The City of Fresno is set to swoop in and purchase the historic Tower Theatre, an action that will likely kickoff a new lawsuit against the City.
Fresno City Councilmembers Esmeralda Soria and Miguel Arias are sponsoring an agenda item on the agenda for Thursday’s meeting that would have the city purchase the entire Tower Theatre property for $6.5 million.
“Tower Theatre is a historic icon for the community, and I am very pleased this item is being brought before the City Council for our consideration of the purchase of Tower Theatre for the community’s use and enjoyment,” Soria said in a statement.
Arias added, “The Tower Theatre has been the economic anchor for our Tower District for generations. Our small businesses and residents want to preserve our historic jewel so they can continue to invest and thrive in the Tower District.”
As part of the deal, Sequoia Brewing will purchase its portion of the theatre complex for $1.2 million – financed by taxpayers – bringing the city’s total purchase price down to $5.675 million.
If the council passes the resolution, the city would also indemnify and defend Tower Theatre Entities and Sequoia Brewing from any potential litigation that could arise.
Adventure Church is currently leasing the theater for its Sunday services and agreed to a $4.815 million deal in October 2020 to purchase the theater.
The church is currently in the middle of a breach of contract lawsuit against theater ownership and announced Monday it will pursue legal action against the city if the council votes to purchase the theater.
In a statement provided to The Sun, Adventure Church attorney David Emerzian said the church is in the process of amending its lawsuit to include claims against the city for contract interference, violating the Religious Land Use and Institutionalized Persons Act, violating the eminent domain law and violating federal equal protection rights.
The church will also add claims against Tower Theatre Entities and owner Laurence Abbate for intentional and negligent misrepresentation.
Emerzian said that the city’s decision to purchase the theater, defend the claims and pay out any cost that will be awarded by a judge could cost taxpayers between $10 and $15 million.
“All of this could be avoided if the City of Fresno would simply stop interfering with the church’s right to purchase the Tower Theatre Property and allow the church to close escrow,” Emerzian said. “We have repeatedly asked the City of Fresno to stop interfering with Adventure Church’s contract, allow Adventure Church to close escrow, save the taxpayers of the City of Fresno millions of dollars and use that money for real problems in the City of Fresno, like the homelessness and crime that plagues our city.”
According to the staff report for the resolution, the sale agreement between theater ownership and Adventure Church expired in March of last year because the church did not deposit the full purchase price for the property in escrow.
Adventure Church disputes the city’s claim that escrow expired, with Emerzian saying the the church made all required deposits and down payments.
Chicago Title Company has held $833,000 of Adventure Church’s money for more than one year, which includes the initial deposit of $40,000 and a down payment of $793,000.
The church allowed Chicago Title to release $15,000 of the deposit to Abbate to allow Abbate to pay his attorney’s fees in the lawsuit that Sequoia Brewing filed against theater ownership regarding the right of first refusal option to purchase in its lease agreement.
Escrow officer Sue Meyer confirmed to Emerzian in an email on April 7 that she never prepared nor received any cancellation instructions and that escrow is still open, directly contradicting the city’s claim that escrow expired in March 2021.
The city’s part of the Tower Theatre saga started in December 2020 when it addressed concerns that Adventure Church would be violating zoning laws by operating a church at the theater.
On Dec. 10, 2020, the city wrote in a letter to Adventure Church saying the church could operate the Tower Theatre as a church and a theater if the sale went through.
One month later, however, then City Manager Tommy Esqueda revised the letter saying the church would not be allowed to operate in the theater as a religious organization.
Emerzian said the letter was clearly sent in an attempt to dissuade the church from completing the purchase, but Adventure Church said it would not be discouraged and intimidated by the city’s “abusive and illegal intimidation tactics.”
On January 11, 2021, Soria, her then chief of staff Terry Cox and Arias held a meeting with Abbate and expressed the city’s interest in possibly purchasing the theater or acquiring it through eminent domain, according to a signed statement by Abbate.
Later in the month, Mayor Jerry Dyer offered Adventure Church a deal to use the Fresno Memorial Auditorium in downtown, which the church rejected.
For the next year, the city council discussed the possibility of purchasing the Tower Theatre during closed session meetings, culminating in an official offer to Abbate on Feb. 2.
If approved, the city will make the purchase with a combination of General Fund and Measure P parks tax revenue.
Along with the $6.5 million sale price and the provision to cover future legal expenses, the deal also gives Abbate a one-year contract to continue managing the theater, which will pay him $8,000 per month.
