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Streator theater asks council to consider amusement tax

Tax money would be reimbursed to theater similar to TIF

Eric Gubelman (right), owner of Streator Eagle 6, talks about features of the movie theater during an open house in November 2016, prior to the theater's opening. Gubelman approached the Streator City Council with a proposal for an amusement tax, which could be reimbursed to the theater and used for construction projects and expansion.
Eric Gubelman (right), owner of Streator Eagle 6, talks about features of the movie theater during an open house in November 2016, prior to the theater's opening. Gubelman approached the Streator City Council with a proposal for an amusement tax, which could be reimbursed to the theater and used for construction projects and expansion.

The Streator City Council talked Tuesday about the possibility of an amusement tax that would only affect the Streator Eagle 6 movie theater.

Streator Eagle 6 owner Eric Gubelman approached the city about creating an amusement tax that would cause a small increase in prices at the theater and allow the city to reimburse the theater in a matter that works similarly to a Tax Incremented Finance (TIF) district.

The reimbursed funds could go toward construction projects at the theater.

The discussed rate would have been a rebate of one-third of the taxed money going back to the theater, the other two-thirds going to the city.

"Using the amusement tax would generate revenue from the theater that doesn't go to the studios," said City Manager David Plyman. "They don't need to share taxed money with the studios."

Plyman said the theater wouldn't need to raise ticket prices higher to generate more money because the tax money would be split with the city at a lower rate than the money that gets split with the studio.

"From our perspective, it's important for us to minimize public contribution to a private project," Plyman said. "We need to first establish if the expansion of the theater will help the economic goals of the community. Are we prepared to enter an agreement if there is no project?"

The amusement tax can be applied to just the theater because of a precedent previously set allowing for exhibit amusements, like movie theaters or museums, to be separated from participatory amusements, such as bowling alleys.

Plyman said there's still a chance Streator Eagle 6 goes on with their project without the city; they plan on getting a larger screen that would be bigger than any other theater in the area, according to Councilman Joe Scarbeary.

The item was a discussion-only item on the committee of the whole agenda. The council doesn't take action during these meetings.

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