The Rialto Square Theatre board is taking another hard look at selling the Two Rialto Square building, and the coming weeks may show how serious it is this time.
Repair bills are mounting, vacancy rates are growing, and the board has been meeting in closed sessions to discuss a possible sale of the building.
Two Rialto Square is a 64,225-square-foot office building next to the theater. The building and the Rialto Square Theatre in the early 1980s were put under the control of the Will County Metropolitan Exposition and Auditorium Authority, commonly called the Rialto board, under the theory that office rents would help sustain theater operations.
Instead, Rialto officials said, the building has become a drain on finances.
Board Chairman Robert Filotto said the authority is waiting on information from its attorney and may hold a special meeting later this month solely for the purpose of exploring a sale of Two Rialto Square.
The budget for this year projects a $100,000 drop in rental income and a $72,000 increase in repair costs, mainly at Two Rialto Square.
The Rialto has insurance to pay all but $50,000 of the damages. But $50,000 is tough to come by for an agency that relies on a $500,000 donation from the city of Joliet to make ends meet each year.
The authority already was putting off replacement of an aging cooling tower, which controls heat and air conditioning, before the water line broke in July.
Filotto in early 2017 urged keeping the building because of the positive cash flow it generates and advised hiring Olivieri Real Estate to provide tenant services with the goal of filling a building that was about half-empty.
But since July 2017, Two Rialto Square has lost two tenants, and the vacancy rate has gone up. One tenant brought into the building, N.F. Demolition, has moved out.
The tenant that might have been there the longest is the Will County Center for Economic Development.
“One of the reasons we’ve stayed here is not to abandon the Rialto,” said John Greuling, CEO for the Center for Economic Development.
Deferred maintenance is an issue, Greuling said.
“At some point in time, something has to give here,” he said. “Our biggest challenge is we’re promoting Will County literally to the world, and this building is not the best spot to show off Will County.”
Two Rialto Square has nine tenants and 17 vacancies. The vacancy rate now stands at 65 percent, compared with
58 percent in 2017, Rialto Executive Director Val Devine said.
Devine said in an email that Two Rialto Square “is not living up to its original purpose, which was to be a positive revenue stream that could help support the theater.”
John Olivieri, the real estate professional hired to attract tenants, said Two Rialto Square needs major renovations if the building ever is to be filled.
“The building has been neglected for 30 years,” Olivieri said. “We need
$1 million to $2 million to get it up to par with other buildings.”
Olivieri said the best plan would be to move tenants around to open up entire floors for renovations and fix the entire building one floor at a time.
“But,” he said, “there’s no money.”