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On Monday, June 29th the City of El Cerrito approved the Rialto Cinema Theater chain's proposal to own and operate The Cerrito Theater, which was the creation of Catherine and Kyle Fisher, the owners of the now-closed Parkway Theater and the executives behind "Downey Street Productions." According to El Cerrito Redevelopment Agency records, Downey Street Productions failed to pay timely rent after doing so for the first 12 months of operation of The Cerrito Theater.
The Cerrito Theater
(A personal side note: it's very painful to see Catherine and Kyle Fisher's business problems presented this way in public, but that is one downside of working with a redevelopment agency: the public gets to see the information, both good and bad. But a detailed read of the letters explains that they, working as Downey Street Productions , got into a debt problem after theater construction costs. In a letter dated January 27, 2009 The El Cerrito Redevelopment Agency Chairperson Willian C. Jones II asked for a business plan explaining how Downey Street was going to recover from these problems - whereas the agency would alter the lease agreement to give them a fighting chance - but from the letter, the agency states that Downey Street Productions had not given a compelling financial picture or given them "frank communication" regarding their financial problems. Eventually, Downey Street Productions worked with the agency to pave the way for a new operator to enter the picture.)
According to a source with the Rialto, which owns and operates the Lakeside Theater in Santa Rosa and the Elmwood Theater in Berkeley, they're working at a feverish pace to open "The New Cerrito Theater" and show the new Harry Potter movie by July 15th. But here's my question: is The Oakland Parkway Theater, located on 1834 Park near E. 18th Street, next on the Rialto's list?
Well, the answer is no. But contained within that "no" is the process I said should be used for the Parkway Theater: find a number of different developers and operators, not just one as in the Parkway's example of the Motion Picture Heritage Corporation.
In El Cerrito's case, that city's Redevelopment Agency issued what are called "request for proposals" to 15 potential theater operators; 3 responded, and the Rialto was selected. All of that happened after that nasty period of talks between the agency and Downey Street Productions I discussed above, where the agency asked for past moneys owed, Downey Street Productions responded with the threat to close The Cerrito Theater, and eventually the two sides agreed to find a new operator (again, this is public record, click here to see the agency's website for details).
Now, Councilmember Pat Kernighan may say that the Parkway Theater is not in a redevelopment area, whereas The Cerrito Theater is. But there's no provision in the portion of the California Health and Safety code that limits a redevelopment agency from acting outside of its project area to some extent. For example, under Section 33678, subdivision (b), the redevelopment agency can use its tax increment revenues to provide services, for example, the removal of "crack houses" as now former Oakland City Manager Henry Gardner told me was done in Oakland in 1983 (this in a conversation he and I had when I was an intern to the Oakland Redevelopment Agency in 1987). Moreover, it can give loans to the City of Oakland. And it can establish a redevelopment survey area, which is really what's needed in the case of the commercial area around the Parkway. If one knows redevelopment law and procedure, a creative way can be found.
But to keep it simple, my point is the Oakland Redevelopment Agency can help by finding potential new theater operators and developers for the Parkway Theater. Right now there's a game played where Motion Picture Heritage Corporation (MPHC), out of the small town of Shelbyville, Indiana, thinks it holds all the negotiating cards; some involved in the matter of securing MPHC fear they may pull out of the deal for reasons as small as "internet coverage" (I'm not kidding.)
MPHC should be placed in a competitive situation such that it can't make such threats and scare the councilmember and others into a terrible deal. What should be done is this: restart the process, create a new "satellite redevelopment project area" around the Parkway that's fiscally connected to the downtown Oakland project area, locate potential theater operators and developers locally, regionally, and nationally, issue RFPs, and select the best proposal from those sent.
My Rialto source explained that they received an email from the "I Love The Parkway" group, but they did not want to take on two theaters at this time. But "I Love The Parkway" took the right action in reaching out to a theater operator; some have gotten upset with their actions, thinking it would wreck the MPHC deal process, but what the councilmember and other should have done and can still do is enlist their help rather than push them away. If the MPHC is "wreckable" then I'll channel Gordon Gekko and say "Wreck it because it's wreckable!" If it's not happening, punt, and even if its working have the plan I'm advocating as a backup should it fail.
(And another thought: Motion Picture Heritage Corporation's theater experience rests in their home town of Shelbyville; they don't know the Bay Area at all. By contrast, The Rialto Cinema minders do business here. The point is to find developers and operators in the region first before allowing an outsider to enter into negotiations.)
It's not personal, it's only business.
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