Court favors city in theater suit |

Court favors city in theater suit

El Dorado County Superior Court ruled in favor of the South Tahoe Redevelopment Agency Tuesday in a case against Wallace Theaters.

But Scott Wallace, chief executive officer, is not giving up easily.

“We are going to vigorously proceed with an appeal on every possible level,” Wallace said. “This matter is far from over.”

Wallace contends the Redevelopment Agency failed to honor its obligations according to California redevelopment law, which mandates a “reasonable preference” be given to tenants displaced by redevelopment projects.

The Redevelopment Agency in December 1999 filed an eminent domain case against the owners and leaseholders of the Crescent V Annex, including Wallace Theaters, which at the end of March 2000 responded with a cross complaint against the Redevelopment Agency and all parties involved in the Park Avenue redevelopment agreement.

As a result of the recent court findings all subsequent complaints were dropped, said Catherine DiCamillo, an attorney on the Redevelopment Agency legal team.

But Nicole Murphy, attorney for Wallace, is asking for a change of venue and for a new judge. She said that it is difficult for an outsider to get a fair trial in such a tightly knit community and that Judge Suzanne Kingsbury, who tried the case, should be disqualified because of her friendship with DiCamillo.

“We are absolutely sure that the local court got it wrong and the appellate court will agree with us,” she said.

But DiCamillo said two outside judges, including one at the Court of Appeals, already denied previous requests to disqualify Kingsbury.

“The court already determined that there was no basis for her to disqualify herself,” DiCamillo said.

Wallace was torn down as a part of the Park Avenue Redevelopment Project, but was not chosen by the agency to operate at the Heavenly Grand Summit Resort Hotel, a time-share scheduled for construction in May. The hotel will include a retail center and parking garage.

The Redevelopment Agency did not choose Wallace, citing the previous theater was kept in substandard condition, and instead chose Resort Theaters of America, which filed a Chapter 11 in October.

Trans-Sierra Investments, the company in charge of the movie theaters inside the Grand Summit, is not certain which theater company will operate in the hotel but is hoping to secure a theater operator in the next few months, said Lew Feldman, attorney for Trans-Sierra.

“Trans-Sierra is committed to develop a first class, state of the art multiplex cinema and recruit the best operator the market can attract,” he said.

Resort Theater’s filing of Chapter 11 was part of a nationwide trend.

“The broad based downturn in the cinema industry has not completed its cycle and has certainly made new development more difficult for the industry as a whole,” Feldman said.

Last summer United Artists, Carmike Cinemas, Edwards Cinemas and Silver Cinemas all petitioned for Chapter 11. Other major theater chains such as Loews Complex, owned by Sony Corporation, Regal Cinemas and AMC have all seen substantial financial losses.

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