A new path for the Mayo Civic Center space leased by Rochester Civic Theatre could emerge in the next two months.

“We’re pulling everyone together to make sure we’re all on the same page, because our ultimate goal is to really optimize use of the entire center,” Rochester City Administrator Steve Rymer said Thursday. “It doesn't really matter who has what walls, if you will.”

The immediate steps are expected to end the Civic Theatre’s lease and replace it with an operations agreement until a larger agreement can be reached regarding the space at the Civic Center’s northwest corner.

Discussions during the upcoming weeks will involve Mayo Civic Center operators, as well as city staff from the Civic Music and Parks and Recreation departments. Rochester Art Center representatives will also be included in the discussion, since the organization is also tied to the center.

Rymer has proposed a “one-roof” model, with Civic Center operators taking charge of many aspects of maintenance of the entire facility, while city staff and the nonprofit agencies could handle programming some spaces.

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Misha Johnson, the Civic Theatre’s interim managing director, said the organization is already working with other theater companies to see what opportunities exist for sharing the theater stages.

“We’re trying to find a way to have three other theater companies here within the space,” she said, indicating a proposed calendar has been created.

Rymer suggested such efforts could create stability for the space, as well as the organization that currently occupies it.

“Hopefully something like that would provide more certainty for the Rochester Civic Theatre, rather than the limbo we’ve been in,” he said.

The city threatened to end the Civic Theatre’s lease earlier this year due to financial challenges the organization was facing.

A recent audit of financial statements through last July was reviewed Thursday by the Rochester City Council’s Outside Agency Oversight Committee, and council members Shaun Palmer and Michael Wojcik acknowledged that no surprises were found.

Dale Martinson, the city’s director of finances and information technology, said the reports continue to show losses, but conditions are improving.

“This is no surprise for anybody,” he said. “They had basically losses from the unaudited statement we were able to see from exactly a year ago now.”

Erich Heneke, of Heneke Business Consulting, said the Civic Theatre’s new budget does project a small net income in the next 12 months but added that the organization will likely have a negative cash flow at the same time due to anticipated debt payments.

He said the organization owes $284,000 on a bank loan, in addition to a total of $55,000 in personal loans.

Palmer and Wojcik cited continued concerns about the organization's financial status, but acknowledged some progress has been made.

Wojcik indicated a change in board members and financial oversight was key to gaining his support for finding a path forward.

Palmer, however, cited apprehension for extending city financial support beyond what is required under the city’s existing lease agreement, which only calls for the city to cover maintenance costs.

“I would like us to stay strictly to the lease,” he said, stating he’s not willing to approve city support to cover utility or insurance expenses.

So far, the city has provided Rochester CIvic Theatre with $50,000 of the $200,000 in support it funded for the organization in the 2020 city budget.

The city council is expected to tackle a proposed direction for the theater space during Monday’s meeting, which would likely provide an operating agreement ahead of a more formal “one-roof” arrangement later this year.