If all goes well between CineLux and the city, the Granada could open as early as August, playing first-run mature and family-oriented films, according to a staff report.
On Wednesday night, the Morgan Hill City Council, acting as the Morgan Hill Redevelopment Agency Board, will review a staff recommendation to pursue an exclusive negotiating agreement with CineLux - which currently operates the 11-screen theater complex in Tennant Station - for the existing and new Granada Theater.
Ideally, CineLux would operate the existing Granada Theater for a little more than two years while a mixed-use project that includes a second-floor theater would be built down the street, on the southeast corner of Second Street and Monterey Road, according to the report prepared by David Heindel, the assistant to the city manager for downtown redevelopment. Once the mixed-use project were finished, projected to be late 2011 or early 2012, the Granada Theater would move into it and CineLux would continue operating it. The original Granada, along with the Downtown Mall, would eventually be demolished to make way for another, larger mixed-use project down the road, according to the city's downtown specific plan.
The city received two letters of interest in March after sending a request for such letters to 13 potential cinema operators including known interested parties like the Sobrato Conservatory of the Arts and Movies A Go-Go.
Just Movies A Go-Go and CineLux responded with letters of interest.
Movies A Go-Go owner and Morgan Hill resident Robert Garcia said the city made "the right decision" in selecting CineLux, noting the company's vast experience compared with his little experience. Movies A Go-Go is a local mobile movie event planning company.
"I just want to see something good brought to the city," he said, adding that he would prefer art-house movies since the genre doesn't get a lot of attention in the San Jose area.
The city rejected a July operating proposal from Garcia that included a $750,000 investment from the city for renovations. Heindel said that any cost associated with reopening the theater would be worked out in a third stage of the process, following the lease negotiation.
The whole process will take several months, Heindel said.
"It's going to take a little while, I'm sorry to say, but we're going to move as fast as we can to get that done," Heindel said.
If the council approves staff's recommendation Wednesday night, the exclusive negotiating agreement and the lease agreement could take several weeks each to complete, with the construction cost estimation and request for city funds taking another several weeks, he said.
And that's if the city moves quickly, and everybody is on board each step of the way, Heindel said. For example, the Granada reopening will come before the city council at least three more times. If there are no hitches in negotiations, the final council decision - on how much Redevelopment Agency funds will be spent on the renovations - would be during their June 24 meeting. Then there are the renovations, Heindel said.
Owner Paul Gunsky said Cinelux would operate Granada as a two-screen theater showing "sophisticated" movies, such as "Frost/Nixon" and "Slumdog Millionaire;" independent films such as "Fireproof" and "The Duchess;" and family-oriented movies.
The city decided against granting the Granada Theater historical significance since the building isn't in great condition. However, the theater's marquee and facade were designated historical structures and the council has discussed moving these objects to the new theater once it's built. The Granada closed in 2003 and the city bought the property, along with the Downtown Mall, in December 2007 for almost $10 million.
Most downtown proponents agree that reopening a theater there is crucial to the area's revitalization. Merchants have urged the city to find an interim use for the Granada, since the theater would provide more foot traffic and boost business there.
BookSmart owner Brad Jones said the reopening of Granada is "the best thing that could happen to the downtown," especially if it were to include a stage for live performances and sat between 500 and 1,000 people. He said he wasn't sure that a new multiplex in the downtown is the best thing.
Hot Java owner Bill Quenneville agreed on both points.
"We need a downtown draw," Quenneville said, adding that most people don't want to see first-run films in a downtown theater, but more independent films.
Gunsky isn't opposed to the live-stage idea, although other Cinelux theaters don't have them.
Quenneville also expressed concern that there would be enough parking for theatergoers.
Natalie Everett
Natalie Everett Natalie Everett is the education and city reporter for The Times. Reach her at (408) 779-4106, ext. 201, or neverett@morganhilltimes.com.
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