Carson City could have to pay off a $200,000 loan the Brewery Art Center used to buy St. Teresa of Avila Catholic Church to turn into a performance hall.
The city guaranteed the 2004 Wells Fargo loan to the arts and cultural center, a loan the center hasn't paid.
The Brewery Arts Center, a nonprofit arts group, owns the performance hall where it hosts concerts and next to it the building where it holds arts events.
In a letter sent to the city Aug. 7, however, Wells Fargo said it would put the performance hall up for sale unless the loan was paid by Nov. 1.
The Board of Supervisors is scheduled to consider the problem at the Thursday meeting.
"It's an unfortunate situation, for sure," said Carson City Supervisor Richard Staub.
But John Procaccini, the director of the center, said he doesn't think the center will need the city's help. The center, he said, is working with Irwin Union Bank to finance the loan which should take care of the problem by early next week.
Procaccini said the center got in trouble because it was only paying interest on the loan, which was taken out by past director Phil Caterino.
Philomena Plunket, who sent the letter to the city for Wells Fargo, declined to comment on the situation.
If the city does have to pay the loan, said Joe McCarthy, the city's economic development manager, it will then own the property and likely lease it back to the center for a below-market price, like it does with the center's other building.
Though this probably won't happen, Procaccini said, it's a situation that some in the center's board of directors think would be better than the center itself owning the performance hall.
The city will find a way to keep the building, said Supervisor Shelly Aldean, because it's an important investment and has "intrinsic value" at its downtown location at King and Division streets.
As it is, the city has already invested a lot in the center. It gave it a $675,000 grant toward the purchase of the church and gives it $15,000 a year.
"At this point," Staub said, "I don't think the city has any intent to let that Brewery Arts Center go anywhere."
He acknowledged, however, that the city doesn't know where exactly where it would get the money to pay for the loan. Officials have had to wait to hire staff and fund projects recently because of the city's financial situation.
"That is the hundred-dollar question," he said. "We're in a tough spot ourselves."
• Contact reporter Dave Frank at dfrank@nevadaappeal.com or 881-1212.
If you go
WHAT: Carson City Board of Supervisors meeting
WHEN: 8:30 a.m. Thursday
WHERE: Sierra Room of the Community Center, 851 E. William St.
A copy of the agenda is available at www.carson-city.nv.us. Go to the Board of Supervisors link under the City Government tab.
Other items on the agenda:
• A revised job description for the city manager addressing a "code of professional conduct." Current City Manager Linda Ritter has a contract for the job through April 2009, but has been asking for feedback about her duties since Mayor Marv Teixeira tried to get her to resign in July.
• A July report that shows taxable sales down since a year ago
• Searching for a sporting goods store to go in with Burlington Coat Factory in the old Wal-Mart building in South Carson
• An ordinance to limit the amount of space adult merchandise retailers have for adult video to 200 hundred feet or 5 to 10 percent of their store, whichever is less.
Other city meetings this week:
• Open Space Advisory Committee
6 p.m. Monday in the Sierra Room of the Community Center, 851 E. William St. Among the items on the agenda is a prefabricated bridge for the Mexican Trail Ditch. The committee can be reached at 887-2363
• Parks and Recreation Commission
5:30 p.m. Tuesday in the Sierra Room of the Community Center, 851 E. William St. Among the items on the agenda is a proposal to loosen regulation on dogs in parks. The commission can be reached at 887-2363
• Airport Authority
6 p.m. Wednesday in the Sierra Room of the Community Center, 851 E. William St. The authority can be reached at 887-1234.