The Tiffany Theater (left) and owners Stuart Fox and Andrew Solomon
There’s a lot to like about this small town in Custer County in central Nebraska; friendly neighborhoods, fine lakes and quiet rivers, the Sandhills -- and the all-digital 3-D capable Tiffany Theater.
The old white-washed front of the building in Broken Bow dating back to 1915 had been the destination spot on the brick cobblestone street for years.
But this town of a little more than 3,000 people was in danger of losing its movie theater, and the next-closest one was 60 miles away. The owners were packing up for another town and two theaters they’d just purchased, and the projectors and other equipment were heading out with them.
“They listed it for sale for two years," said Stuart Fox, one of the co-owners of the Tiffany. "If no one had bought it, they were going to take all the equipment from the theater with them when they left town. We couldn't let that happen."
But buying the theater six years ago in a partnership with co-owner Andrew Solomon six years ago was just the start. Both grew up in Custer County, and wanted to give their neighbors quality entertainment normally only available in a larger city.
"I thought we were an underserved market," Fox said. "I saw other communities that had two-screen theaters that were open all the time, and I thought, if they can do it, why can't we?"
Fox traveled the state extensively, finding towns in the state similar to Broken Bow supporting two-screen theaters open seven days a week. At the time, the Tiffany had its one screen open only three days.
“I said, if they can do it in Valentine, Nebraska,” referring to the north-central town near the South Dakota border, “we could do it.”
Under the company name Vulpes Corp. (the name comes from the Latin word for fox), the two set about installing a heat pump, which meant for the first time in nearly 90 years, the theater finally enjoyed air conditioning. They added offices to the upper floor, and renovated the entrance and ticket and concession area to “make it a little more welcoming.” In November 2008, they added a second screen.
Finally, in May 2009, with a $170,000 SBA Express loan for the newest digital technology available and a $240,000 7(a) loan under the Recovery Act to pay for renovations, the Tiffany Theater was ready for its grand re-opening. Neighbors marveled at the 92-seat theater upstairs and 120-seat one on the main floor, with maximum-sized screens, stadium seating with high-back rocker seats, and the newest digital projection and surround sound technology. And no more waiting weeks or a couple of months for a new release; now, Broken Bow gets to see new movies when they open nationwide.
Even better: the Tiffany Theater is one of the first two in central Nebraska with three-dimensional capability – which also meant the theater was one of the few in the state to show Kenney Chesney’s summer concert series in 3-D, drawing country music fans from larger Kearney and Grand Island to the small town.
Oh, and they offer Husker football on the big screen on Saturday afternoons.
Tiffany Theater offers alternative content servers in both auditoriums to show any type of digital media, and plans for overhead lighting means Broken Bow has a new site for business meetings, fundraisers, even birthday parties.
“I look it at as my community service,” Fox said. “We’re not doing this for the money, we just feel that it’s important for the community. I don’t ever intend to make a lot of money off the place. If I can hold it together that would be fine.”
That sense of giving back even extends to those who work in the theater. According to a story in the Grand Island Independent in July, Sam Troxel, a young Broken Bow High School graduate, won a $500 college scholarship from the North Central Unit of the National Association of Theater Owners.
And here’s the rest of the story: Fox is the vice-president of the Custer Economic Development Corp., and the president of Nebraska State Bank. When Vulpes Corp. needed to finance the theater project, he couldn’t very well go to his own bank’s vault and scoop up the needed cash.
“As an executive offer of the bank, you’re limited to (a certain amount) excluding the loan on your primary residence,” Fox said.
So the banker went across the street to Bruning State Bank, his competitor, for the loan.
“Broken Bow is a unique town,” Fox said. “We’ve got four, five banks, and we all get along just fine. It’s a friendly competition.”
Fox said the banker on the theater deal, Jim Scott, not only his is friend, but his wife works with Scott’s wife as a school teacher, and Scott’s family would frequent the theater. Many of the theater renovations were completed with volunteer work, and Scott was one of the volunteers.
“We feel it’s important we grow these rural communities,” Fox said, “and give people here the same opportunities they have in other communities. But we don’t want people to come here because it’s the only theater in Broken Bow. We want to earn their business.”
If you're a company in Nebraska importing key components of your small manufacturing business, there's a bunch of things that can mess up your supply chain, costing you money and perhaps even employees their jobs. Fortunately, thanks to a loan from the SBA, there's a small business in North Omaha which takes special care to smooth out those kinks in the chain.
New Venture Brokers, off 30th Street in Omaha's historic Florence neighborhood, is a woman-owned business which supports inbound shipments for around 80 different firms across the Cornhusker State each month. And from the moment you walk in their modest storefront, you know this is a different kind of business--for one, as they answer the phones and track shipments, there are a couple of pet cats roaming around the modest office furniture.
"We handle all the documentation to clear customs in the port of Omaha," explained co-owner Jill Lorsch, "but we can do the job for any firm in any location in the country." Some are big firms; many, Lorsch said, are "little guys who maybe do a shipment a month." Along with the firm's three co-owners, they also depend on another full-time employee and a part-timer to help with the paperwork.
