Morgan Hill's sleepy downtown includes antique stores, a high-end yarn shop, a falafel place and, of course, the iconic Granada theater, a community mainstay for more than half a century.

Now, the city plans to tear down the theater to make way for a controversial housing and retail development, complete with a new movie theater. Even though it's been closed for regular business since 2003, the Granada has become the site of a fight for the heart of Morgan Hill.

Lining up on one side is a majority of the City Council, convinced the best way to revitalize downtown is to tear down the theater and replace it with retail and housing, and build a replacement theater one block away.

But a group of citizens and local businesses say saving and renovating the Granada as a local entertainment center is key to the revitalization effort, and are making a last attempt after 18 months of battles through a petition drive to put the future of the theater on the November ballot.

"We think we've put out a fairly compelling business model," said Stephen Beard and Pamala Meador of the Save the Granada Foundation. "But we've been blocked every step of the way."

For the council, however, the Granada, which lies at the heart of downtown on a two-block stretch of land owned by the city's redevelopment agency, marks an expensive obstacle for a $40 million downtown realization.


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"For the last 18 months or so the subject of re-establishing cinema downtown has been on the table," said David Heindel, assistant to the city manager for downtown revitalization.

Heindel said that assessments by the city and the project developer, Barry Swenson Builder, estimate restoring the theater would cost at upward of $5 million, making building a new theater cheaper by as much as $3 million. Beard and Meador dispute the estimate, saying Swenson's assessments were for a luxurious renovation with many unnecessary features.

Swenson plans to replace the Granada with a development featuring a mix of retail space and housing. A new theater would be operated by Paul Gunsky, the owner of an existing cinema not two miles from the Granada.

But Beard and Meador have worked over the past two years to save the Granada and have also drawn support from the community, including more than 30 local businesses, which signed on to a letter calling on the city to reverse its decision to tear down the theater.

"We're not just a couple of kooks who want to save the theater," Beard said.

The group says the city should renovate the Granada and turn it into a mixed-use facility, showing movies throughout the month but also providing a space for theater, comedy and live concerts. They believe that such a use would provide more foot traffic to the city, bring in customers from further away and provide a cultural and economic impact beyond a conventional cinema.

The Granada opened in 1952, and remained open for more than 50 years. Although the city declared that the Granada was not a historic building, posing an obstacle for arguments about its longevity, Beard believes that it is central to Morgan Hill history.

"You can't have a building that's been 60 years in a community and not have some attachment," Beard said.

But Heindel is dismissive of the Granada's value, saying "This is not the Oakland Fox," referring to the Art Deco theater in downtown Oakland that can accommodate 1,500 to 2,800 people.

For Beard and Meador, however, the site has value beyond its famous "Granada" marquee, through its embodiment of Art Moderne architecture. The theater, which seats about 700, most recently featured two screens through the use of a divider in its main space, but under Beard and Meador's plans the Granada would become unified, able to serve both as one large projection screen or as a performance venue.

The issue has also charged local politics, with Morgan Hill Councilwoman Marby Lee seizing on the issue in criticizing Mayor Steve Tate, who she is running against in the fall.

Teri Schindler of the nearby Raggedy Heart gift shop is another who believes saving the Granada is important to the city's future.

"We're trying so hard to make this town work," she said.

Contact Eric Messinger at 408-920-5719.

Infobox1
Morgan Hill's Granada theater
Number of seats: 700
Screens: 2
Opened: 1952
Last open for regular business: 2003
City plan: Tear down, replace with housing and retail, build new theater a block away
Save the Granada Foundation plan: Renovate for movies, comedy acts, concerts