Closing credits

City officials are so eager to bring foot traffic to downtown that they are giving millions of dollars to a corporation that may drive two historic movie houses out of business in the process

Thanks to the $10 million public subsidy proposed for Century Theatres, the city also will have to step in and help Sid Heberger’s historic Crest Theatre.

Thanks to the $10 million public subsidy proposed for Century Theatres, the city also will have to step in and help Sid Heberger’s historic Crest Theatre.

Photo By Larry Dalton

Two hours before the lunch rush, Jim Seyman was arranging brightly colored tiles like pieces of a jigsaw puzzle around one of the tables of his Tower Cafe restaurant. They were Tunisian tiles—busy, looping designs of orange, yellow and blue—and Seyman was thinking of using them to cover several columns inside the restaurant, adding another Mediterranean accent to the space that is already filled with eye-popping color and international bric-a-brac.

He knew it would be expensive, maybe $30,000 out of his own pocket. But Seyman continuously has added little touches to the cafe throughout the 14 years that he’s been in business there, even when business has lagged.

There were very bad times in 1998, when his neighbor the Tower Theatre stopped showing films for a few months after the Landmark Theatre Co. decided to leave the Sacramento area. Seyman said his business dropped dramatically. “It was really scary. But I did what I could. I just kept working and trying to encourage a new neighbor to move into this remarkable building.”

The Tower Theatre is one of Sacramento’s last pre-World War II movie houses and is the focal point of a lot of Sacramento history. Seyman himself spent many hours as a teenager at the soda fountain that once occupied one wing of the building. It’s the same space where Russ Solomon launched the Tower Records company and where Seyman opened Tower Cafe on Earth Day in 1990.

After going dark for those months, the Tower Theatre reopened late in 1998, with Reading International, a New Zealand-based corporation that specializes in showing independent and art films, signing a new lease. But by then Seyman’s business was down 20 percent, and it still hasn’t recovered completely, he said.

Now, Seyman is afraid that that dark, scary year in 1998 will prove to be a fairly mild patch of bad luck compared with what’s coming next.

That’s because the Century Theatres chain soon may be bringing to Sacramento one of its new CinéArts theaters—slick, state-of-the-art multiplexes that that will show first-run independent and art films, which are the usual bread and butter for theaters like the Tower and the Crest. Seyman and others think Century’s new art house will drive the Tower Theatre out of business, which, in turn, could have a profound effect on other businesses in the historic but struggling Tower district.

What bothers Seyman the most is that the city of Sacramento wants to give Century millions of dollars in public funds to help make it happen.

Three weeks ago, Sacramento’s Downtown Development Group went to the city council recommending approval of an “exclusive right to negotiate” between city staff and Century for a new two-pronged theater project.

The Downtown Development Group—a department within the city manager’s office that’s responsible for bringing worthy development projects to the central city—had been negotiating already for more than a year with Century and the owners of Downtown Plaza to bring two new theaters to K Street.

Century and the Downtown Plaza folks had been planning to open a brand-new 18-screen theater inside the shopping mall at Fifth and L streets. The Downtown Development Group, headed by Wendy Saunders, hoped to redirect the project to K Street, where it might help to re-energize the pedestrian mall.

“Bringing theaters to K Street Mall has been a redevelopment strategy for a long time,” Saunders explained. Though the workers downtown go home around 5 p.m., Saunders believes that theaters bring people to the street on evenings and weekends. If the project works, it will create what Saunders called a “Cinderella effect” in the area, encouraging neighborhood businesses to stay open later and encouraging others to move in.

And it turned out that Century and Downtown Plaza were delighted to help revitalize K Street, for a price.

For $10 million to $12 million in city redevelopment funds, Century will close its existing seven-screen theater on the east end of Downtown Plaza and build a new 12-screen multiplex on the west side at Seventh and K streets, at the western base of the K Street Mall. This new theater, built into a newly constructed third floor above the Hard Rock Cafe, will show the same first-run, mainstream films that are currently being shown at its old location. The city will give Century and Downtown Plaza at least $5 million to cover the increase in construction costs at the site at Seventh and K streets.

Jim Seyman, who owns the Tower Cafe, thinks Century’s proposed CinéArts theater will force the Tower Theatre to go dark and that it will hurt his business.

