El Cerrito will make one last-ditch effort to resolve its lease issues with the operators of the Cerrito Speakeasy Theater, who have not paid rent in 18 months and recently announced — and then rescinded the announcement — that they will close.
The city is moving forward with terminating the Cerrito's lease after discussing for the first time publicly the negotiations with theater operators Kyle and Catherine Fischer.
"The opening of the theater was a joyous event. It has been an asset to the community," said El Cerrito Mayor Sandi Potter. "It's with great disappointment that we find ourselves here. ... (The operators) have not held up their end of the commitment."
But agency members also urged the public to put pressure on the Fischers to come to some resolution with the city. The agency was assured by its attorney that voting to terminate the lease still left an opportunity to resolve the issues with the Fischers.
If nothing happens by Thursday, the city will begin looking seriously for a new operator.
"They will listen to the community, I hope," said agency member Ann Cheng.
Catherine Fischer said she and her husband are disappointed in the city's characterizations of the situation, saying they have done all they can. She said they have always been forthcoming and willing to work with the city.
"We approached the city over a year ago to renegotiate the lease. I can't tell you how many meetings we've been in with the city, and still nothing happens," Catherine Fischer said. "We told them we had a problem, that we need help. They wanted information. We said, 'Great, what do you want?' But over a year? We've run out of money. We're hanging on by our fingernails."
Some agency members were leery of making another attempt at negotiations, saying more time would not mean a resolution, and that the City Council, which also acts as the agency board, had other pressing issues — like the city's budget — to attend to in coming weeks.
"In some situations, it's hard to know whether to keep going or stop," said agency Chairman Bill Jones. "It's come to decision time."
The movement to open the theater began in 2002, when the agency purchased the building, and the first movies flickered on the screens in late 2006. The theater's operators had trouble paying their $10,000-a-month rent because of unforeseen construction costs, problems with getting first-run movies and the poor economy, they've said. The redevelopment agency has been negotiating with the Fischers in closed session for months on a new agreement that would eliminate some debt and reduce the rent.
In late 2008, the city had an independent audit done on the theater's finances that showed a $347,493 accumulated deficit in 2007. By the end of September 2008, a preliminary report showed the deficit had grown to $380,800.
Earlier this year, the Fischers closed their other theater, the Parkway, in Oakland, citing financial difficulties. Catherine Fischer said the issues with the Cerrito are in large part to blame for the closure of the Parkway.
"It's essentially destroyed our business," she said. "Our company was growing until the point at which we started working on the Cerrito. We took our energy and put it into developing the theater for El Cerrito."
In April, the Fischers notified the city of El Cerrito that they would be closing the Cerrito, but later rescinded that announcement. The theater remains open.
City staff have begun informally looking for a new operator. But City Manager Scott Hanin said getting a commitment is tough while the situation with the Fischers remains unsettled.
"Folks want the board to act," Hanin said. "They don't want to be criticized within (their industry) that they're the reason for (the problems)."
Catherine Fischer said it was frustrating for her and her husband to hear the city is looking for a new operator.
"We put in all of our savings, all of our time," she said. "We built it up to profitability (in 2008), and now they want to move on to someone else. There's not even a thank-you — just, 'We're going with someone new, so sorry, too bad.'"
Still, when asked if she and her husband want to continue operating the Cerrito, Catherine Fischer said, "I don't know. The relationship has been difficult."
The agency is expected to discuss the Cerrito Theater again at it's May 18 meeting.
Reach staff writer Shelly Meron at 510-243-3578 or firstname.lastname@example.org
Read the El Cerrito city staff report on the Cerrito Speakeasy Theater at www.ContraCostaTimes.com/ElCerrito.