BAY CITY, MI – A little over a month after ceasing operations and filing for Chapter 7 bankruptcy, the State Theatre of Bay City is for sale.
The theater marquee on the morning of Tuesday, June 11, provided a colorful message in front of the building: Coming Soon – For Sale.
The sale was confirmed by the office of Realtor Frank Janca, who is handling the sale of the historic theater built in 1908.
Specific details, such as the cost, were not immediately available. The building is not yet listed on the Realtor’s website.
Related: A closer look at the financial debacle within Bay City’s bankrupt State Theatre
An investigation into the theater’s financial issues has spanned several months.
Under the Chapter 7 bankruptcy status, a trustee is appointed to liquidate organizational assets and pay all debts associated with the property.
The venue’s closure was blamed by the State Theatre’s Board of Directors on its former director and what has been labeled a bogus mortgage held by another Bay City-based nonprofit.
In July 2019, Mike Bacigalupo, the director and chief operating officer for the State Theatre, requested funding from the Bay County Growth Alliance on the theater’s behalf.
The BCGA Board met with Bacigalupo two months later. He asked the BCGA to consider an $800,000 bridge loan to cover construction costs. Repayment of this loan would come through future grants made to the State, the BCGA alleged.
The BCGA requested and received official documents from the theater, which were reviewed by the BCGA Loan Committee.
The BCGA approved the loan in September 2019. The following June, Christopher Girard – who was alliance president at the time – signed the $800,000 commercial mortgage that named the State as the borrower. Bacigalupo also signed the mortgage agreement and provided minutes from a February 2020 State Board meeting.
Related: Bay City Commissioner, mayoral candidate steps away from Bay County Growth Alliance
Loans or draws were then requested by and dispersed to the State on three occasions in the summer of 2020. From February 2021 through August 2023, the State made interest and principal payments on the BGCA loan.
In February 2022, the BCGA Board met with Bacigalupo and the State’s treasurer to discuss the loan repayment. The State’s representatives said they were still committed to seeking grants to pay off the loan and that BCGA would keep getting monthly payments of $4,000.
The BCGA informed the State’s people the venue’s IRS Form 990 incorrectly reported the $800,000 as a grant rather than a loan. The State’s people said they would have their accountants correct the inaccuracy.
The BCGA emailed the State Board to remind them to make the corrections. They received no response. The BCGA sent another email in October 2022 and while this too garnered no response, payments continued to be made on the loan.
More than a year later, in January 2024, the BCGA and State boards met again to discuss the loan. By then, the State Board had fired Bacigalupo, parting ways with him after Bay City fired him as its special events coordinator on Nov. 1, 2023.
At the January meeting, new State Theatre Board Chairman Dan Dimitroff asked for an additional loan of $750,000 to pay off other debts the venue had incurred, the BCGA alleged.
During this discussion, Dimitroff claimed the $800,000 loan was fraudulent, and the State Board was unaware of it. This was the first time such an allegation had been made by a State representative, the BCGA stated.
Apparently baffled by the statement, a BCGA Board member asked how the State Board could be unaware of $800,000 being deposited into their account and payments made from it for three years.
The State Theatre filed for bankruptcy on March 1 of this year, claiming it owed $1.6 million to various creditors. The BCGA was owed the largest amount at $662,514.31, with the second largest amount of $157,243.44 owed to the U.S. Small Business Administration.
