Odeum Promissory Note Not Time-Limited

There is an apparent discrepancy between the language in a 1991 promissory note for the Odeum theater and what Odeum board member and lawyer Jeff Gladstone said last month about the board's obligation to pay off that note.

“At this point there is no legal obligation to pay back the note," "We are the owners of the property. There is no question to a certainly that we own the property."

The promissory note filed with the $500,000 mortgage for the Odeum theater on Dec. 31, 1991, does not have an expiration date. EG Patch obtained copies of the note and mortgage deed from the Town Clerk's office. According to the note, payments must be made until the sum is paid “at or after maturity.” (The full text of the note is printed below and a copy is attached, left.)

Board President Frank Prosnitz referred questions about the mortgage to Gladstone, who did not return phone calls Wednesday.

Persistent questions about ownership of and any possible mortgage on the theater, closed since 2008 but readying to reopen this fall, prompted the Odeum board to have a title search done on the property earlier this year.

Pilgrim Title, the company that undertook the search, turned up four owners, according to Gladstone: the Odeum Corp., which owned 71 percent, and three grandchildren of Blanch Erinakes, who owned the other 29 percent.

The title search does not include mention of the promissory note and mortgage deed on file in the Town Clerk's office

Stephen Erinakes, son of Blanch, has disputed Gladstone’s findings. “In their mind, they acquired a piece of property for nothing,” he said in July.

On Friday, Erinakes said he was having his own title search done. “I’m just very disappointed with the way they handled it,” he said. “I put this into a mortgage situation so we could get the nonprofit status. If it had failed in two or three years, at least I wouldn’t have lost the building,” he said, referring to the decision in 1991 to establish the theater as a nonprofit.

Erinakes said his sister’s three children were given parts of the theater in the 1980s as a way to reduce the size of his mother’s estate (parents and grandparents are allowed to “gift” a certain amount of their estate to children or grandchildren each year, in order to reduce the size of an estate).

When, in 1991, they came up with the idea of establishing the theater (which had been a movie theater in recent years) as a nonprofit performance venue, Erinakes said his mother liked the idea.

“Mother was all excited that it would still be used for entertainment,” Erinakes said. He never pressed for mortgage payments, he has said, because “I knew the theater didn’t have a dime in the account.”

He said he thought the grandchildrens' portions had been transferred to the newly established nonprofit.

Initially, Erinakes and Philip Sidil were president and vice president of the Odeum board. Frank Prosnitz joined early on and has acted as president of the board for many years. The theater closed in 2008, unable to afford renovations required after strict fire regulations were put in place following the Station nightclub fire that killed 100.

The Town of East Greenwich decided to put the Odeum back on the tax rolls in 2009 and sent the corporation a $20,000 property tax bill. Erinakes and Prosnitz appeared before the Town Council to seek time to reorganize and reopen, retaining nonprofit status.

Since then, the Odeum board has undergone a significant transformation, with several new members. Erinakes himself is not on the board, but Prosnitz said Wednesday he is always welcome.

"I’d like him to be involved in the project," said Prosnitz. "Steve has been very valuable in the past."

Erinakes, meanwhile, said he will wait for his title search to be done. "The sad thing is," he said, controversy "will turn off potential donors."

Text of the promissory note:

                                                                                       December 31, 1991
… after date for value received, I/we promise to pay Blanch M. Erinakes or order, five hundred thousand ($500,000) dollars, with interests at the rate of 8 per cent per annum, payable in 180 equal monthly installments till said principal sum is paid, whether at or after maturity, and all installments of interest in arrears, wheterh before or after maturity, to bear interest at the rate aforesaid till paid.
                                                                                       Odeum Corporation
                                                                         By: Philip H. Sidil [signature]
                                                                                       Title: Vice President