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ROCHESTER — A lauded downtown landmark will soon open its doors once more.

Threshold Arts is poised to take over operations at the Chateau Theater this month to create a multi-use venue organizers hope will become a community space.

"We want to be a place where people can just come in and hang out and maybe learn something along the way," said Naura Anderson, founding director of Threshold Arts.

The arts organization has plans for gallery exhibitions and retail space, lounge areas, a stage, and even a space to show movies. Anderson said the goal is to keep Chateau Theater open to the public as many days as possible, though the space will also be available for private rentals and community events.

The city of Rochester still owns the theater, however. Per a three-year agreement the Rochester City Council unanimously approved Monday night, Threshold won't have to pay rent and the city will take care of up to $2,900 in utility costs each month. Threshold will share 10% of rental revenue with the city.

Rochester has the option to buy Threshold out of the deal if the city decides to use Chateau Theater for other purposes, but local leaders say they have confidence in Threshold's plans.

The deal resembles an agreement with the theater's previous operator, Exhibits Development Group (EDG), which opened the building in November 2019 with a plan to bring traveling exhibits to the community.

The COVID-19 pandemic dashed EDG's plans as Minnesota's lockdown and regulations diminished foot traffic in downtown Rochester. Despite a few events in the interim, the strain ultimately led to the city and EDG scrapping their deal in 2021.

The council chose Threshold to operate the theater in January out of three proposals for the historic site.

Some council members on Monday shared concerns over how the city would recoup costs, but all agreed to move forward with the deal. City officials say the building is tax-exempt, and City Council member Shaun Palmer pointed out Threshold's events will help bring in money to maintain the landmark.

"We just need to move on and, I think, hope that we make lots of money on this or activate it a lot," he said.

Threshold's penchant for partnering with community groups will help the arts organization avoid similar troubles to EDG's, according to Holly Masek of the Rochester Downtown Alliance.

"It's pretty unique in Rochester," Masek said Monday afternoon. "There's no other place like it."

The theater opened in 1927, hosting vaudeville shows and movies. It was named to the National Register of Historic Places in 1980. The space has undergone changes over the years, from a flagging venue space in the 1970s to a unique Barnes & Noble store from 1994 to 2015.

The city of Rochester bought the building in 2015 for $6 million with help from Destination Medical Center and Mayo Clinic. City officials have explored uses for the space in recent years and worked out a deal with EDG in 2019.

The Destination Medical Center board is expected on Wednesday to approve $250,000 for infrastructure work at the theater this summer, which Anderson said includes bathroom remodels, acoustic improvements and stage sound system upgrades.

While Threshold plans to open the Chateau as soon as possible, Anderson said the organization won't host a grand opening until mid-fall once the upgrades are done. Threshold ended its lease at The Castle in April, but plans to keep its Broadway Avenue S. space open.