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Photograph by Raymond R. Rodriguez Jr.

Three Men and a Maybe: Dennis Skaggs, Jack Nyblom and Jim Zuur, owners of the Camera Cinemas, which includes Camera One, Camera 3, the Towne 3, Los Gatos Cinema, and Cinema 7 in Campbell, say that their carefully orchestrated deal to get money from the San Jose Redevelopment Agency was four days away from finality when the state's budget ax fell on redevelopment throughout the state.

Freeze Frame

Redevelopment blames Gov. Davis for its budget woes; the governor blames the feds. Enough passing the buck--Camera Cinemas just wants to know if it can move its much-needed improvement--and survival--plans into the front row.

By Traci Vogel and Allie Gottlieb

CAMERA ONE is a small, jewel-box structure with an almost chapel-like feel. When five San Jose State University graduates opened the theater on South First Street in 1975, car repair garages and porn shops dominated the business district. The first film the theater screened was the 1966 French film A Man and a Woman. The showing sold out.

When the offshoot Camera 3 opened nine years later on the ground floor of a newly built public parking garage, it was heralded as a watershed event in the revitalization of downtown San Jose. To make the 1984 opening, then-Mayor Tom McEnery and his city manager took a break from crisis management meetings that preceded the disclosure of one of the worst municipal financial disasters ever--the loss of $60 million in city funds from investments in uninsured bonds.

Twenty-odd years after the Camera One opened, Camera Cinemas holds "local treasure" status in the minds of many Santa Clara Valleyites, with years of screening The Rocky Horror Picture Show and other era classics like Eraserhead, My Dinner With Andre, Room With a View, The Blair Witch Project and Amélie. The enterprise's combined sites, at Camera One and Camera 3, bring an estimated quarter of a million people downtown each year. (Camera Cinemas also owns the Towne Theater on The Alameda.)

Now, harsh economic realities could leave San Jose as perhaps the only large American city without a movie theater in its downtown. Camera Cinemas doesn't know whether it can count on San Jose's Redevelopment Agency to perform on its stated objective of retaining a downtown cinema.

You would think the funds tease would be eye-rollingly old by now. After all, the RDA and Camera Cinemas have negotiated dozens of deals throughout the years, which have allowed the theater group to endure and to expand its empire, even beyond the borders of downtown. The latest progeny, Camera 7, in Campbell, successfully combines four screens showing highbrow Hollywood blockbusters--Chicago, Adaptation--with three screens showing lesser-known art and foreign films.

This blockbuster/art film mix, Camera Cinemas' owners seem certain, is the only financially feasible future for small cinema, and it was a formula they intended to replicate in their aging Camera 3 space downtown, with the support of the RDA, until Jan. 10.

That was the date on which Gov. Grey Davis announced his own horror blockbuster: "The Incredible Shrinking State Budget," effectively freezing all redevelopment projects in the state of California that were not of Category 1 status, including all projects that were under negotiation (Category 3) pending the signature of the redevelopment board. Had Davis cast his pall just four weeks later, the celluloid vision the Camera Cinemas has been projecting for downtown for many months might even now be in the process of becoming a reality. Instead, the owners find themselves sitting in the dark.

Back to the Future

Listening to Camera spokesman Dan Orloff delineate the relationship between Camera Cinemas and San Jose's Redevelopment Agency is a little like listening to someone in love. Indeed, the on-again-off-again history between the RDA and the Cinemas spins out like a soap opera, full of tiffs and embraces. In the end, however, things always seem to come down to that all-important question: Will the RDA again consummate its vow of support for Camera Cinemas by giving it the funding it needs?

When, in 1993, the Redevelopment Agency proposed bringing a competing 16-screen Cineplex to the Pavilion development across from Camera 3, the media and the public responded with dismay. Sixteen screens were clearly overkill, and the agency went back to the drawing board. Its alternate plan? United Artists would move in with an eight-screen Cineplex, with an eye toward screening films that didn't directly compete with Cameras' fare.

Market forces, however, determined that no one would patronize UA for long--the operators snuck out of town two years after opening at the Pavilion, and the building now stands as empty as one of Saddam Hussein's ornate palaces.

Currently, the Pavilion's lease specifies that the space must be reoccupied by a cineplex within the same terms as UA's. Every deal that's been proposed since 1995, however, has been found financially unfeasible--including Camera Cinemas' own proposal to move into the UA space and thus expand to the eight screens it sought. In the end, Camera Cinemas couldn't profitably meet the Pavilion's price.

In the meantime, with the lease on Camera 3 due to expire in September 2003, Camera Cinemas' owners began considering some other options. They spoke with their neighbor, Kinko's, whose lease also expires in September, and drew up a plan that would have allowed Camera 3 to take over Kinko's space, add three screens to the existing three and take advantage of some city funds for facade improvement.