Photo By Larry Dalton

The other, more controversial half of the project would be a brand-new six-screen Century CinéArts theater at 10th and K streets, right across the street from the existing Crest Theatre.

There, the city would pay to build a new theater for Century. The city would own the building, but the movie company would be allowed to operate rent-free for two years, and then it would begin paying $10 per square foot annually for the rest of the 10-year lease. The project at 10th and K streets would cost another $5 million to $6 million.

By investing $10 million to $12 million of the city’s remaining development funds in these theaters, the city would be putting many of its eggs in one basket. The fund is created by property taxes collected inside Sacramento’s downtown-redevelopment area. There is only about $30 million left to work with, and the movie-theater project would use up a third of that.

The city needs to get a more vibrant K Street in return for its investment. The site at 10th and K streets last was the home of a Woolworth’s department store that went out of business in 1997. The whole block on the south side of K Street has been vacant ever since.

“It’s the center of the dead zone,” said Saunders.

Ironically, K Street used to be a thriving cinema district, with about 28 movie screens in operation, said Michael Ault, director of the Downtown Partnership, the central city’s business association. But by the 1980s, most of the downtown theaters had closed, as the city core generally fell into disrepair.

“It was a movie zone and a pedestrian zone. We’re really moving back to that now,” Ault explained. The Downtown Partnership has worked closely with city staff on the Century proposal, and Ault dropped by during the interview SN&R held with Saunders.

But more than just creating movie screens, Ault said, the project would target what some believe is the scariest block on K Street. “We’re removing a whole block of blight, bringing new retail and people in and removing the undesirable element that hangs around vacant buildings,” he said.

The attempt to bring movie screens to this spot has been ongoing for 10 years. A deal to bring AMC Theatres to 10th and K streets fell through in the early 1990s. That proposal also was controversial because it would have required a $15 million city subsidy to build 24 new screens.

After AMC backed out, the California News Service (CNS) came in 2000 with a proposal to build a cable-news outlet in the old Woolworth’s building. The city actually bid against CNS for the property, and when the television deal fell apart (CNS couldn’t line up financing), the city bought the land outright. In September 2001, Saunders’ group sent out a request for qualifications (RFQ) for developers to propose an “entertainment complex” on the site. For a while, the city worked with Los Angeles-based developer CIM Group on a movie-theater proposal, and also on a project that would have put apartments on the site. But in the summer of 2002, the curse of 10th and K streets struck again, and CIM walked away from the project unable to reach an agreement with the city.

Rather than put out another RFQ, the city quietly started working with Century Theatres on a new proposal.

But this project is significantly different from theater proposals that have come before. Century wants to use city redevelopment funds to build an art-house theater, one that will compete directly with two historic theaters that specialize in independent and art films: the Crest Theatre directly across the street and the Tower Theatre at 16th Street and Broadway.

Though the negotiations with Century on the CinéArts proposal weren’t exactly secret, the plan hadn’t been unveiled in public until early this March. “We had to make sure we had a deal,” Saunders explained. But the deal stunned historic-preservation advocates, and neighbors and admirers of the historic Crest and Tower theaters. And those people came to the March 4 city-council meeting hoping to at least slow down a project they believe will spell the end of the Tower Theatre.

That night, the audience was split almost evenly between opponents of the project and K Street business people who want to see the project done as quickly as possible.

Prominent downtown developer David Taylor said the theaters were long overdue: “To boil it all down, we support this project moving forward as quickly as possible. It’s one of the only catalyst projects that we could think of that will bring the kind of people, the number of people with money in their pockets, that we want.”

The city’s Downtown Development Group is pushing the Century Theatres project to clean up blight and “re-energize” the K Street Mall. Century’s CinéArts theater would be built where the long-abandoned Woolworth’s building sits at 10th and K streets.

Photo By Larry Dalton

A procession of nearby business owners also spoke in support. “We welcome any and all new businesses, especially with the kind of economic impact that this one will have,” said Zach Layton, manager of the Pyramid Alehouse on 11th and K streets. “The city’s commitment to redevelop K Street was one of the reasons we decided to locate there.”

But the meeting quickly turned into a four-hour argument over what the effects on the historic Tower Theatre would be and why the public had not been given details of the project sooner.

Century executives were on hand to assure the council that there are more than enough independent films and their viewers to go around and that most major studios now have divisions dedicated to producing non-mainstream films.

