Auction Countdown: 7 Days… “Bailout?!”

Could be detrimental!

Questionable / detrimental!

Or “Why you can’t always trust the media

The story is now everywhere in the Baltimore news media, but… Why is it portrayed as a “bailout”?!

Maybe, they just don’t have the smarts to call it what it is, a buyout (BIG difference)?

Bailout infers that taxpayer money is being spent to allow business to continue as usual. This is clearly NOT the case here. As Sean Brescia (Clearpath Management), who has been helping Senator management through this difficult time, points out:

I think this is just indicative of the typical simple-minded journalism we see in this market.  It is very easy to latch onto a popular national buzz phrase as a weak attempt at sensationalism. If these “journalists” bothered to spend any real time or effort investigating the true details of the proposed plan, they would see that Tom [Kiefaber, current owner of the theatre] is still losing virtually everything he has spent his life building, being left with substantial personal debt, and out of business with no gainful employment.  I would hardly call that a “bailout.”

City Hall realizes this proposal is a smarter way of controlling the future of a nationally recognized landmark rather than allowing it to go to a free-for-all scenario at the 1st Mariner auction.

The city would pay off 1st Mariner and become the owner of The Senator Theatre (and presumably work a deal with state officials regarding their loan amount). Once the property has a clean financial slate, they would then either offer the theatre to a “qualified operator” via:

  • Property sale
    or
  • Long-term lease

In this scenario the city appears as savior to a piece of its history AND has a chance to make back the money spent.

If  sloppy journalism is not the reason for the bailout characterization, one’s mind begins to wander and wonder if there are connections to certain folks who would much rather it go on the auction block, thus painting the proposal as “yet another government bailout” would be helpful, wouldn’t it?

I’d also like to know why WBAL TV decided to edit my answer to today’s Watercooler Question of the Day: “Should the city be taking an active role in bailing out the Senator Theater?”

What follows is what I sent in. The bold text represents what was omitted during the airing of the answers. At first I thought it was due to length, however, the answer that immediately followed took up two screens to display – mine only took one (I meant to be as brief & to the point as possible):

Normally, I would say no to government intervention, but this plan should not only save the last of Baltimore’s single screen movie palaces from an uncertain future, it helps to ensure that the money poured into the revitalization of Belvedere Square years ago does not go to waste. And, last but not least, it includes a promise that will allow the man who has fought for the theatre’s survival & well-being of its community for the last 20 years.

Tom Harris

Notice they said “bailing out”? I decided to leave that issue alone when formulating my answer (just brevity’s sake). Interestingly, the complete text is on the Watercooler web page, with all the misinformed folks screaming, “No bailouts”.

Yet more reminders that one has to be careful not to take news at face value,  nor a single source as ‘gospel’.

-T. Harris

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2 CommentsLeave a comment

  1. I might be wrong on this point, but my impression is that this action by the city will be less costly to taxpayers than inaction on their part. That is, the city is already on the line for their $600K loan guarantee, all or a portion of which might get called on during/after a bank auction. In this scenario, the city will have to pay legal work, but is the city going to be paying the bank for the entirety of the loan upfront (and thus breaking all liens), or is the city going to make arrangements with the bank to assume the loan themselves? If the latter case (or something similar) is what’s happening (as I assume), then the city may wind up spending less money on the Senator with this course of action than if it went to auction.

    At any rate, while I’m grateful that the city is stepping in to make things a bit less chaotic than a sudden bank auction, and I’m hopeful about Bill Henry’s claim to open this up to the community, I’m still a little concerned about the city’s ability to execute in the community’s best interest. We’re not through with this yet!

  2. Hello, Nicholas!
    I too was… Guardedly optimistic at the announcement.

    And it appears that was warranted: http://www.mddailyrecord.com/article.cfm?id=11270&type=UTTM
    “While Baltimore officials have announced the city plans to buy the Senator Theatre’s debt — effectively saving the landmark from going to auction next week — the 70-year-old Art Deco property isn’t out of the hole yet.”


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