Amusement tax dispute resurfaces as Roxian resumes concert schedule
By Jamie Wiggan
Following news that live music is set to resume at the Roxian Theatre this fall, debate has resurfaced over the venue’s local tax obligations to McKees Rocks.
Mayor Jack Muhr raised the issue during consecutive public meetings June 14 and 15, where he argued forcefully the concert venue should not be permitted to reopen until it pays a backlog of amusement taxes.
“I say, shut them down,” Muhr said after painting the owners as predatory investors taking advantage of the community.
Interviewed later, partners at Roxian Live disputed Muhr’s account, and said they’re puzzled by his hostility to a business venture billed as a development catalyst for the struggling town. In particular, they took issue with his insinuation they were profiting from the business at the borough’s expense.
“We put in a $9 million investment in the middle of McKees Rocks with several million dollars of our own money,” said Sanj Katyal of Roxian Live Partners.
The partners say they’re more than $3 million in the hole since opening in 2019 and were struggling to turn a profit even before the pandemic placed live music events on hold for more than a year.
Disputes over the amusement taxes first arose within a few months of the venue’s opening.
Once again both parties offer different narratives.
Katyal said when the deal to relaunch the theatre was pieced together through a public-private partnership with the borough and several other stakeholders, borough representatives gave verbal assurances the amusement tax wasn’t enforced despite being on the books, and would not be applied to concert sales at the new venue. Shortly before opening, he said the partners received notice from Borough Manager Ruth Pompey they would be billed 10% on all ticket sales.
“It was represented to us that there was no amusement tax — that was a competitive advantage for coming to McKees Rocks,” Katyal said.
Several months later, the venue was billed for back taxes owed since opening, and the two parties have been working to reach a settlement since then.
Muhr said no such assurances were ever given by borough representatives, and blames the McKees Rocks Community Development Corporation (MRCDC) — which helped broker the investment deal — for wrongly communicating this on their behalf.
According to all parties, written records created during the decades-long public-private partnership show little about how the amusement tax issue would be enforced at the theatre.
Other venues in town either had negotiated agreements with the borough or did not pay taxes prior to the Roxian’s opening.
During the June meetings, Muhr also railed against smaller venues Rocks Landing and Black Forge Coffee for not paying amusement taxes and suggested putting them up for Sherriff sale.
The borough ultimately voted to amend its amusement tax rate to 5% in September 2020, but disagreement remains over how to settle any taxes owed before the new rate took effect.
Representatives from both parties recently met to discuss a settlement deal, but it fell through after.
“We met with the President and Vice President, with their solicitor, reached an agreement and then were told two weeks later it wouldn’t work,” Roxian Partner John Sieminski said.
“They gave us no indication themselves that they were unhappy with the offer… We thought we had a deal.”
President Archie Brinza said when he and Vice President Leslie Gee took the offer back to council, it was “unanimously” turned down by the other members.
Brinza distanced himself somewhat from Muhr’s fiery rhetoric, but still indicated he’s taking a hard line against the venue.
“We are diligently working on this,” he said.
Standing up for Roxian Live, Councilmember Sarah Harvey urged her peers to be patient and cooperative with the new business venture.
“The live industry was shut down — they could not operate,” she said. “We’re picking and choosing what businesses we want to shut down.”
Roxian Live say after being brought to the brink of bankruptcy during the past 12 months, they remain optimistic about resuming business in the fall and reaching an agreement with the borough.
“We have every intention of reopening the Roxian and reaching an agreement of good will with the borough,” Katyal said.