Cape May HPC Says No to Demolition of Beach Theatre

CAPE MAY- In a 5-2 vote Jan.20, the city’s Historic Preservation Commission (HPC) denied Frank Theatre’s application for a certificate of appropriateness that would have allowed demolition of the Beach Theatre, the city’s last remaining movie theater.
Frank Theatres held a certificate from HPC that would have allowed the city to issue a demolition permit but it expired in November 2008. The theater chain received preliminary site plan approval from Cape May’s Planning Board to build six, three-bedroom condominiums above nine existing retail stores fronting on Beach Avenue. The front facade of the theater would remain as well as the shops but the auditorium would be demolished.
Bruce Frank, president and CEO of Frank Theatres, told the Herald he would appeal HPC’s decision to the city’s Zoning Board.
“It doesn’t change our plans about the theatre,” he said. “It will not open this year and may not open again.”
Frank said he was prepared to go beyond the zoning board to Superior Court if the zoning board does not overturn HPC’s decision. He said when he purchased the Beach Theatre in 1986, there were no restrictions.
Frank said to have restrictions imposed at a later date was tantamount to a taking of his property and a taking of his rights. He said a theater was not the highest and best use of that property.
“If the goal was to have a movie theater, they have lost that possibility in today’s forum with our company,” said Frank.
He asked what would the Beach Theatre look like five to 10 years from now.
“If the theater remains like it is and is closed, what did you do as a member of the board?” Frank asked. “You’re left an antiquated and old building.”
A large crowd attended the meeting which lasted almost four hours, according to HPC Chairperson Mary Ann Gaffney. She told the Herald members of the public spoke for about an hour against the building being demolished.
The audience frequently applauded statements made in favor of preserving the theater, said Gaffney, as well as applauding when the denial vote from HPC was announced.
Two historic preservationists, Wayne McCabe and Jean Kolva, who are updating the list of historic structures in Cape May for the HPC, presented expert testimony as to the historical significance of the Beach Theatre.
Gaffney said several non-profit groups interested in operating the Beach Theatre were present at the meeting.
Bernie Haas, treasurer of the Beach Theatre Foundation, read a statement on behalf of the organization which operated the theater from November 2007 to December 2008 after cleaning and patching up the building.
While the foundation held a lease and purchase option, it was legally bound not to oppose Frank Theatre’s development plans for the property, said Haas. In his statement, he noted a recommendation from preservationist Joan Berkey that the theatre appeared eligible to be listed on the state and national registers of historic places.
He said both the city’s HPC and planning board adopted resolutions last year recognizing the Beach Theatre as a key contributing historic site.
Haas said the foundation had conducted feasibility studies and design work that suggests the theatre can be redeveloped and preserved. He expressed concern as to the whereabouts of murals that formally were located behind drywall in theater lobby. Following asbestos removal by Frank Theatres, he said he saw holes in the walls of the lobby.
Haas noted Frank Theatres had set a price of $12 million for the foundation to purchase the theater which he described as far above market value.
Resident Jean Powick, who discovered last year the demolition certificate had expired and was not covered by an extension from Gov. Jon Corzine, presented a financial analysis of the proposed sale price of the theater.
Powick, using figures from a request for qualifications complied by the Beach Theatre Foundation for potential buyers of the theater, estimated the fair market value of theatre was no more than $4 million based on rental income from the 13 retail stores adjacent to the theater, based on a 5 percent return on their investment after property taxes.
Powick said the city assessed the theater at $3.5 million.
The Beach Theatre complex includes eight shops on Beach Avenue totaling 15,413 square feet and five shops on Gurney Street totaling 3,630 square feet. The foundation’s report said annual rental income was $495,000. Common area maintenance cost for the theater complex annually was listed as $69,500.
Powick said that revenue stream would cover any mortgage payment on the theater. If a non-profit organization bought the theater expecting a zero percent return on their money, the value of the theatre would be about $6 million, she said.
The Beach Theatre would be viable as a theatre if priced right, said Powick. She said the Beach Theatre was priced beyond where an investor could get a proper return.
Powick told the Herald she believed Frank Theatres paid only $2 million to purchase the Beach Theatre in 1986.