalk Director of Communications Michelle Woods Matthews said in an email. “That case is in the initial stages of the process and it will be processed in the same manner as any other property tax assessment appeal case.  The City does not plan to take any action that will alleviate the Theatre’s current outstanding taxes.”

Screenshot of The Wall Street Theater’s GoFundMe page.

The theater’s GoFundMe page had raised $1,220 of its $25,000 goal as of 1 a.m. Thursday.

“Right now, we have operational expenses beyond our working budget, and any way we slice it, we are coming up short,” Cahill states on the GoFundMe page. “Stage light bulbs need replacing, the HVAC system needs service, and utility costs have skyrocketed.”

“Our electric bill is through the roof,” Cahill explained to NancyOnNorwalk. Operating expenses have exceeded budgetary projections and “we’re coming up to the end of the year, it’s gonna be a cold winter.”

The Wall Street Theater provides a venue for other area nonprofits at reduced cost, she said.

“We bring in 100,000 people a year,” Cahill said. “I’m very confident that we’re going to be able to be successful for the community, and we’ll all move forward together. I’m really looking forward to the revitalization of the whole Wall Street corridor, and I think having the theater there is an integral part of that. If we all work together as a community, with our organization’s help furthering the arts there, it’s going to be it’s going to be a new day for Norwalk.”

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Comments

2 responses to “Wall Street Theater looks to recapitalize and settle loan with Patriot Bank”

  1. Lisa Henderson

    The Wall Street Theater is a Norwalk gem. I’ve attended many events and hope that they will continue into the future. Norwalkers, please support this Norwalk venue. Open up you pocketbooks – any donation, big or small.

  2. Speaking as someone who is clearly biased, employed as the Production Manager for the theater, I have to speak out for the hugely positive impact that the Wall Street Theater has had in my own life. The fact is that without that venue, I would not be nearly as invested in the success of the community as I have become. I would certainly not have made it the focus of my professional employment built on a thirty year career as an audio engineer. I would not have been here long enough to give five years of service to the Norwalk Arts Commission. The fact is that I came originally to help develop the Factory Underground Studio, but it was the Wall Street Theater that enabled me to double down on Norwalk, and persist here year long enough to fall in love, and call Norwalk my adopted home.

    As for the theater itself, beyond what is personal to me, that is is the only concert venue of its type in the city of Norwalk, the value of the Wall Street Theater goes far beyond being a place to see music concerts. It is a focal point to a neighborhood that is becoming known throughout the entire region as a music, artists and cultural district. It is a hub of cultural tourism that is drawing people to area, spending money in our bars and restaurants, positively impacting our local small business and creative economy; Its a commercial attraction to new residents with an increasing supply of housing, both affordable, and market rate.

    As the only real Pubic Meeting House of it’s size, in a part of Norwalk which is the historical birthplace of the city itself, Wall Street Theater has opened its doors to several area non-profits and Norwalk government entities including the Norwalk Historical Society; Norwalk Board of Education; City of Norwalk Department of Traffic, Parking, and Mobility; Fairfield County Community Foundation; Connecticut Legislature; Wall Street Neighborhood Association; Connecticut Main Streets, and more.

    To think about how our neighborhood would have come this far, from before, and through the impact of Covid, without the Wall Street Theater is for me unthinkable.

    Would a Performing Arts College have taken a serious look at our area, and moved in next door to a blighted, boarded-up, theater? Would Cafe Aroma, Alma’s Bistro, Greer’s Southern Table, and Taco Guy have moved in next door, and across the street? Would the Wall Street Neighborhood Association, whose steady drum beat has drawn the eyes and ears of City Hall back to Wall Street, and encouraged its commitment to improving our streetscape, have ever taken root? So many community events have been started in and around the theater such as Norwalk Film Festival, First Friday, Make Music Day, etc. that might never have happened at all.

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