Doing a little extra to help Nebraska businesses
Turning to the SBA to help with cash flow
It's an old-fashioned downtown, with a few eateries crowded along with some storefronts and clapboard houses as U.S. Route 30 winds through this town of about 3,000 people. But for hungry folks in Central City, a town about 25 miles north of Grand Island, they're about to get a choice in dining few in the wider area enjoy.
That's because restaurant developer Todd Carpenter is building a new Subway/Taco Del Mar franchise here; in the process, he'll create another six to eight jobs.
"By having this new concept branded with the Subway store, by doubling our parking lot, adding a drive through, adding seating, hopefully we will increase business," Carpenter said.
Stepping up to help franchise grow
While the Taco Del Mar brand got its start a couple of decades ago in the Pacific Northwest, the franchise grew too fast and went bankrupt last year. The founders of Subway stepped in, purchased the business, and opened up a new development opportunity.
Carpenter's territory includes about 80 percent of the counties in Nebraska and South Dakota, and over the past 20 years he's led the development of 158 Subway franchises in his area. While working for his first partner shortly after graduating high school in Gehring, he noticed the growth of Subway shops in Colorado and was eager to bring the restaurants to this state. Two years later, after taking his college savings, some cash from his grandfather, and a bank loan, Carpenter and his partner opened their first franchise in late 1989.
But Carpenter does more than negotiate the franchise agreements and lease for the restaurants and hand the keys over. He offers on-going support and operational guidance to make certain the franchisee succeeds in the marketplace. That's why he's sure the new joint restaurant concept will succeed.
"Taco Del Mar stores had failed in other parts of the state," Carpenter admitted, "They lacked buying power to support the brand and cost of doing business was prohibitive. People liked the food and the customers were passionate, eating there sometimes two or three times a week, but the cost of goods were too high." That's where Subway's buying power will let the venture compete with other brands in the crowded fast food category.
Carpenter partnered with a local couple, Jake and Amy Kleeb, who will own 50 percent of the Central City restaurant, and Amy will serve as the operating partner.
But to finance the land purchase and build the new restaurant with his partners, Carpenter sat down with Dustin Meyer at Archer Cooperative Credit Union, a small lender with four rural central Nebraska locations. The credit union had never made an SBA loan before, but Meyer would turn to the 504 program to close the deal.
"We do a lot of commercial deals in Central City, mostly agriculture entities," Meyer said. "We're a $54 million credit union, and 70 to 80 percent of our business is commercial because of the farming industry."
Nebraska District Office available to help with deal
Meyer would need help navigating the process of the 504 loan guarantee, and Mike Marsh, a lender relations specialist with the Nebraska District Office, made a face-to-face visit to Archer in April. The bank offered 50 percent of the loan; the SBA, through Lincoln-based NEDCO, a Certified Development Corporation (CDC), would provide another 40 percent through the bond market; Carpenter's development company would handle 10 percent in a down payment. Most important for Archer's bottom line--the credit union would have the first lien position on the property, significantly reducing its risk.
"Mike was happy to come out and tell us how it all worked," Meyer added. "We got this big list of stuff to do, background research on all of the partners, both personally and financially. But Mike at the SBA, and Jason (Herlitzke, vice-president of lending at the CDC) were very helpful. Would the deal have happened without the SBA's help? Not nearly as quickly. It would have been a lot more legwork if he hadn't come out to talk with us--and there's a possibility we wouldn't have done the deal because we didn't know how simple it could be working with the SBA and NEDCO."
As a result, the Subway/Taco Del Mar franchise was approved for $156,000 for the portion of SBA-guaranteed funds.
"I think using the SBA is a very good starting point for growth for our credit union," Meyer said. "I want more commercial entities aware of what we offer. If we can get it out there that we use the SBA guarantee, I'm sure we will have more businesses applying for them and using this opportunity."
And the structure of the SBA's 504 financing was crucial for the developer.
"With traditional bank financing," Carpenter said, "we couldn't have come up with the 30 to 35 percent down to acquire the land and build the building. With the low interest rate, the cash flow for the business makes good economic sense."
SBA helps improve U.S. 30 corridor
Meyer added the Subway/Taco Del Mar restaurant will be a great addition to the community.
"The lot they bought was in between two existing restaurants, replacing an old house from 1910 that was falling in on itself," the lender said. "There's been some money from the city for beautification of the highway frontage. It's looking a lot better now."
And, he added, the only other places for people craving Mexican food are a long drive off in Grand Island or almost an hour away in Columbus.
"What I'm passionate about as a developer is providing great opportunities for these franchisees to build their future," Carpenter said. "Like Amy, for example. She started out as a store manager, and she borrowed money, dug into her savings and got into ownership. As I've helped Subway grow, and helped people who leveraged their savings, it's been a blessing that the government has continued to help small business people expand. SBA programs are wonderful in that sense."