A Fresno County judge issued a temporarily restraining order Wednesday, blocking the sale of property connected to the historic Tower Theatre.
Judge Rosemary McGuire’s ruling is designed to allow time to resolve questions raised over a ‘right of first refusal’ clause in a lease affecting a single building, but which is part of the property being sold to a local church.
Sequoia Brewing Company, through its parent company J&A Mash & Barrel, LLC — asked for the court to block the sale of the building it leases from the theatre’s current owner. The legal argument was based on a contractual conflict rather than flashpoint issues such as zoning.
“What we asked the court for today and received was just to slow down the process, to allow our rights to be considered because we felt that they weren’t being considered,” Kimberly Mayhew, attorney for Sequoia Brewing Company, told the media.
Both Tower Theatre Properties, Inc. and Adventure Church were named as defendants in the case. They were represented by separate attorneys.
McGuire urged the parties to negotiate a resolution to the dispute.
The TRO case will return to McGuire’s court on March 17.
Future of Tower Theatre Sale Unclear
“I don’t know the answer to that. Hopefully we will find out something soon.” — Tower Theatre owner Laurence Abbate
It is unclear whether the decision will hold up the sale of the remaining buildings, including the Tower Theatre itself, and other property included in the transaction. The sale is scheduled to close escrow on Friday.
“I don’t know the answer to that,” said Laurence Abbate, whose family has owned Tower Theatre for almost 80 years. “Hopefully we will find out something soon.”
Other attorneys involved did not have an answer either.
“I imagine it will have some effect. I don’t know what that will be yet,” David Camenson, attorney for the Tower Theatre, said after the hearing.
Nathan Klein, attorney for Adventure Church, did not offer a comment.
Sale Opposed by Tower Neighbors
The proposed sale to Adventure Church has faced backlash from the Tower District community. The opposition has argued that, based on an assessment by Fresno city officials, the theater is not zoned to hold religious assemblies. The church disagrees.
Also, nearby businesses are concerned that their proximity to a church-owned property may affect their licenses to sell liquor or cannabis products, or to operate dance clubs.
Opponents have held weekly rallies across the street from the theater on Sunday mornings. Until recently, the church held in-person services twice a week at the theater.
Tenant Sought Injunction
The sale of the Tower Theatre complex includes the iconic theater and three other buildings, leased by restaurants.
Sequoia Brewing Company filed its lawsuit last week, arguing that it has the right of first refusal to purchase the building it leases. Those rights were denied when the church revealed it was in escrow to purchase the building last December.
“It’s kind of a technical legal argument,” Mayhew told the media after the hearing. “If this had been an option, everything would have been laid out in the lease contract and we wouldn’t probably be having this fight.”
The restaurant/brewery claimed in its lawsuit that the owner of the Tower Theatre properties would not provide a figure to purchase the building it leases. The theater, in its court filings, included a Feb. 18 letter between the attorneys revealing a $1.268 million price tag.
The lawsuit applies just to the building Sequoia Brewing Company leases, and not to the theater or other parts of the property.
Opponents of the sale created a legal defense fund, soliciting donations through GoFundMe. As of Wednesday afternoon, the fund has raised more than $40,000.
Mayhew could not talk about payments from her clients and how the fundraising dollars may be used.
Defendants: Option to Buy, Not a Right
“If this had been an option, everything would have been laid out in the lease contract and we wouldn’t probably be having this fight.” — Kimberly Mayhew, attorney for Sequoia Brewing Company
According to court documents filed Tuesday by Tower Theatre Properties, Inc., Adventure Church proposed buying the theater complex in August 2020.
Rebutting the right of first refusal argument, the theater argued that Sequoia Brewing Company does not have that right, but rather an “option to purchase.” That option can be executed regardless of who owns the property.
Judge McGuire did not tip her hand on the option versus right of first refusal argument, that emerged as the central controversy in the case. Both sides will submit briefs in the coming weeks. Witnesses may be called at the next hearing as well.
The theater also argued that Sequoia Brewing Company would not be harmed because they can still make the purchase under its option.
In court documents filed by Adventure Church — through attorney Nathan Klein of Tyler & Bursch — argued that the restaurant/brewery did not respond with its intentions to purchase the property during the 12 day window after being notified and likely does not have the financial means to buy the building.
The church said it would give Sequoia Brewing Company until March 31 to make an offer to buy.