A Fresno County judge has denied Adventure Church’s motion to halt the sale of the Tower Theatre to the city of Fresno.
In a tentative decision issued Wednesday, Judge Kristi Culver Kapetan ruled that the church could not show its original agreement could be completed because a tenant on the property had the first right to buy its building.
“But (Adventure) Church has not shown how the court can possibly order specific performance of the PSA (purchase contract) under the circumstances of this case. Church’s contract is to purchase the entire Parcel, which includes the Premises to which J&A (parent company of Sequoia Brewing Company) has a right of first refusal that, per the Court of Appeals, is valid and enforceable,” Culver Kapetan wrote.
The judge also found that the church does not have the funding ready to make the purchase, despite the church’s claims otherwise.
Adventure Church plans to challenge the tentative ruling. An oral argument is scheduled for Thursday afternoon. Escrow is set to close on Friday.
Church Had Agreement to Buy in 2020
Adventure Church offered $3.9 million in September 2020 to buy the theater properties. A key question is whether that offer expired on March 31, 2021.
Culver Kapetan answered that in her ruling.
“Communications leading up to the March 31 expiration date indicate that, while the parties intended to work together to come up with some sort of deal to sell the Property to Church, the deal as outlined under the PSA was dead,” she ruled.
While the ruling deals a major setback to the church buying the theater, Culver Kapetan says the church can seek damages.
“The court does not express an opinion regarding whether Tower otherwise breached the PSA (sales contract) with regards to its disclosures, or in entering into the PSA without first satisfying J&A’s rights under its lease. But Church’s remedy for any such breaches would be damages, not specific performance, and there is no reason to enjoin the pending sale to the City and J&A,” the judge ruled.
When the Fresno City Council agreed to purchase the theater in April for $6.5 million, it also agreed to absorb all legal ramifications. This could mean taxpayers will be on the hook for any damages, plus the cost to defend Adventure Church’s lawsuit.
Legal Arguments Leading Up to Ruling
In a court brief, attorneys for the theater said it was wrong to call this the “Tale of Two Towers,” but rather it is the “Tale of One Contract.” Its reasoning is that the contract of Sequoia Brewing Company supersedes any church claim.
Tower is also claiming that overlooking Sequoia Brewing’s right of first refusal was a “bilateral” mistake and thus should void the contract with Adventure Church.
Two times during the sales process, Tower Theatre has been accused of dealing in bad faith.
The first time — J&A Mash & Barrel, the parent company of Sequoia Brewing Company, a theater’s tenant — successfully argued its right to buy the property first was not honored. Its lawsuit scuttled the sale to Adventure Church.
In turn, Adventure Church sued Tower Theatre for bad faith as well. It also accused the theater of double-dealing — meeting with the city of Fresno in January 2021 while a sale with the church was already in place.
City leaders felt pressure from weekly protests of the sale to the church. Every Sunday morning starting in January 2021, crowds gathered outside the theater while Adventure Church parishioners prayed inside.
Demonstrators argued that the church was not the right fit for the Tower District, that the church’s perceived views on the LGBT community were not in line with the neighborhood, and religious use of the theater violated zoning laws.
Mayor Jerry Dyer offered the use of the Veterans Memorial Auditorium. The church declined. The city publicly explored using eminent domain to take either the theater, the parking lot, or both. A judge granted the city’s request to force the theater to allow an appraiser in the building.
The city offered to purchase the theater in Feb. 2022 for $4 million. The church called this “a blatant display of interference.”