By DOUG MASON,
mason@knews.comSeptember 12, 2004
It has been a long, hot summer at the Bijou Theatre, and there's no relief in sight.
Instead, there's been a vigorous fanning led by board of trustees Chairman Chuck Morris, and a fingers-crossed hope that last week's preliminary visit by a state of Tennessee-funded development consultant will lead to better seasons at the historic theater. Meanwhile, in a switch of metaphor, Morris said the historic building's "nose is just above going under; we're bobbing."
A grim statement, certainly, but more promising than what Morris said last June, when the theater had just been threatened with foreclosure, leading Morris to dismiss the theater's staff and cancel its programming.
At that time, he told the News Sentinel, "the board has two to three months to restore financial stability, or it will lose the theater."
"If that is not accomplished by the end of summer, we're done," Morris said mid-June.
Fall arrives Sept. 22. To date, the Bijou has slid further in debt and continues to struggle to meet its monthly, interest-only $5,252 mortgage payment. The August payment was more than 10 days late, putting the theater into default, during which time the interest rate bumped from 10.5 percent to 25 percent.
But a check did finally go out, keeping the wolf away until later this month, when another hard-to-scrape-together payment is due - another payment that does nothing to lessen the Bijou's indebtedness, which includes the $607,000 mortgage and at least $202,000 in past-due payables.
The mortgage payment was reported as $6,733.12 in June, but Morris said that was the old payment. He said the Bijou negotiated last summer with U.S. Mortgage for an interest-only payment of $5,252.
Morris had estimated the past-due payables at approximately $183,000 in June. He said one of the "surprises" he discovered upon looking further into the theater's finances was an outstanding $19,000 debt to New York theatrical licensing company Music Theatre International for royalties on Bijou-produced musicals.
He said the Bijou also owes $28,000 - grown from $25,000 in June - to the Internal Revenue Service to settle unpaid payroll taxes; and $2,300 to the state of Tennessee for first-quarter unemployment taxes.
Morris said he met two weeks ago with the IRS, which gave the Bijou a 60- to 90-day deadline to work out a payment plan. He said the state employment office placed a lien on the building in late June, but so far has taken no further action.
The good news is the theater's mortgage holder, U.S. Mortgage of Lake Oswego, Ore., hasn't threatened to foreclose lately.
In June, the Bijou fell three months behind in its payments to U.S. Mortgage, prompting the note holder to issue a notice of foreclosure. A gift from Home Federal Bank Chairman David Sharp brought those payments current. So far, U.S. Mortgage has been patient.
"They're not talking foreclosure; they haven't since June," said Morris. He also said he has no idea where the September payment is coming from.
Morris hopes to bring the Bijou's mortgage back to Tennessee at a much lower interest rate. He says no Knoxville-based banks are willing to take over the mortgage.
However, he has met with a Tennessee bank that has one branch office in Knoxville that is considering a loan that would pay off the Bijou's mortgage and outstanding debts. Morris declined to identify the bank.
The Bijou survives day by day, depending in part on donations to a fund overseen by Sharp, the proceeds from a series of little-attended benefit concerts and rental fees for the facility.
The theater's chief source of income is the $2,000 monthly rent from the Bistro restaurant. The popular bar and eatery is a tenant in the Bijou's building.
There have been a few positives this summer.
An unexpected, $3,400 donation from singer Clay Aiken helped the Bijou make its monthly $2,700 insurance payment. The "American Idol" star gave the theater 3 percent of ticket sales for his Aug. 17 concert at Thompson-Boling Arena.
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