After more than two years of design work, an initial investment of $400,000, and numerous discussions with the Town of Truckee that were contentious at times, the Truckee Art Haus & Cinema was unanimously approved in March 2019 as part of the Railyard development in downtown Truckee. A 12,200-square-foot building, the Truckee Art Haus includes a lobby, bar, and three screens. The largest room, with 200 seats, would double as a performing arts space.
A few months after the project was approved, however, the principal investor paused the project after failing to negotiate the $250,000 traffic mitigation fee from the town that was originally quoted as $25,000. While all involved understand that construction projects must pay fees to the town to help offset the impacts of development and future traffic issues, not only is a quarter of a million dollars too much for a small business like ours to sustain, but new theater/cinema projects commonly have all fees waived by the city. Cinema projects are “community projects” in that they offer entertainment for people of all ages and socioeconomic levels, bring people together, and, with their broad appeal, attract a significant cross section of the public to the area, helping to boost the overall economy.
Theater buildings, having only one tenant and high construction costs, do not offer rapid return on investment, thus it can be difficult to attract investors. Movie theaters are often public/private partnerships with the common goal of enriching the community. While the town has offered $500,000 over five years in exchange for free use of the theater by community groups, more than three quarters of that subsidy are canceled out by the $250,000 traffic mitigation fee and other fees associated with the project. Every investor has looked at this offer as inadequate and not relevant considering that all town fees must be paid prior to opening.
The developer of the Railyard Project understood the importance of a movie theater to Truckee and, as such, offered the property for $1 (yes, $1). This is a key factor in helping the project seek an investor willing to construct the building and become the landlord for the Truckee Art Haus group.
If you look around Truckee, most of the development that is happening is centered around housing and hotels. But Truckee lacks significant entertainment other than recreation. We are trying to fill this void but need an investor that is interested in a long-term investment and doing something good for the community.
The Art Haus team has been diligently knocking on doors of potential investors and commercial real estate companies both locally and nationally, but to no avail thus far. Our dream of building the Truckee Art Haus is still very much alive and we are committed to finding investors, but until then, the project is on hold.
~ Steven and Melissa Siig, owners/operators of Tahoe Art Haus & Cinema
The town continues to be very supportive of the theater as a main anchor in the Railyard and important people-gathering place. It has been fully approved for months, we continue to work with the Siigs as the provider of that theater, and we have been anxiously awaiting their final drawings to be able to issue permits so that they can build. But our understanding is that they’ve been looking for financing to do the project and we hope they find it.
~ Jeff Loux, manager, Town of Truckee
The applicant shall pay traffic impact fees applicable at the time of building permit issuance. The estimated traffic impact fees for the proposed 12,130 square feet of multiplex movie theater use is $215,064.09 … The actual traffic impact fees will be based upon the latest fee schedule adopted by the Town Council in effect at the time of building permit issuance.
~ Letter from Scott Mathot, associate engineer for the project to Yumie Dahn, town associate planner, sent on Oct. 31, 2018
The document from Oct. 2018 [had] the correct fee amount. However, this was never specifically brought to our attention or that there had been an error, and somehow our team missed this in October. It was only when we received conditions of approval in March that we realized the traffic mitigation fee was $250k.
~ Melissa Siig, owner/operator of Tahoe Art Haus & Cinema