Closing time – Silverton’s Palace Theatre shuts down (again)

January 2023 Posted in Business

By James Day

The iconic Palace Theatre (spelled “Theater” in recent years) in Silverton has shut down and its future is up in the air.

Erik and Rachelle Gonterman, who have operated the theater since 2020, are engaged in an acrimonious dispute with the landlord, Marjorie Eng, and when their contractual obligation to show Avatar: The Way of Water ended Jan. 12, the Gontermans closed the doors.

“We have no predictions about when or if the [P]alace will reopen,” the Gontermans said in a Facebook post. “At this point we will be surprised if it does as a movie theater. To replace everything will be a huge investment for someone new [and] in this age of the small independent theaters closing because of lack of revenue, no new movies and studios not wanting to work with them, we just don’t see someone taking on a losing prospect.

“After rent and utilities and equipment payments in a building with no air conditioning and the heat from an ancient boiler, there was zero left to go towards any kind of profit, or wages.”

The Gontermans own the projector, screen and sound system, thus the requirement that any new operator replace those items.

The dispute concerns allegations that the Gontermans failed to pay rent and that the landlord, Marjorie Eng, had engaged in disruptive behavior. The Gonterman’s side of the story is contained in the Facebook post and an additional post of a letter from their attorney to Eng.

The lone response from Eng has been to note via email to Our Town that “my intention for the Palace Theatre is not only to thrive, but prosper.” On the advice of her attorney, Eng said, she could not elaborate on her comment.

The Palace has been in Silverton since 1936. It has gone through a fire and a pandemic. For much of its existence it was operated by Stu Rasmussen and Roger Paulson. Rasmussen was known for dressing as a movie’s character, taking tickets as a commodore for Titanic and as Queen Amidala for the Star Wars movie The Phantom Menace. Rasmussen, who also served as mayor of Silverton, died in 2021. Paulson passed away in 2022. 

The Gontermans took over in October of 2020, although the pandemic prevented them from showing a movie until April of 2021.

“I am disappointed to hear about the closing of the Palace Theatre,” said Silverton Mayor Jason Freilinger. “I feel it is historically and culturally a very important part of our downtown. I am aware of some of the issues that have led to this situation. I will reach out to the Palace owners and the landlord to see if there is a way to keep the Palace open. I don’t know if there is a way to do this, but I feel it is important enough that we need to try.”

The Palace was one of the few one-screen movie houses in the Mid-Valley. Stayton, Dallas and Albany also have them. Economies of scale have shifted the advantage to multiplexes, while the pandemic and the success of streaming services also have made it harder on the one-screen mavericks.

“A theater is a treasure for a small town, a great draw for residents and visitors alike,” said Stacy Palmer, executive director of the Silverton Chamber of Commerce. “Especially when it’s as charming as the Silverton Palace has been. When it comes to activities that keep folks here in town, there is nothing better than a hometown movie theater.”

Like the mayor, Palmer was not sure what the community can do at this point.

“It appears each party has drawn their proverbial line in the sand,” she said. “If the tenants own all the equipment to operate as a theater (projector, screen, etc.) it may make it cost-prohibitive for anyone else to come in and try to operate it as a theater. I’m sorry the two parties couldn’t come to some understanding.  An empty building is not only an eyesore – but surely doesn’t help a landlord pay their bills either.”

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