HomeMy WebLinkAbout2001-04-30 City Council (6)City of Palo Alto
City Manager’s Report
TO:HONORABLE CITY COUNCIL
FROM:CITY MANAGER DEPARTMENT: CITY MANAGER
DATE:
SUBJECT:
APRIL 30, 2001
LANDMARK THEATRE UPDATE
CMR: 217: 0~..
This is an informational report and no Council action is required.
BACKGROUND
The purpose .of this memo is toupdate City Council on the current status of the Landmark
Theatre, located at Palo Alto Square on the comer of Page Mill Road and El Camino
Real.
In a press release prepared by the Landmark Theatre, the original intent at that location is
described:
"The original builders of the Palo Alto Square business complex 30 years ago had
in mind building a "financial one stop" for the Palo Alto area. Having the
foresight to avoid the risk of Palo Alto becoming overrun with too many office
complexes, the designers also decided to balance the project out by including a
theatre and a hotel in the complex. The hotel never came to fruition but the movie
theatre was realized, thus adding not only functional offices for banking, lawyers,
and other forms of business, but also adding a bit of family resource, cultural
enrichment. This desire for balance is still evident in the current agreement
between the landlord and the landowner, which stipulates that the theatre building
must remain a theatre and not used for another purpose."
In 1996, Equity Office Investments, the landlord of the property that Landmark Theatre
leases, attempted to close the theatre, but reconsidered after outreach from City Council
and staff. Since that time, Landmark has remained a tenant with only a month to month
lease. This tenuous situation made it financially irresponsible for the Landmark Theatres
to invest in upgrades to the theatre, since its future was at best, uncertain.
CMR:217:0O Page 1 of 2
DISCUSSION
In February, 2001, representatives of Landmark Theatres contacted City staff to discuss
its operations in Palo Alto and share their concerns that the Landmark Theatre at Palo
Alto Square was in jeopardy. Staff met with representatives of the Landmark Theatre on
February 27, 2001. At that time, the Landmark representatives indicated that they were
protected from eviction by their pending bankruptcy since bankruptcy protection made it
impossible for the owner of the property to serve an eviction notice. However, Landmark
was ’anticipating a 90-day eviction notice as soon as Silver Cinemas acquired it. City staff
immediately contacted Landmark’s landlord, Equity Office Prope,~tiea;~ (Equity) in
Chicago and inquired about its plans to evict the theatre. At that time, staff was told that
the local contacts for the theatre would contact staff and a meeting would be arranged.
Shortly afterward, Eric Gaertner from Equity called staff and indicated that Equity felt
this was "a landlord/tenant issue" and in the face of the $6 billion merger between Equity
and Spieker Properties, and that this issue was not among their current "highest
priorities."
Ultimately, the Landmark Theatre at Palo Alto Square received a 90-day eviction notice
from Equity on March 14, 2001 that will result in the theatre’s closure by June 14, 2001.
City Council members and staff have made repeated attempts to initiate a conversation
with Equity to discuss the situation and express concems about the loss of a theatre at that
site. The Planned Community zoning designation requires a theatre at that location and
both City Council members and staff felt that Equity may have not had a complete
understanding of the zoning implications at the site. Equity regional offices have been
contacted several additional times, with calls not being returned at this time. The local
Equity office has also been contacted, where the local representative reads a prepared
statement and offers a number in its public relations office for follow up questions.
Staff will consistently communicate that either the Landmark theatre or another theatre
use is mandatory at the Palo Alto Square location.
PREPARED BY:
S s~~~, E c~o~rces Plann in g Man ager
CITY MANAGER APPROVAL:--
EMI"[~ HARRISON
Assistant City Manager
CMR:217:00 Page 2 of 2