The news leaked out (or was leaked) recently: Medley Centre developer Scott Congel plans to build the Rochester Broadway Theatre League a new 3,000-seat theater.

Congel and RBTL have an agreement in principle on the deal, though the two parties are still hashing out a long-term operating agreement. The deal's basic terms, however, are in place.

Congel didn't return calls, but RBTL board chair Arnie Rothschild says that under the agreement, Congel will build the theater as part of his Medley Centre redevelopment project. RBTL, in turn, would lease the facility and use it to present large touring productions. The deal would fulfill a long-held goal of RBTL officials: a bigger, state-of-the-art theater for the organization to operate. RBTL wouldn't own the theater and the organization wouldn't have to raise money to build it.

Congel would pay off the approximately $1.4 million debt on the Auditorium Theatre, which RBTL owns. He would also pay for renovations to the Aud, which RBTL would continue to own and use for smaller performances.

"Obviously, [Congel's] got a lot of stuff that he's got to get done," Rothschild says. "But this is pretty exciting for our community."

But if the theater proposal sounds too good to be true, there's reason. The whole thing hinges on Medley Centre's redevelopment, a project that some observers are skeptical of. Congel bought the property in 2008 and for the past several years, it's sat idle, with only two department stores operating. Congel hasn't yet secured financing for the project, and hasn't fully met the terms of a tax-incentive agreement with local governments.

Rothschild says he expects Congel to break ground on the project this spring; RBTL would start performances two years after. And Rothschild says he's confident that Congel will get the project done.

"I would point to the success that his family has had all over the Northeast in everything they've done," he says.

The Congel family has developed successful malls around the Northeast, including the upscale Walden Galleria in suburban Buffalo and Destiny USA in Syracuse (although in smaller scale than was originally proposed).

Congel, however, is redeveloping Medley Centre outside of his family's firm.

Rochester Broadway Theatre League has been trying to get a new theater for more than a decade, and several prior proposals — including one that was part of the former Renaissance Square project and a more recent proposal for the Midtown site — never made it off the ground. A larger theater would attract newer touring shows, Rothschild says.

He says that RBTL wants Rochester to have "the kind of venue where everything comes here right off Broadway."

The Medley Centre proposal provides other benefits, compared to the Auditorium Theatre, Rothschild says. It's more accessible to the semis that carry travelling productions from town to town. The parking is easier to access and more of it is available. And the theater would be built to accommodate the type of large productions RBTL brings in.

The Auditorium Theatre's cramped stage is an issue for a lot of productions, Rothschild says.

The Aud would still be owned and programmed by RBTL. It'd be renovated so that it has fewer seats — 1,500 as opposed to 2,400 — and it would be air conditioned.

Rothschild says there are plenty of shows better suited for a 1,500-seat theater. They wouldn't be Broadway blockbusters, but rather less-produced shows like "Nunsense" or other types of entertainment like comedy or dinner theater, he says.

"The product is pretty limitless," he says.

Medley Centre has displayed indications of struggling, but recently the project has shown a sign or two of life.

Congel has made the yearly payments required under his PILOT agreement — an in-lieu-of-taxes agreement — with the Town of Irondequoit, the East Irondequoit school district, and COMIDA, the Monroe County industrial development agency.

But that agreement contains investment and construction milestones, and Congel has to pay penalties if he misses them. The first milestone passed in April, at which point the developer was supposed to have invested $90 million. Congel submitted documents claiming he invested $93 million, and COMIDA agreed with his assessment. The East Irondequoit school district did not, however.

Last week, the district voted to execute the provision of the PILOT agreement that requires Congel to make a supplemental penalty payment. The board says he owes $827,722, of which $550,000 belongs to the school district.

"It's our obligation to enforce the PILOT," John Abbott, the district's deputy superintendent, told the board just prior to its vote.

The next day, during its regular monthly meeting, the COMIDA board voted on a measure to extend the milestones by three years. The measure also gives Congel six months to pay $3 million he owes into escrow; $500,000 is for the Town of Irondequoit and $2.5 million is for COMIDA.

Last week, Abbott said the school district isn't sure how the COMIDA move affects its pursuit of the supplemental payment. And, he said, the district maintains that COMIDA can't change the terms of the PILOT agreement without getting the town and school district's permission.

COMIDA tried to make a similar change previously, but after the district threatened to sue, it rescinded.

At last week's COMIDA meeting, Eugene Caccamise, president of Bricklayers and Allied Craftworkers Local No. 3, mentioned a potential investor for part of Medley Centre. Representatives from the AFL-CIO's Housing Investment Trust have talked with Congel about investing in a 40-story apartment complex on the Medley Centre site, says Caccamise, the building trades' representative on the COMIDA board.

The Housing Investment Trust is essentially a mutual fund. It invests union pension funds in housing projects — particularly affordable, senior, and special-needs housing — with the goal of making some money back. It also expects that union workers would do the construction work. Last week, a spokesperson for the trust said she wasn't aware of any involvement with the project, but that an investment typically wouldn't be announced until it's final.

Caccamise also spoke about Congel's credibility as a developer, and said he's been involved with successful projects across the Northeast. The East Irondequoit school district, he said, is putting obstacles in Congel's way.

"I think [Medley Centre's] going to move forward," Caccamise says. "He's pushing it very hard."