ROCHESTER – A highly acclaimed downtown landmark will soon reopen its doors.

Threshold Arts is poised to take over operations at the Chateau Theater this month to create a multi-purpose venue that 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 films. Anderson said the goal is to keep the Chateau Theater open to the public for as many days as possible, although the space will also be available for private rentals and community events.

However, the City of Rochester still owns the theater. Under a three-year agreement that Rochester City Council unanimously approved Monday night, Threshold will not have to pay rent and the city will cover up to $2,900 in utilities each month. Threshold will share 10% of rental income with the city.

Rochester has the option to buy Threshold out of business if the city decides to repurpose the Chateau Theater, but local leaders say they have faith in Threshold’s plans.

The deal is similar to an agreement with the theater’s previous operator, Exhibits Development Group (EDG), which opened the building in November 2019 with plans to bring touring exhibitions to the community.

The COVID-19 pandemic dashed EDG’s plans as Minnesota’s lockdown and regulations decimated pedestrian traffic in downtown Rochester. Despite a few events in the meantime, the strain ultimately led to the city and EDG canceling their deal in 2021.

The council selected Threshold from three historic site proposals to operate the theater in January.

Some council members expressed concern Monday about how the city would recoup the costs, but all agreed to go ahead with the deal. City officials say the building is tax-exempt, and councilor Shaun Palmer noted that Threshold’s events will help raise money for the landmark’s preservation.

“We’ve just got to keep going and, I think, hope that we make a lot of money out of it or activate it a lot,” he said.

According to Holly Masek of the Downtown Rochester Alliance, Threshold’s penchant for partnerships with community groups will help the arts organization avoid problems similar to EDG.

“It’s pretty unique in Rochester,” Masek said Monday afternoon. “There is no other place like this.”

The theater opened in 1927 and hosts variety shows and films. It was listed on the National Register of Historic Places in 1980. The space has transformed over the years, from a ramshackle venue in the 1970s to a unique Barnes & Noble store from 1994 to 2015.

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

The Destination Medical Center Board is expected to approve Wednesday $250,000 for infrastructure work at the theater this summer, which Anderson said will include bathroom remodeling, 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 complete. Threshold terminated its lease at The Castle in April, but plans to keep its Broadway Avenue South space open.