New debate surrounds New Mission Theater

The theater is "an excellent an intact example of a 20th Century movie palace," according to its 2004 landmark designation.
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The New Mission Theater, a dilapidated landmark that sits on the 2500 block of Mission Street, has been vacant for years, but controversy surrounding its fate is alive as ever and will be discussed at this afternoon's July 29 City College of San Francisco Board of Trustees meeting.

In 2004, the city designated the theater as historically significant for its ties to the Mission's early 20th century "vaudeville and movie house district." Once upon a time, patrons regularly circulated through its palacial interior, which features Art Deco-syle ornamental metalwork at the ballustrades, plaster moldings imprinted with Greek key motifs, etched Art Deco glass panel doors, ceiling ornaments with floral motifs, and a balcony adorned with a frieze of garlands and urns, according to a landmark designation file.

Plans to restore and reopen the theater have been in the works for several years, and a 100-percent affordable housing development adjacent to the theater could move forward if everything falls into place. That's turning out to be a big 'if.'

In 2005, CCSF sold the theater, along with an adjacent shuttered Giant Value store, to Gus Murad -- Medjool restaurant owner and a former small business commissioner appointed by Mayor Gavin Newsom -- for $4.35 million, according to CCSF counsel Greg Stubbs. Now, CCSF is considering initiating foreclosure proceedings against Murad due to nonpayment. He owes more than $2 million on the property, according to notice of default issued June 21. During open and closed sessions at the July 29 Board of Trustees meeting, trustees will decide whether to proceed with taking back the property from Murad or grant him a 120-day extension. Murad is expected to offer his pitch for an extension at the meeting.

CCSF board member John Rizzo told the Guardian he was fed up with the missed payments. "Gus Murad keeps assuring us, oh yes, it's going to happen, we're on the verge," Rizzo said. "But the affordable housing is not being built," he said. If CCSF took the property back, "we wouldn't sell it for market-rate housing," he added. "We would want to see affordable housing."

P.J. Johnston, a spokesperson for Gus Murad, declined to answer questions about possible foreclosure but told the Guardian that the central goal is to create 85 to 100 affordable units in the heart of the Mission. "We've been working with Mission Housing and hopefully are very close to a reaching an agreement with Mission Housing and the Mayor's Office of Housing, which would obviously be a chief funder of the project," he said.

Securing financing and reaching a deal with Mission Housing and the Mayor's Office of Housing would allow Murad to square things away with CCSF, get the ball rolling on the development, and get something out of his investment.

Murad initially planned to develop market-rate housing on the lot curently occupied by the Giant Value storefront, but switched to an affordable housing project 1.5 years ago, Johnston said. Plans have always included rehabbing the theater. Negotiations with Bernal Housing came close to a deal, but ultimately fell through, he said. Now, Murad is hopeful that CCSF will grant a 120-day extension and a deal with Mission Housing can be secured in time.

"It has been a challenging time for the economy as it relates to land use," Johnston said. "And it's been a very difficult couple of years for restaurants."

Mayor's Office on Housing Director Doug Shoemaker declined to comment for this story.

Chris Jackson, a trustee, said he worried that if CCSF were to move ahead with foreclosure, "it'll probably scuttle the affordable housing project. I'd rather wait an extra four months to bring affordable housing than just put the screws to the guy," Jackson said. "If it was a market-rate project, I'd be like no, give us the money." Jackson said under state law, any funds generated by a sale of the property -- which was originally purchased with bond money -- would have to go back into the capital project fund, and couldn't go into college's operations budget. "It won't go to save one class at City College," he explained. "It just goes into capital project reserves."

Rizzo noted that certain "political forces" aligned with Newsom had been contacting board members in advance of the meeting to try and persuade trustees to grant an extension for Murad, who will clearly benefit if he is allowed to hold onto the property. Murad has hosted campaign fundraisers for Newsom in the past and has contributed to campaigns of the mayor's political allies. It isn't the first time the New Mission Theater development has generated political buzz.

When an earlier incarnation of Murad's plans for the New Mission Theater and adjacent lot came before the Board of Supervisors in Feburary of 2009, it generated some controversy. Murad had won approval from planning staff for a 20-foot height extension that would have brought his housing project to 85 feet, but that was rejected by the Board of Supervisors. In an odd twist, a typo kept the 85-foot limit intact, so the Board was required to vote again to bring it down to the 65 feet they approved. When Mayor Newsom vetoed the board's second vote, Sup. Chris Daly lambasted Newsom for engaging in "pay-to-play politics."