A Blight At the Movies?

By Diego DuBois

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Posted January 6, 2011 in News

After years of political gridlock, capital flight, and one failed “revitalization” scheme after another, the city fathers of San Bernardino have finally found a way to turn the city around: a night at the movies.

That’s right, the answer to a $14 million-dollar budget deficit, double-digit unemployment and a school district with an ever-increasing dropout rate is a set of 14 silver screens. At least that’s how Mayor Pat Morris and interim Economic Development Agency Director Emil Marzullo are characterizing the city’s deal with Regal Entertainment Group’s to reopen the downtown cinemathèque.

With other fund-raising tactics either falling flat or failing to materialize—the county rejected a pitch to purchase the city-owned Carousel Mall for government office space, while a police-run tow yard for impounded vehicles is likely to face heavy community opposition and metered downtown parking at this point nothing but a pipe dream—the prospect of a movie theater downtown to anchor a commercial center and help rebuild a tax base is one of the city’s last hopes.

But according to one San Bernardino businessman, the hope is misplaced and will only end up costing the city’s taxpayers more than it’s worth. Ronald Rezek, whose company rents out emergency equipment to government agencies, sent a letter detailing the reasons the city’s deal with Regal is a dud.

In the letter sent to all the city’s power players, Rezek claims that “private investors” made the city, which took possession of the building through its Economic Development Agency when the CinemaStar closed in 2008, a counteroffer of $10 million to redevelop the theater. The city, according to the letter, opted to subsidize Regal’s conversion of the 20-screen theater to a 14-screen one, leaving the city to assume the risk of the investment. The indoor space, formerly home to the remaining six theaters, would become retail, performance and storage space—which Rezek maintains will be “inflexible” and “unattractive.”

The letter further discusses additional costs the project will generate that are not disclosed or considered by the city, including an agreement to pay off a HUD loan, bring the building into compliance for disabled access and pay for all building fees.

The author proposes a more business-friendly alternative: Allow the “private investors” to run all 20 screens, assume the risks in the renovation and construct retail units outside the theater.

The city and the EDA were quick to defend the plan, even accusing the protesting interests of disclosing privileged information that was only discussed in the city council’s closed session. WikiLeaks, anyone?

Rezek countered that the information he published in his open letter was common knowledge down at the country club, which itself illuminates a thing or two about local politics in San Bernardino.

So what’s behind this latest theater fiasco? Is it a genuine gesture by a benevolent businessman looking after taxpayers’ interests? Or could it be yet another backhanded ploy by power-hungry city attorney Jim Penman to thwart the city leadership’s every move? A materialist analysis might call it disguised assault on the unions. (According to Rezek’s letter, the city’s agreement to pay off the HUD loan is a scheme to “avoid paying prevailing [non-union] wages,” implying that part of the city’s motivation is to avoid angering the oh-so-powerful construction unions.)

Or is it something deeper—like the role of the EDA itself? (The city-funded agency has a flashy website and media apparatus and is tasked with boosterism, but, like many redevelopment agencies, has done little more than accumulate a ton of debt.)

Or is this another chapter in the saga of myopic city leaders who are content with small-time schemes to bring quick cash, but continuously neglect to envision new possibilities and accept some of the responsibility for making them come true?

I’ll leave the reader—and the city come January 10, when the theater issue will be discussed in open session—to make those judgment calls. I’m going to try to find something to take my mind off the mess. Maybe I’ll catch a movie?


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