City, developer shoot down Granada concept

City, developer shoot down Granada concept

The coffin that contains the Granada Theater might need a few
more nails, even after a discouraging report of the vacant
building’s current condition and the repairs needed to make it safe
for long-term use was presented to the city council.
The coffin that contains the Granada Theater might need a few more nails, even after a discouraging report of the vacant building’s current condition and the repairs needed to make it safe for long-term use was presented to the city council.

An analysis of the disrepair into which the theater has fallen over the years estimated that more than $5 million worth of renovations will be required to bring the building on the 17400 block of Monterey Road up to code.

The analysis was done by city staff and future downtown developer Barry Swenson Builder, and was based on previous engineering studies and a recent walk-through of the building. Their findings were presented at Wednesday’s city council meeting.

But those who support renovating the theater and using it as a live performing arts facility that shows movies on a single screen 20 days a month, and could attract visitors to downtown Morgan Hill for an evening of entertainment, dining, shopping and cocktails, think the study was incomplete and, in some aspects, wrong.

Meanwhile, the local nonprofit Save the Granada foundation is working on a local ballot measure to ask Morgan Hill residents if they want to restore the theater, according to foundation member Pamala Meador. And the foundation presented a letter to the council Wednesday, signed by more than 30 retail and dining establishment owners downtown, proclaiming their desire to reopen the Granada, which closed in 2003.

City staff was asked by the council to reexamine the Granada’s rehabilitation needs in April, when they selected San Jose-based Barry Swenson Builder to redevelop the parcel, as well as a downtown property just to the south on the corner of Monterey Road and Second Street.

While the foundation has presented a business plan for a renovated Granada Theater that indicates adequate revenue from a multi-purpose theater, the builder said the revenue assumptions are unsupported.

“We have not been provided with any data to back up their income assumptions, and we haven’t found any evidence in our research (that supports revenue projections),” said Jessie Thielen, BSB’s senior development manager. Without a more assured revenue stream to support the Granada Theater’s operations, the builder is not willing to purchase the site as they will under the council’s current plan to turn the block into a retail and residential development.

An analysis of similar theaters in California, including some designated as historic sites, found that most require subsidies from local governments, private entities or fundraising to stay open, or they are operating at a deficit, Thielen said.

Plus, the builder listed the extensive repairs that are needed to restore the building for long-term use and bring it up to code, including building bigger bathrooms, improving disabled access and strengthening the roof, walls and ceiling.

The project would also require the interior construction of new backstage areas and dressing rooms, as well as new mechanical and electrical systems and an automatic fire sprinkler system, according to city staff and the builder.

And the theater would siphon off parking from other areas downtown, requiring an additional expense of more parking options.

However, Granada supporters raised a number of concerns with the information presented Wednesday.

The study done by city staff and the builder, who also presented conceptual floor plans of a refurbished Granada, assumed both the renovated Granada Theater and a new multiplex next door would be in operation at the same time. Save the Granada is asking the city to abandon its plan for a new cinema on the corner of Monterey Road and Second Street in favor of a multi-purpose Granada.

Such a plan would eliminate the need for a new cinema, and would solve the parking problem, according to Save the Granada co-founder Stephen Beard.

The council still wants to re-establish a cinema option downtown, and the current plans, which have been in place for more than a year, call for a brand new multiplex on the 17300 block of Monterey Road, where Royal Clothiers now sits. BSB has signed on to complete that project.

A price of $5 million to reopen the Granada according to the nonprofit’s vision is “not that much money,” Meador said, and the foundation could raise the funds.

She added that the city’s and builder’s conclusions about the Granada were “predictable.”

“The staff is leading the council around by the nose,” Meador said.

While the recent analysis concluded that a live Granada would not make enough money to survive, Meador said nothing indicates a four-screen cinema – an unusual size for such a facility – would be financially viable either.

The draft language for a November ballot measure asking voters whether or not the Granada should be saved currently sits in the city attorney’s office for review, Meador said, though she declined to comment on the specific wording until it is approved.

“We’ve done everything we possibly could with the council to get them to understand the citizens want the Granada Theater to be saved,” Meador said.

The letter signed by the foundation and local businesses prefers the foundation’s plan over the city’s because it will bring more visitors downtown for longer periods of time than a new movie theater would.

No motion was made at Wednesday’s meeting to reconsider the current cinema plan. The council approved an “exclusive negotiating agreement” with Barry Swenson Builder to proceed with redevelopment on the two downtown sites, which includes a plan to replace the Granada with a multi-level mixed-use project.

The builder will host a “community engagement” meeting 7 p.m. Wednesday at the Community and Cultural Center, 17000 Monterey Road. Members of the public will be able to tell the developer what kind of tenants and building design they would like to see downtown.

Councilwoman Marby Lee, who asked in April for the project to be revisited, said Wednesday’s report convinced her to continue with the adopted plan.

“I’m willing to look at (refurbishing the Granada) if there’s somebody willing to do it,” Lee said. “But is it able to live on its own without subsidies? I want to believe it can, but (the builder and city staff) indicate it just doesn’t pencil out.”

Other council members noted that the Redevelopment Agency, which purchased the property in 2008, cannot subsidize the theater’s operation.

Mayor Steve Tate tried to encourage Save the Granada to channel their “passion and dedication” into the future cinema on Second Street, and help to incorporate the exterior sign, marquee and other elements of the Granada into that project.

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