VIRGINIA CITY — Two historic Virginia City businesses have closed their doors after failing to reach agreements with the state over significant lease increases for operating in state-owned historic properties.
Bill Koch, who has operated theater productions in Virginia City's historic opera house for the past 14 seasons, announced the closure on Jan. 11th after negotiations with the State of Montana failed. Koch's connection to Virginia City's arts scene began when he studied theater at Montana State under former actors with the Virginia City Players.
WATCH: Virginia City opera house shuts down as owners can't afford 15% state lease hike
In the 1980s, Koch was hired by Sue Bovey, who owned the historic space before Montana took ownership in the 1990s. Bovey hired Koch under the condition that he would end each show with her late husband's favorite tune.
"Every time I directed a show, I always ended with 'Yankee Doodle Dandy' which drove a lot of the young people crazy because they didn't understand why," Koch said.
Koch and his wife, Christina, along with their son Errol Koch, made the difficult decision to close after the state implemented a 15% lease increase. The family has started a new theater production company that they plan to take on the road.
"It costs so much for us to operate this theater, and they never even looked at our expenses when they put this 15% increase on this," Koch said.
The theater operator expressed concern about preserving the venue's historical significance under new management.
"My biggest fear is... by us not doing the theater anymore, will they find somebody that is interested in the history of the opera house?" Koch said.
Koch emphasized the cultural importance of these businesses beyond their financial impact.
"I don't think that the state has taken into consideration that a business is not just a money entity. It is the heart and soul of this town," Koch said.
According to the state, all open concessionaire spaces are being advertised, and the majority of businesses have accepted the new lease contracts. Two other Virginia City businesses are pursuing legal action as they attempt to negotiate.
"Commerce and MHC's goal is to first keep as many current lessees and concessionaires in place if possible, and then to fill as many vacant properties that are or may become available to ensure stability for MHC, Virginia City, Nevada City and Reeder's Alley," said Mitch Staley, chief marketing officer for the Montana Department of Commerce.
This closure follows a pattern of business owners struggling with the lease increases that I reported on one month ago. The other business that could not reach a lease agreement with the state is the Star Bakery and Restaurant in Nevada City. Please follow along as I interview business owners who are taking legal action to try to keep their businesses in operation for the summer of 2026. The story will air on Jan. 14th.
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