“There are a lot of features that are being shown in San Francisco that would never be shown in Sacramento,” said Raymond Syufy, of Syufy Enterprises, the company that owns Century. “We’re really expanding the pie rather than cutting it up into smaller pieces.”

Not so, said Ellen Cotter, chief operating officer of Reading International, the company that operates the Tower Theatre. She said CinéArts’ entry into the Sacramento market will wipe out its competitors. The problem isn’t so much that there aren’t enough patrons who like non-mainstream films but that there are only a limited number of prints available of any independent film.

The films that draw the bigger crowds and that pay the bills, such as Lost In Translation, likely will be snapped up by Century, which has considerable purchasing power. “They are a huge player and are very aggressive about getting films. They’ll have six screens to fill and will be able to pay more than we can,” Cotter explained. And though the Tower has only turned a profit for Reading in the last two years, Century will start with a $6 million gift from the city and free rent.

“The city is going to be heavily subsidizing a theater that will mean the end of the Tower,” she added.

The Crest’s operator, Sid Heberger, found herself in a similar predicament a year ago, when she first learned of the CinéArts project.

“I was initially very, very concerned” about the multiplex moving in across the street, she said. She has since changed her tune, going in front of the council to announce her support of the project. She explained that after more than a year of negotiations, Heberger, her landlord and the city have struck a tentative deal. The deal isn’t finished, and its details aren’t public, but most observers believe it is basically monetary compensation. In the past, the city has given the Crest’s landlord more than $600,000 in loans and grants for the restoration of the old building. One possibility is that the landlord will have some of the debt forgiven and that Heberger, in turn, will get a break on her rent. But the fate of the Crest seems far from certain. Jack Diepenbrock, who represents Heberger’s landlord, the Briggs Family Trust, said that although negotiations have been going well, he’s still “concerned about the collateral damage to the Crest.”

Although mitigating the damage to the Crest likely will involve more public money, it appears the details of that deal won’t be available to the public for months to come.

And at this point, there is no deal in place for the Tower, which, in many ways, is more likely to be affected than the Crest is. The Crest long has hosted music shows and special film festivals to supplement its income, but the Tower has relied much more heavily on first-run showings of independent films.

And though groups like the Downtown Partnership are urging the city to move faster, opponents of the project said it had moved far too quickly already. “We just want to slow this down until we get some better data,” explained Bob Waste, an urban-planning professor who was hired by Reading Entertainment. Waste complained that the council shouldn’t go forward with this project without considering the effects on the Tower Theater in particular and without a more detailed analysis of the project’s supposed benefits. “Sometimes the soup’s not ready, and this soup is not ready,” Waste said. “Certainly not a $10 million dish.”

Ready or not, the council voted unanimously to enter into a six-month period of exclusive negotiations with Century for the theater project.

How the effects on the Tower Theatre were overlooked during a year-and-a-half of courting Century Theatres isn’t completely clear and has become the subject of much finger-pointing.

The Downtown Development Group suspected early on that there would be a negative effect on the Tower. So, the city hired Jay Shapiro, a consultant from Massachusetts, to help negotiate the project with Century, and part of his contract clearly spells out the need for a “concessions and compensatory program for the management and operations of The Crest and Tower Theatres.” But that never happened, at least not for the Tower.

CinéArts would be in direct competition with the Tower Theatre and the Crest Theatre for independent films. But, with a $6 million city subsidy and free rent, Century would have a big competitive advantage.

Courtesy Of Downtown Development Group

Shapiro said he toured the Tower location several times and spoke with the theater managers at the site to get at least a general idea of what the effects on the Tower would be when the CinéArts moved in, which he said he included in the “competitive exhibition report” he gave to Saunders’ Downtown Development Group.

When asked for a copy of the report, Saunders said Shapiro made only an oral presentation and that no public record was available.

Shapiro’s business Web site ( prominently lists Century and other major movie chains as current or former clients. When asked if this presented a conflict of interest, Saunders said she had no knowledge of Century being a former client of Shapiro’s. Shapiro explained to SN&R that he had never received any consulting fees from Century and that he listed them merely because Century executives once invited him to speak at an industry conference concerning redevelopment and the retail and entertainment businesses. “It was all very much at arm’s length,” Shapiro explained.