Camera Cinemas also decided to divest of its original theater, Camera One, now becoming technologically outdated, by selling it to the city for $1,020,000. In addition, Camera Cinemas hoped to borrow up to $2 million in a low-interest tenant improvement loan from the agency to complete its expansion plans at Camera 3. The deal seemed solid, and after six months of negotiation, the owners signed a lease agreement with the Redevelopment Agency that approved all the changes in December of 2002. All it needed was a vote of board approval to be moved from Category 3 to Category 2. Then came the big freeze.

In step with the city, Camera Cinemas spokesperson Dan Orloff says the company does indeed want to help create a cinema district downtown, with mainstream, foreign and art films side by side, but now, he says, "The clock is ticking."

"The city does not yet know the extent to which the state's going to pull redevelopment money from us," Orloff bemoans, "and we've been told it could be as late as October this year before anybody knows. The problem is, of course, that Camera has a lease expiring in September, and they need to become competitive in this new market."

By "new market," Orloff means the suddenly burgeoning scope of cinema in San Jose. In the next year and a half, a total of 46 new screens will open in the city: 20 at Oakridge, six at Santana Row and 20 more at Eastridge.

"The likely thing is that downtown will end up with one movie theater," Orloff says. Whether it will be Camera or some megaplex corporation is purely up to the San Jose City Council and the Redevelopment Agency.

Shick's List

Despite the seemingly rigid nature of the categorizing system the Redevelopment Agency employs, its category lists are not set in stone. According to Bill Hughes, in the city attorney's office, the agency board (which is the same as the City Council), as part of its budget discussions, has the power to decide what priority it will place on each project, based on recommendations made by the executive director, Susan Shick. But the board says that until the state Legislature adopts a budget plan, it cannot resume projects not currently under construction (Category 1) or under contract (Category 2).

Board member Chuck Reed explains, "We created the list. So it's a self-imposed limitation. We have complete control. It's not that we don't have money; it's that the state is looking at our money and drooling."

Reed also said that the City Council's recent decision to release RDA funds for the Bijan Bakery (despite the predicted low return on the investment, as reported recently in Metro) is a good example of the city's power to choose what to fund and what not to. "We had no obligation to them," he said.

Peggy Flynn, redevelopment's communications director, begs to differ, at least slightly. "That project was part of the Fairmont, and the Fairmont annex was already under way," she says. However, Flynn also emphasizes that funding decisions are ultimately up to the board. "All the Category 3 projects are in our budget to be funded," she says, "just like they were last year. It's not our decision. It's the board's decision. They're in our budget, but we don't know if we're going to have the money."

A look at the projects now included in Categories 1 and 2 gives a quick insight into the Redevelopment Agency's priorities. Among the more expensive projects currently being funded as Category 1 are the $40 million renovation of the Fox Theatre/Opera San José, a project that was three years in the making and had widespread public support, and the downtown library project, of which San Jose State University is funding 59 percent. Other projects that top the list are a $1 million Second and Third Street housing and retail improvement package, and the Horace Mann School District renovation, at $5.5 million. The Guadalupe River Project is being allocated $1.3 million.

The RDA's proposed budget is set to be released on May 1, and the wrangling with the Board kicks off, tentatively, May 19. Among the more contentious projects, of course, will be the city's proposed regime change and subsequent renovation of the Tropicana Shopping Center, a project currently opposed by community activists and the center's landlords and tenants. Despite this opposition, it seems likely the city will adopt the plan, since the political machine is already in motion, and backing out of the contract would cost the city money.

The political nature of the process is clearly frustrating to Jim Zuur, one of the owners of Camera Cinemas: "We had our project signed, ready to go--that deal was completed, we signed it, took it to the agency; Susan Shick was going to sign it. It was four days from approval by the board ...," he says with audible angst. "Without a project, we're very vulnerable. We're in harm's way. But we have faith in our Redevelopment Agency that they can make something happen and keep theaters downtown."

Meanwhile, Camera Cinemas has leased the theater at Camera One back to itself so long as it needs to, while it awaits Santa Clara County's unwelcome (at least to them) cinema boom. Zuur continues to hold out hope, saying that a recent meeting with the mayor's office was encouraging. "We received a commitment from the mayor's budget director, Joe Guerra, and the mayor's chief of staff, Rebecca Dishotsky, that the Cameras project downtown was at the top of their list--a priority to keep the Cameras downtown," he says.

Asked what the nature of this commitment might be, Joe Guerra says, "I think Jim and Jack [Nyblom] are concerned about all the significant cuts that the state is making, and we just tried to assure them that as it relates to moving forward that we're hopeful that everything that's in the budget already will be able to stay there. We did indicate to Jim that, from our perspective, as far as money value on the dollar goes, the Camera project is a very, very important project to us."

Important enough to be moved from Category 3 to a higher priority? Guerra demurs: "Once we know what the state budget is, there are no more categories; we can just move forward. We're hopeful for a date very soon when there are no more Categories 1, 2, and 3."


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From the May 1-7, 2003 issue of Metro, Silicon Valley's Weekly Newspaper.

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