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August 25, 2009

Foreclosure auction set for North Shore Music Theatre

By Paul Leighton

BEVERLY — The property and assets of the North Shore Music Theatre will be auctioned off to the highest bidder at an upcoming foreclosure auction, according to the theater's former chairman.

David Fellows said four groups with theater backgrounds have expressed interest in buying the property and continuing to operate it as an arts center.

"I think everyone is thinking musicals, but they are also thinking of other things, from Shakespeare to straight plays to dance to opera," Fellows said. "People are using this as an opportunity to think about what would sell and what is needed in North Shore communities."

North Shore Music Theatre closed in June due to mounting financial problems. Fellows said the board of trustees has turned the property and assets over to Citizens Bank, which is in the process of foreclosing on the theater's two mortgages, which total about $5.2 million.

The theater also owes another $5 million to subscribers and vendors, but that is unsecured debt that won't be repaid unless the auction sale nets enough money, Fellows said.

Fellows said the bank plans to hold a foreclosure auction soon. A spokeswoman for Citizens Bank said bank officials would not comment.

Fellows declined to name the four arts organizations that are interested in buying the theater. He said all four are from New England, including one from Massachusetts.

Fellows said he does not know if there is other interest in the property for nontheater uses.

"There is hope that amongst these four groups that someone will emerge and put on theater," he said. "All four are very different in their theater background and their approach, but all of them want to see theater continue in that area.

"The question I can't answer is price — what will the assets go for at auction?"

The assets include three buildings — a theater-in-the-round, a restaurant and an education building — on 24 acres on Dunham Road alongside Route 128. There are also costumes, lighting, sound equipment and five vehicles, Fellows said.

The property is assessed at about $12 million, according to the city's online records. Fellows said the theater's total debts are in the $11 million to $12 million range.

Citizens Bank holds one mortgage for $4 million and is the lead bank on another $1.2 million mortgage that includes other local banks, Fellows said. That $5.2 million is secured debt that will be paid off first, he said.

All of the other people who are owed money, including subscribers, will only be paid if the winning bid is in the $11 million to $12 million range, Fellows said.

Staff writer Paul Leighton can be reached at 978-338-2675 or pleighton@salemnews.com.

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