Jury Rules Against Rochester in Lawsuit Over the Chateau Theater

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Rochester, MN (KROC-AM News) - An Olmsted County jury has awarded more than $335,000 in damages to a St. Paul firm that was hired by the city to operate the Chateau Theater prior to the start of the COVID pandemic.

The damages were awarded to Exhibits Development Group after the jury found the city was in breach of its contract with the company, which was eventually terminated by the city. In its deliberations, the jury also decided the city did not act dishonestly in the performance of its obligations under the contract to operate the historic theater in downtown Rochester.

The verdict was handed down late Friday in a trial that began on Monday with jury selection in Olmsted County Court. It's not yet known if the city will appeal the decision.

EDG filed the lawsuit against the City of Rochester last year, claiming it had incurred damages while trying to open and operate the Chateau Theater. Court documents filed by the company placed most of the blame on the city.

The operating contract was entered into by the two parties in August 2019. According to EDG, the city "conspicuously left out and in fact hid, numerous issues that the Chateau was experiencing" and those issues ultimately led to its inability to successfully operate the building.

The lawsuit also claimed the city "agreed to deliver possession of the Chateau and perform all capital improvements within 60 days of signing the Operating Agreement." EDG claimed the opening was "delayed several times due to the City's failure to meet its obligations under the Operating Agreement."

After a shutdown caused by the pandemic in early 2020, the Château Theater reopened in June of that year. Its operations were soon hampered by the Peace Plaza renovation project, which ultimately led to another closure before the contract with EDG was terminated in June 2021.

Last summer, the City of Rochester entered into a three-year agreement with Threshold Arts to operate the Château Theater. The city has also launched projects to refurbish and enlarge the facility's restrooms and improve the sound system in the building.