The City Council decided Monday to take a $200,000 line of credit from a private business group to provide financial backing for the purchase of the Egyptian Theatre.
Dr. Ray Broadbent, theater owner and a Salt Lake plastic surgeon, will now sell the old movie palace to the Weber County Heritage Foundation for $250,000.Broadbent has been trying to sell the building for about three years, and when he couldn't find a buyer, he asked for a demolition permit so he could tear the theater down.
But the Heritage Foundation stepped in to save the building, and the group is getting its backing from the city.
The City Council last week agreed to loan the foundation $30,000 so the group could make its first $100,000 payment.
Broadbent had said he would not accept the money unless he had a guarantee that the second $100,000 payment could be met later this month.
The foundation is hoping that a loan from the National Trust of Historic Preservation will go through May 13 to meet that second payment.
A National Trust spokeswoman said Monday that having the city back the project would not hinder the consideration of the loan.
As a matter of fact, said spokeswoman Colleen Collins, the National Trust is encouraged by the community support in preserving the old building.
"The National Trust is very interested in this project because it is one of the last remaining Egyptian Theatres left in this country," Collins said.
But just in case the national loan doesn't come through, the city agreed to lend the foundation the money.
To make sure that second payment was met, former Mayor A. Stephen Dirks asked the Ogden Industrial Development Corp. on Friday to give the foundation the money.
But corporation President John Lindquist said the charter prohibits the corporation from giving money to private groups, so members decided to give the city a $200,000 line of credit. The city can now take a portion of that borrowed money and give it to the foundation.
In exchange for the credit, the city agreed to put up 45 acres of unimproved industrial property as collateral.
City Manager Cowles Mallory told the council that the land where the theater sits is worth at least $250,000, so if the city got stuck with the property somewhere down the road, it could always sell it.
"I think this is a secure loan," he said.
Mallory also said that if the National Trust came through, the city could always take the $200,000 line of credit and use the loan money to develop other portions of downtown Ogden.
The theater was built in 1924 and has become a downtown Ogden landmark. The structure was designed with an Egyptian theme after the discovery of King Tut's tomb.