Shapiro told the city council that he believes there will be impacts to Tower, but he told SN&R that he doesn’t think CinéArts will force the Tower to go dark. However he refused to share with SN&R his assessment of the likely impacts, saying only, “I haven’t discussed that with my client [the city] yet.”

Saunders said that her assistant, Traci Michael, made several attempts to reach Cotter at her New York office by phone but that none of those phone calls was returned. Saunders did say that in June, she talked to someone else in Reading’s New York office, a woman named Terry Alvarez, who informed Saunders that a CinéArts theater would, indeed, be troubling for the Tower. But Saunders said that neither Alvarez nor anybody else in Reading’s New York office responded to a request for detailed financial information that would have helped explain CinéArts’ potential impact to the Tower.

“Frankly, we just dispute that,” said Cotter, with Reading International. Cotter said she didn’t remember receiving any phone calls and certainly never got any written information about the proposed project. Cotter did get a call from someone in the historic-preservation community, once the project appeared on the city-council agenda. “Basically, the first I heard of it was that Monday,” Cotter explained. She flew into town the next day.

But Cotter must have known something about the project months ago. She was quoted in a Sacramento Bee story back in February 2003, when rumors of the CinéArts project first started to circulate. Ironically, Cotter was quoted as saying that movie distributors sometimes favor smaller single-screen theaters “because they like the way the film is treated and the audience the theater draws.”

Cotter told SN&R that she remembered talking to the reporter but hadn’t read the story and didn’t know it was about CinéArts coming to Sacramento. “There are always proposals. Just because people talk about things doesn’t mean it’s a done deal. We didn’t know it was a done deal until we got the phone call [on March 1, 2004],” Cotter added.

Saunders said she got the impression that Reading just wasn’t concerned about what the city was proposing. “Frankly, because of the condition of the [Tower] building, the lack of maintenance and the fact that they didn’t return our phone calls, the evidence was that they just didn’t care,” Saunders said.

“That just makes me mad, to hear them say that,” said Michael Valasquez, the Tower Theatre’s on-site manager. It is true, he said, that the Tower’s interior is drab compared with the elaborately designed Crest. But Valasquez noted that in the last year, the theater had installed a new sound system in one of its auditoriums and a new digital projector in another.

He said it also was looking into restoration of two murals that have been covered for years in the main auditorium. The pictures are of Greek figures and date back to Tower’s construction. Cotter said Reading had been considering restoration of the murals, which have been covered for years because they are heavily cracked from what appears to be water damage. But Cotter also said all improvement plans are on hold until the CinéArts issue is resolved.

There are no cut and dried rules when the Downtown Development Group or any other city department plans a new project. But city staff generally will try to get input from anyone directly affected by the proposal. In the case of the Tower, building owner Alan Blumenfeld might have been an obvious choice for a contact. Blumenfeld’s father built the Tower Theatre in 1938. Today, he leases the building to Seyman’s Tower Cafe and to the theater operator. But he said he had received no phone call, no letter—nothing from city staff.

“I do think that would have been appropriate. We own the property and are very concerned about the well-being of our tenants,” Blumenfeld said. Not surprisingly, Blumenfeld, who lives in San Francisco, still has a lot of affection for the old theater. The Tower was Blumenfeld’s first big success and helped bankroll the construction of the Esquire Theatre (now the IMAX) on K Street. And like other critics of the CinéArts subsidy, Blumenfeld sees the city giving another corporate chain an unfair advantage. “It’s just like what you’re seeing with all these Wal-Marts. They come in and wipe out the neighborhood guys,” he said.

Because of the agitation of the Tower’s neighbors and admirers, the city council has asked the Downtown Development Group to come back with some sort of plan to “mitigate” the impact to the Tower from the CinéArts project.

But what can be done now is anyone’s guess. “I haven’t got a clue,” Saunders said. “We still have to figure out what the impacts are.”

This J Street mural is one of the few reminders of the historic Alhambra Theatre, bulldozed in 1973 to make way for a Safeway.

Photo By Andrew J. Epstein

And that is precisely the problem, say critics of the proposal. They believe those impacts should have been considered months ago.

