Atascadero City Council to consider next step in movie theater conflict

The applicant seeking to build a second movie theater in Atascadero won’t attend the City Council meeting tonight on the proposed La Plaza Cinemas because the issue has gotten too political, he said.

Months of discussion over the prospect of a second theater nearly across the street from the competing Galaxy Theatres now under construction — in a development subsidized by city taxpayers — has ignited wide speculation in the North County community.

One side claims the council is trying to stall La Plaza to satisfy taxpayer and lender investments it has in Colony Square, while the other side says city leaders are simply looking out for the success of downtown.

The council is not expected to vote on the issue tonight, but having the item on the agenda would allow the council to tell city staff what to do now that La Plaza planners won’t agree to a third-party feasibility study the council required in May.

La Plaza applicant Larry Wysong says his absence doesn’t mean he’s not sticking with his project.

“I’m open to sitting down and having a conversation with the city on what to do next,” he said Monday, but he refuses to further inflate the issue with public debate.

The dual-theater feasibility study was to be paid for by both theaters — Galaxy has offered its share. The council required it before moving forward with its consideration of granting La Plaza a conditional-use permit to build along El Camino Real across from the Sunken Gardens.

Wysong said he and his associates — John Roush, a movie theater operator, and Mike Sherer, a real estate broker — have done their own business model projections that say La Plaza can be successful, and they say that study should be enough.

The council says it needs a third-party conclusion because La Plaza and Galaxy publicly disagree whether the market could support 20 screens.

Mayor Roberta Fonzi said the council wants to collect as much information as possible in order to be the best steward over taxpayer money spent on Colony Square.

Earlier this month, Wysong wrote a letter to the council, slamming it for requiring a private business to prove it can compete in a free market and claiming the council was only doing so as a stall tactic to keep Galaxy onboard.

In a May letter to the city, Galaxy representatives said they were no longer certain their theater had a future in Atascadero if La Plaza were approved.

Wysong and other critics say that ever since Galaxy’s letter, the city has been throwing up roadblocks, listing the feasibility study as one of them.

They’re also suspicious of an e-mail Colony Square lenders sent to the city stating that at least one board member would not have supported the loan if they knew another cinema would be building in the same area.

Before the letter and e-mail, the Planning Commission supported the project with a 6-1 vote.

Fonzi says the council has no ties to a certain project.