Up until theaters had to shut their doors and eateries were limited to takeout and outdoor dining options because of Covid-19, Cafe Lumiere and the Osio Theater were hubs of community activity. Lumiere was a favorite study spot and gathering place. The Osio was the only theater in Monterey County that featured exclusively art house and indie films.
Located on Alvarado Street, with an additional entrance on Calle Principal, the businesses had been a draw to downtown Monterey since their inception (2000 for Osio and 2013 for Cafe Lumiere). The Osio struggled through multiple rounds of ownership, even closing for a time before reopening in 2017 and then converting to a nonprofit in 2019.
The success was short lived. By fall 2020, both beloved businesses announced they were permanently closing – but not because of Covid-19.
“We were doing really well. It had to do with our landlord,” says Brandi Lamb, owner of Cafe Lumiere and Executive Director of the Osio Theater.
The closure was in large part because the developer of the mixed-use Osio Plaza building, Green Valley Corporation hasn’t paid on their past-due loans to the property owner, the city of Monterey. And those parties are in ongoing negotiations.
According to correspondence obtained by the Weekly via the California Public Records Act, Green Valley Corporation and the Urban Renewal Agency of the City of Monterey (now just the city) entered into an agreement in the late 1990s where at the end of a 50-year period, the city would own the entire building, not just the land. To help fund the project, the city loaned Green Valley an initial $2.2 million in 1998, followed by another loan of $365,000 in 1999. The low-interest loan would not have to be repaid until July 28, 2019.
Twenty years later, Green Valley has yet to repay any amount of the loan. The city started sending default notices to the San Jose-based developer as early as September 2019. But by the looks of it, Green Valley doesn’t have any plans to make good on the loan, proposing instead that the city take full ownership of the property 30 years ahead of schedule. The two entities have been in negotiations since the winter of 2019, with the last set of discussions happening on Dec. 9 during a closed-session Monterey City Council meeting.
In a letter to the city dated Feb. 10, 2020, Green Valley representatives highlighted that the cost of developing the property was over $5 million and the importance of the building not just as much-needed affordable housing, but also as a cultural hub.
However, they also wrote that the theater and the housing were weak revenue generators, and noted Osio’s multiple changes of ownership: “The reality is that the theater component has a history of operators that have struggled to succeed (much less survive) in operating the five screen arts theater which was a required component of the project.” Of the affordable housing: “[It is an] important service to the community, it offers little room for any financial growth with mostly stagnant rents.”
Entering into a new year, the negotiations are still ongoing. Green Valley owes the city $2.5 million to date. Green Valley representatives did not return multiple requests for comment.