El Cajon balks at plan to raze theater

El Cajon city leaders on Tuesday edged away from a proposal to replace the East County Performing Arts Center downtown with a Marriott Courtyard hotel, saying they’d rather see the mothballed theater fixed up and reopened.

At a special City Hall workshop, elected officials said they’d like to see a classy hotel open in the heart of town, but suggested that developer Neal Arthur instead focus on building it at Rea and Magnolia avenues.

Councilman Bob Mc Clellan and others said it makes more sense for taxpayers and the community to retain the East Main Street theater, rather than raze it and direct funds into what sounds like an iffy business proposition.

“Why should El Cajon tear down a perfectly good asset that it has and take a risk (with a hotel)?” he asked his colleagues. “I’d rather spend a little bit of money and fix up ECPAC.”

Arthur recently suggested the theater site for a four-story hotel after the state-owned property at Rea and Magnolia appeared no longer to be an option, following the city’s loss of redevelopment powers.

But a majority of council members on Tuesday advised Arthur and city staff to take a fresh look at the Rea and Magnolia site, saying the state might be willing to sell it to address its own budget problems.

Arthur said he is open to that idea, believing that downtown is ripe for a higher-end hotel. He noted that Marriott has previously expressed interest in the Rea and Magnolia parcel, next to the city’s new police headquarters.

Arts boosters and residents welcomed talk of preserving the 35-year-old, 1,142-seat theater and pledged to work with City Hall to help raise the money needed to restore it. The city-owned stage was shuttered more than two years ago.

Officials estimate the building needs more than $4 million in repairs, including a new roof. Others believe it can be reopened for far less.

At the start of Tuesday’s meeting, Arthur spelled out his proposal to develop a 107-room hotel on the theater site, funded by $20 million in tax-exempt bonds. He said the city could create a nonprofit group to own and manage the lodge.

Most council members, however, expressed serious reservations about the unusual financing plan, saying it could ultimately put the city at serious financial risk if the hotel failed.

Councilman Gary Kendrick likened the arrangement to investing in “Greek government bonds.”

“I’m really nervous about the city essentially getting into the hotel business when our primary mission is public service,” he said.

The council voted on March 13 to enter into exclusive talks with Arthur over the theater site, but started talking with the Lakeside developer last year, at the urging of then-Councilwoman Jillian Hanson-Cox.

Arthur recently told city officials that the hotel idea had been Hanson-Cox’s “brainstorm” and that she had envisioned a boutique-style business similar to the Hotel Solamar in downtown San Diego.

Hanson-Cox resigned March 7 following an FBI raid on her house and the office of her former employer, Century Design Inc. The FBI has not said what they were searching for, but the probe is known to include her oversight of the city’s Mother Goose Parade in 2007 and 2008.

Many cities cast a wide net on major projects by seeking proposals from more than one developer.

In an interview last week, Arthur said he believed he was the only developer actively interested in building a hotel downtown. “There was nobody else but me,” he said.

Kendrick noted that the city has not committed a dime to the project and that the March 13 agreement only means that city officials and Arthur are talking, and nothing more.

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