“We had heard about films [coming to K Street] but not about CinéArts,” explained Luree Stetson, leader of the Land Park Community Association. Stetson said that when she learned that a subcommittee of the city council, headed by City Councilman Steve Cohn, had been meeting over the course of several months to discuss the CinéArts plan, she asked for more information but was rebuffed. “We asked to attend the meeting but were told it wasn’t public. We asked for written information and were told there was none,” Stetson explained. Because the ad-hoc committee that was monitoring the CinéArts proposal is made up of only four city-council members (not a quorum), it is not required to hold its meetings in public.

Now that formal negotiations with Century and Downtown Plaza have begun, it may be impossible to rethink the project in any serious way.

That’s too bad, said Kay Knepprath, a neighborhood activist and sometime developer who brought in the Naked Lounge on Q Street. “We’re supposed to put a high priority on downtown housing. For that much money, I can visualize that area coming alive with some nice boutiques on the street and second- and third-floor housing,”

Knepprath explained. Others complain that by bringing in a multiplex instead of a more neighborhood-scaled mixed-use project, downtown will become indistinguishable from the suburbs beyond. “I think it’s the suburbanization of the central city,” said Roxanne Miller, a community activist and preservation advocate. Miller said places like the Crest and the Tower are what give Sacramento its unique texture and character. She believes that the city is sacrificing distinctive places like the Tower to attract the kind of development you can find anywhere else in the country. “If we’re not careful, we will become what it is that we disdain about the suburbs,” she said.

Despite the lack of consideration of Tower, the CinéArts project’s backers say they are now frustrated by this late opposition.

Ault, with the Downtown Partnership, said that any delay now will only jeopardize a much-needed theater project that has been 10 years in the making. “We need to be careful with Century. We want them to know that we want them here,” he said.

Cohn also expressed frustration with what he calls last-minute concerns about the Tower. Several times during the city-council meeting, he appeared exasperated with the project’s opponents. He said Century is free to show independent films if it wants to, at the original location at Fifth and L streets. “We can’t keep Century from competing in the marketplace. They’re going to be downtown one way or the other, and Tower is just going to have to deal with it,” Cohn complained. “Opposing this project is not going to save the Tower,” Cohn warned.

If what Cohn is saying is true, then the days of the Tower may indeed be numbered. The funky neighborhood art house already may be obsolete in the age when “alternative” and “independent” have mainstream-marketing cachet.

But Century may not, in fact, be that interested in showing large numbers of independent films in Sacramento without a CinéArts project on K Street or the competitive advantage that a city subsidy would give it. At Cohn’s prompting during the March 4 council meeting, Century executive Syufy said that if the CinéArts deal didn’t go through, Century would, indeed, build its 18-screen theater inside the mall. As for art and independent films, “We’ll show those as we can,” Syufy explained.

Cotter said she doubts a CinéArts in Sacramento would be that attractive to Century without a hefty city subsidy. Art and independent films, she added, don’t make enough to pay the high rents typically charged in a shopping mall.

Unfortunately, repeated phone calls to Century’s marketing director, Nancy Klasky, and to the vice president in charge of development, Victor Castillo, in an attempt to clarify this point, went unreturned.

The ghost of the Alhambra Theatre hangs heavily over this whole dispute. “We already know how to knock down a theater that is an historic gem,” Waste said, chiding the city council. “The second-best way is to rip out its cash registers and watch it go slowly down the drain.”

The city bulldozed the historic Alhambra Theatre in 1973 to make way for the Safeway supermarket that is there now. The Alhambra was leveled despite widespread and noisy public opposition and despite the fact that the theater had been listed on the National Register of Historic Places.

By destroying the Alhambra—with what many regarded as callous disregard for historic resources and the wishes of the public—the city galvanized Sacramento’s nascent historic-preservation movement. And “Remember the Alhambra” has been its battle cry ever since.

Seyman is angry about what he sees as another attempt to rush the project through without careful consideration and public input. “Now they say we’ve got to ‘get on with it.’ I say, ‘Get on with what? Spreading around the Starbucks mentality? Spreading around the sameness?’”

The city will negotiate with Century for the next six months. After that, the council will make a final decision on whether to approve the project.

Seyman thinks that once the details of the project are widely known, locals will “rise up” against it. “When you say, ‘Alhambra,’ everybody knows what you mean,” he said. “I know people who still won’t go to that Safeway because of what they did there.”

He hopes the city will stop to remember the Tower—before it goes dark.