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FIRST NATIONAL CORPORATION OF BOSTON 41
by transferring the ownership of the Keith Memorial Theater from the B. F. Keith Corporation to the Greater New York Vaudeville Theaters Corporation in exchange for other theater properties of equal value. The Keith Memorial Theater Corporation was organized under Massachusetts laws, therefore, to acquire the leasehold estate with the new theater constructed thereon, and became a subsidiary of the Greater New York Vaudeville Theaters Corporation. With the new issue of bonds, the capitalization of the Keith Memorial Theater Corporation was as follows:
First Mortgage Leasehold 15-year Sinking Fund 6%
Gold Bonds $1 ,500,000
Preferred Stock, 15,000 shares 7% noncumulative 1 ,500,000
Common Stock, no par value 10,000 shares
All the preferred and common stock was owned by the Greater New York Vaudeville Theaters Corporation.
The bonds were secured by a direct first (closed) mortgage on a ground lease of land with the new theater erected thereon. The lease extended nearly 40 years beyond the maturity of the bonds. The land was assessed in 1928 for $1,407,800, the book value of which was $2,240,000; the net rent, reserved under the lease, was $87,400 a year to October 1, 1942, and $88,900 to October 1, 1943, included in which was an item of rent of S 10,000 a year, for a parcel of land used as the Tremont Street entrance, which might be subject to revision after January 1, 1935. The ground lease was appraised at $500,000; with a lease of so long a term, it was possible to consider the entire value of the building in the appraisal. When the bonds were issued, there remained two months of construction for completion. The cost of the theater at completion with furniture, furnishings, and equipment was estimated at $5,000,000. Construction costs on the new theater to August 31, 1928, amounting to $2,773,471.74, were taken as appraisal value, which, with the leasehold value, gave a total mortgaged property value of $3,273,471.74. Bonds would accordingly be outstanding to the extent of 45.8% of the property value. Massachusetts law limited mortgages to 60% of the appraised value.
In a letter to the First National Corporation of Boston, dated November 9, 1928, the president of the Keith Memorial Theater Corporation stated: