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Greater Latrobe School District challenges Cabaret Theatre’s tax-exempt status | TribLIVE.com
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Greater Latrobe School District challenges Cabaret Theatre’s tax-exempt status

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Ken Reabe Jr. | For The Tribune-Review
Cabaret Theatre owner John Carosella looks over renovations to the box office area on Thursday, July 6, 2017, in Latrobe. The Greater Latrobe School District has appealed the theater's tax-exempt status, arguing that it is not operational and therefore doesn't qualify as a 'purely public charity.'

As far as the Greater Latrobe School District is concerned, if the Cabaret Theatre isn’t bringing patrons in the door, it should be sending taxes out the door.

The Cabaret Theatre in Latrobe has had to clear several hurdles the past three years, including issues with the deed for its building and the discovery that city officials had no building plans on file for the Main Street site.

Since theater owners John Carosella and John Horanic were unable to host performances at their building, the 2015-16 season took place at the Latrobe Art Center. Recently, they started the Cabaret Theatre Neighborhood Arts Troupe, working with home-schooled students and staging productions throughout the city.

The lack of theater-related activity in the actual building, however, has spurred the Greater Latrobe School District to appeal the Cabaret’s tax-exempt status.

“They’re not providing any public charity in the sense that they’re not operating,” said attorney Ryan Cribbs, representing the school district in its appeal.

The appeal contends that the Cabaret does not qualify as a “purely public charity.”

“The grant of exempt status is improper in that the (theater) was not operating and thereby advancing a charitable purpose as of the time of the board hearing,” the appeal reads.

Carosella said that while the theater has cleared several hurdles, this may be the highest yet. “When you have to generate enough revenue for taxes along with all the other expenses of theater, it really makes it hard, particularly in the first few years of operation when you are building your audience and reputation,” he said.

In addition to the deed and building plan issues, the desire to use all three floors of the building required installing a sprinkler system, and a lack of funding has stalled renovation work for nearly two years, according to Carosella.

The building was acquired from I.P. Enterprises in 2015 for $1, according to county property records. The last tax payment was $4,319 in 2014, according to the school district’s tax office.

This year, taxes on the property would be about $4,562, tax office staff said.

Theater officials contend that while they aren’t able to bring audiences into the building, they are fulfilling their mission of bringing theater productions to Latrobe.

In November, the Neighborhood Arts Troupe produced an original Christmas show called “The Stranger” in Latrobe’s Huber Hall and in May staged “Alice in Wonderland, Jr.” at Latrobe United Methodist Church.

“We are committed to establishing the company in Latrobe,” said Horanic, “and we really feel that working with these young people is a good way to grow our reputation.”

Carosella agreed.

“I really don’t understand how we are not a public charity when we are dedicated to providing good quality, affordable theater to our region and even scholarships for our classes,” he said.

Not challenging the theater’s nonprofit status “on a building that’s no longer operating, we feel like it would set a horrible precedent,” Cribbs said. “Someone could come in, buy a building under nonprofit status, not provide any charity under Pennsylvania law, and have tax-exempt status while they’re fixing up the building.”

In addition to raising about $17,000 through a GoFundMe campaign, Carosella and Horanic said they’ve personally invested more than $100,000 in the Cabaret Theatre.

“Basically, we’ve invested all that we have in pursuing this dream, and we would have had enough funding if we had opened our doors in June of 2016 as we had planned,” Horanic said. “But now after so much downtime, unless we can get our sprinklers funded and settle this (appeal) nonsense, we won’t be able to hold on much longer. It’s a simple fact.”

Patrick Varine is aTribune-Review staff writer.

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