Legal battle over Plaza Theatre entryway intensifies between city, property owner

While Palm Springs may have an agreement in place with a restaurant whose current patio seating will be taken by the city as part of the Plaza Theatre restoration, a settlement with the owner of the property the restaurant sits on continues to run through the courts and could delay a planned December opening.

Last November, the Palm Springs City Council approved the use of eminent domain to take the patio used by Kalura Trattoria, which has been operating in the location for more than 20 years. City officials announced a settlement with the restaurant’s owners earlier this month to compensate them for loss of the use of the space.

The settlement reportedly provides $500,000 to the owners for the loss of their outdoor patio and includes the promise of a new dining area in the city’s right of way in front of the restaurant with seating for 60 people. What is not settled, however, is an agreement with the owner of the actual property the restaurant sits on, Grit Development.

The city filed a complaint in December seeking to acquire a permanent easement on Grit’s property – the patio. Plans call for the space to be used not only for safer theater access, but also events and VIP reception areas. Riverside County Superior Court documents show the city has reserved roughly $600,000 as possible compensation for Grit.

Last week, in a response to the city’s complaint, Grit challenged the taking of its property on several grounds. While the company does argue the value of the patio is higher than what the city has set aside, documents show it’s not just higher compensation at issue.

One objection focuses on the city’s relationship with the Palm Springs Theatre Foundation, headed by a former member of the City Council, J.R. Roberts. Grit’s legal team argues the city has improperly delegated decision-making power about the scope of the taking to the private foundation, asserting it violates California law requiring such decisions be made by the council.

Grit also alleges the taking is “pretextual,” arguing that while the city claims it’s being done for public use, the primary beneficiary will be the future private operator of the Plaza Theatre, Oak View Group. The distinction matters because government entities can only use eminent domain for public purposes, not private benefits.

Grit also claims it was given only five minutes to present objections at the City Council hearing on the resolution of necessity for the taking. The company maintains this was insufficient time to present their case, and that further attempts to negotiate the terms have since been rebuffed.

The city, through Communications Director Amy Blaisdell, refuted the claims on Monday afternoon.

“The City of Palm Springs has not and cannot legally give authority over the decision-making power regarding any real estate or legal proceedings to anyone,” a statement released by Blaisdell said. “Any claim to the contrary is false.”

To be clear, Grit maintains it supports the theater’s restoration but argues it “needs to be done correctly.” It’s seeking not only to block the taking but, if unsuccessful, to receive additional compensation for property value, business disruption, and damages to their remaining property surrounding the building.

The theater, which opened in 1936 with the premiere of Greta Garbo’s “Camille,” has been vacant since 2014 when the Fabulous Palm Springs Follies closed. If all goes as planned, it will reopen in December of this year.

Depending on the outcome of the legal proceedings, however, the city may be required to start the eminent domain proceedings over, putting the opening date of the theater at risk. The next court hearing is currently scheduled for May.

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Editor’s note: This story was updated with the city’s response one day after it was first published. A story with a response from both the city and the Plaza Theatre Foundation can be found here.

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