Financial hiccup for Maya Cinemas project

By Andrew Edwards
Staff Writer

SAN BERNARDINO -- Maya Cinemas chief executive Moctesuma Esparza said Tuesday that it may still be possible to show movies at a downtown cinema in time for the holiday season, despite a need to restructure a related loan application.

Esparza and Emil Marzullo, interim director of the San Bernardino Economic Development Agency, both said Tuesday that Maya Cinemas will have to assume about $4.5 million in debt to remodel and reopen a downtown movie theater.

"We're prepared to do that. That's never a problem," Esparza said."

Maya Cinemas had initially proposed to accomplish the project without public financing.

Downtown San Bernardino has been without a movie theater for nearly a year. Former exhibitor CinemaStar abruptly shut its doors in September 2008 and Los Angeles-based Maya Cinemas soon emerged as the most likely successor.

The 20-screen theater is near the crossing of Fourth and E streets, adjacent to California Theatre of the Performing Arts. The remodeled cinema is set to include an IMAX screen for large-format movies.

In April, a City Council majority voted to let the EDA apply to the U.S. Department of Housing and Urban Development to borrow $9 million to finance Maya Cinemas' project.

The money would have been borrowed against San Bernardino's future allotments of Community Development Block Grants in what's called a Section 108 loan.

In May, the council voted to extend the deadline for Maya Cinemas to complete the first phase of its project to Dec. 31.

EDA officials had hoped that the loan would have been approved by mid-July.
"Every procedural delay delays construction," Marzullo said.

Marzullo said federal officials are not opposed to the cinema project. However, granting the loan request would have resulted in San Bernardino borrowing above its Section 108 limit.

San Bernardino already has $10 to $11 million in outstanding Section 108 obligations, Marzullo said.

EDA officials had planned to use about half of the requested loan to retire pre-existing debt. The new approach would have Maya take on that responsibility, but Marzullo said that deal has yet to be put into writing.

Maya Cinemas personnel are allowed to work in the theater while financial details get hammered out. Esparza said architectural, engineering and design work are ongoing.

However, Esparza said it has been discovered that some aspects of the building are not up to code. He said the time it takes to solve those problems could have a greater impact on Maya Cinema's opening date than the loan application, but his company wants to show movies by the end of December.