Council Agrees to Sell Balboa Theater for $1M to LAB

0
72
Share this:
An artist’s rendering of The LAB’s vision for the Balboa Theater. — Photo courtesy of the city of Newport Beach ©
An artist’s rendering of The LAB’s vision for the Balboa Theater.
— Photo courtesy of the city of Newport Beach ©

Newport Beach City Council this week unanimously approved the sale of the historic Balboa Theater to a local developer for $1 million

Council voted 6-0 Tuesday to sell the E. Balboa Boulevard property to Lab Holding, LLC.

LAB founder Shaheen Sadeghi thanked the council for their vision to preserve the historical building, located in Balboa Village near the Balboa Pier, between Washington and Main streets.

“We’re very excited about restoring the building,” Sadeghi said. “In very simple form, we are purely interested in preservation.”

Saving these types of buildings preserves an important part of the community, he added.

“We have a terrible habit in this country to tear down our past,” Sadeghi said.

The idea is to bring the building back to its original glory and preserve the authenticity, he explained. There is some elegance in the original structure and what it stood for, Sadeghi said.

LAB estimates they will spend approximately $2 million on the remodel of the existing building to meet current code requirements, according to the staff report.

They plan on restoring the original architecture of the theater, including a marquee possibly designed in the original 1920’s wrought iron style or the historic neon style, according to the LAB’s written proposal. They also plan on restoring the entryway with the two side bays re-established as storefronts for an on-site café and box office.

The interior will be restored and repurposed for flexible, multi-use events and performances. The proposal also suggests including a music room (standing room only) with a pub counter and an adjoining room for guests to rent for private events and celebrations.

“First and foremost, we view the Balboa Theater as a local historic treasure and as such should be repurposed to serve the local community, maintaining its original entertainment mission,” the proposal reads.

Sadeghi and his wife, Linda, started The LAB (stands for Little American Businesses) in 1993. LAB projects focus on small, local businesses and enhancing the community.  

Councilman Tony Petros commented that other LAB projects have consistently helped breathe new life into the community. This project will hopefully help create a vibrant neighborhood that people will flock to, help spur growth and revitalize the area.

“It will benefit the city immeasurably,” Petros said.

The property operated as a theater from the time it was built in the late 1920s, until it closed in 1992, according to the staff report.

The property was acquired by the city in 1998 for $490,000 using federal community development block grant funds, explained Assistant Community Development Director Seimone Jurjis. Any revenue that is received from selling the property must go back into the Federal Community Development Block Grant account for repurposing, he noted.

It was then leased to the Balboa Performing Arts Theatre Foundation. After the lease agreement between the city and foundation ended in 2014, Council directed staff to sell the property.

In June 2015, staff advertised the property for sale and received five proposals from private parties. The offer price ranged from $1.7 million to tear down the building and develop a mixed-use project, to $1 million to preserve the theater use.

They believed there was an opportunity to continue with the idea of preserving the theater, Jurjis said.

Staff approached the five proposal parties and asked if they would agree to a deed restriction that would be recorded on the title that would limit the use of the property to a theater or event center. Only two accepted the deed restrictions.

They reviewed the two proposal developer’s background and history, Jurjis explained. The building is almost a century old, Jurjis pointed out, and it needs “a lot of investment dollars.”

“So whoever was going to be awarded he opportunity to do that needed to have that experience of tackling these older buildings, historic, iconic structures,” he said.

It was also important that the selected party also have the background of operating this type of use, Jurjis added.

An appraisal report on the “highest and best use” valued the property at $1.625 million, and included tearing down the building and creating a mixed-use project with a commercial component and three housing units on top. Appraisal of the building “as is” and continuing use of the property as a theater came in at $890,000.

After a thorough review and selection process staff recommended beginning negotiations with the LAB. The city and the LAB came to an agreement after several months.

Sean Fitzgerald, speaking on behalf of the Discovery Science Foundation, the operator of Discovery Cube’s Ocean Quest, formerly known as ExplorOcean, in the “heart of Balboa Village,” strongly supported the LAB’s Balboa Theater project.

Ocean Quest has invested a lot of money and time in their own project and are clearly committed to seeing the village thrive and grow, Fitzgerald said, and the LAB’s idea for the Balboa Theater will help the community in the same way, he added.

Sadeghi is highly sought after for clear reasons, LAB projects are high quality, innovative, trendy and woven into the community, Fitzgerald said.

Councilman Ed Selich expressed excitement for what the LAB has in store for the historical theater.

“It may not be the highest amount of money we can get for the property, but I look at this as being a real investment in Balboa Village,” Selich said, “to help achieve a lot of the revitalization goals we’ve been trying to do over the years.”

Share this: