With a unanimous vote at Peekskill City Hall on Monday, elected officials approved a 17-year lease deal that lets Red House Entertainment take over operations at the Paramount Center for the Arts, whose operations have been suspended since Oct. 4.

Under the new lease, Red House will oversee programming at the Paramount through October 2030 -- with an option to extend the deal through 2040.

"We're very happy to be reopening the Paramount theater," Mayor Mary F. Foster was quoted as saying in a statement released Friday night. "The new lease is strong, clear and allows for a healthy cash flow for both the operator and the city. It will provide a steady revenue flow to the city and will once again be an economic boon for our downtown."

But not everything has been settled just yet.

According to Bob Knight, a spokesman for the city, lawyers representing the city and Red House still are trying to work out an equipment deal with Key Bank, which is saddled with $500,000 debt from the Paramount's previous operators. Red House wants to buy the on-site equipment from Key Bank, but Key Bank would rather auction it off, Knight said.

"They worked out a temporary agreement to open the theater, using quote-unquote 'Key Bank's equipment,' and the details on that still have to be worked out," Knight added. "We're hopeful that it will resolve."

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Peekskill will cover the cost of utilities at the city-owned theater for the first six months and will claim 5 percent of the gross income from ticket sales for every show, according to the agreement. Red House anticipates generating $900,000 from October 2013 to October 2014, and $2.2 million in the following 12-month span, according to Knight. That would mean $45,000 in income for the city at the end of the first span and $110,000 at the end of the second.

Even if Red House doesn't quite meet those projections, the city stands to benefit more than it did from the previous lease agreement. Last year, the Paramount's previous operators paid $1 to the city and received a $50,000 donation from Peekskill, which also paid for the building's utilities, according to Knight.

Lease negotiations formally began March 11, about a month after a six-member search committee of city officials, business owners and community members unanimously recommended Red House over two other groups -- The Paramount Phoenix Group and Tarrytown Music Hall -- for the job.

Kurt Heitmann, a Peekskill native who heads the Red House group, has said he envisions the new Paramount as a for-profit music and entertainment venue, with a complementary but independent nonprofit arm dedicated to cultural enrichment and education. Red House provided the lone proposal with that kind of approach; Tarrytown and Phoenix offered solely nonprofit models.

Heitman was not present for Monday's meeting.

Red House is planning to reopen the theater with family programing within weeks, aiming to program 80 events in its first year and 200 in its second. The city is requiring Red House to stage at least 50 performances that first year. In year two, at least 100 shows must take place on the Paramount stage.

Heitmann expressed excitement for the deal in a statement released Friday afternoon.

"We're looking forward to working with the City of Peekskill ... as we reopen the Paramount theater," he was quoted as saying. "We're very pleased that everyone has gathered together to make this agreement happen. It's a great day for this vintage theater to be reopening in Peekskill and the Hudson Valley."

Red House's team includes Heitmann, a senior vice president for CP Communications; Jonathan Close, who works for the International Management Group; Ray Wilson, who has produced for TV, radio and stage; and Abigail Adams, who serves as managing director of the Hudson Valley Shakespeare Festival at Boscobel.

On Feb. 19, committee member Jason Angell, the president of the Peekskill Business Improvement District, told city officials that, among the three Paramount proposal finalists, Red House offered the best combination of vision, operating structure and financial planning and management experience.

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"We thought that their vision really tied in local businesses and community partners and would be a boon to local economic growth," Angell said at the time.

To celebrate the lease agreement, the city will host a news conference underneath the marquee of the Paramount, at 1008 Brown St., at 11 a.m. May 15.

The Paramount opened in 1930 as a movie palace. In recent years, the artistic hub on Brown Street has been known for hosting concerts and nonprofit programming. When the theater closed its doors in October, its operators at the time blamed economic difficulties, a dearth of donations and increased expenses for its closure.