Balboa to House Stores, Museum : Acquisition of Theater by City OKd

Over the protests of preservationists, the San Diego City Council on Tuesday approved a plan to acquire the historic Balboa Theater, gut the interior and turn it into a retail center and art museum.

The decision was a victory for arts patron Danah Fayman, who had spent two years and more than $500,000 planning the San Diego Art Center, a museum of modern architecture and design to be housed in the dome-topped, art deco-style theater at 4th Avenue and E Street.

Her new museum and a complex of retail shops to be built on the remodeled ground floor of the theater are expected to be another drawing card for the Horton Plaza shopping center, the major downtown redevelopment project which is to open just west of the theater in August.

Shortly before the council’s 5-2 vote, a dozen members of Save Our Balboa, a group that has fought to preserve the old theater, told the council that it was making a serious mistake.

The theater “can be preserved for less than it can be condemned,” architect Donald Reeves told the council. “All over the world people travel to see historic buildings. And when they travel to San Diego, we destroy the historic buildings we have.”

Despite the opposition, the council had been expected to approve the remodeling project. Last month, after an emotional debate, it had renewed a negotiating agreement among its redevelopment agency, the Centre City Development Corp., Fayman’s arts center and Lincoln Investments, the San Diego developer that is to remodel the theater.

Even though council members gave Fayman’s project the final go-ahead Tuesday, they were sharply critical of the lease the CCDC negotiated with Fayman and Lincoln Investments. The two council dissenters--Mayor Roger Hedgecock and Councilman Bill Cleator--said they thought that too much city money was being spent on the project.

(Under the contract, CCDC will spend $3 million to acquire the old theater and upgrade it. Lincoln Investments is to spend $4 million. The art center then is to lease the building for $250,000 a year, and Lincoln Investments, in lieu of rent, is to return to the city 20% of the net income from its shops.)

Councilman Dick Murphy, who voted for the project, objected strenuously to a clause in the lease that could permit the art center to eventually buy the theater for $1.

“Why would we do that?” Murphy irritatedly asked CCDC Director Gerald Trimble. “I would never give away a $2-million piece of land.”

Trimble responded that the art center could only exercise its purchase option after 57 years--and then only if the retail stores on the ground floor were not generating any income.

Still, Murphy wasn’t satisfied. “Mr. Trimble, if I have a house, and I paid $100,000 for the house and I’m not renting it out, its value wouldn’t be zero,” he said.

Murphy also asked, “Why are we as the Redevelopment Agency spending $6 million to build a new theater in Horton Plaza--and spending $3 million to gut one next door (the Balboa Theater).”

Trimble replied briefly that the decision was made three years ago. Then, and now, CCDC studies questioned the economic viability of the 62-year-old, 1,500-seat theater, Trimble said.

Save Our Balboa members contend that Trimble’s study is “biased” and “a sham,” and that the theater would make a good contemporary stage if it were renovated slightly.

The old theater, with its distinctive cream-colored dome and unusual waterfalls on either side of the stage, used to host local theatrical productions and vaudeville shows. In recent years as the neighborhood around it became seedy, it has been a movie house featuring films such as “Lust in the Dust” and “Make Them Die Slowly.”

Although preservationists have pleaded with the city to let them restore the theater to its former glory, developer Christopher Mortenson of Lincoln Investments has said he must gut the theater if he is to bring it up to code. He has promised to restore the exterior of the building, however, and $1 million in CCDC funds have been pledged for that task.

Also Tuesday, the council considered leasing arrangements for the two theaters in the Horton Plaza project. Council members objected strenuously to what they considered overly generous contract terms offered by CCDC to its prospective tenant--the San Diego Repertory Theatre.

CCDC is offering the Rep a subsidy of $319,500 a year for operating costs, including theatrical equipment if the Rep will operate Horton Plaza’s 500-seat theater and 250-seat theater.

“I am really shocked at the size of the subsidy--and that it is an ongoing subsidy,” Councilman Ed Struiksma said. Councilman Mike Gotch urged his colleagues to remember that CCDC had had difficulty getting any theater to occupy the site. The council is to consider the issue in more detail on May 14.