A Hennepin County judge has denied a request for a restraining order to save the Terrace Theatre in Robbinsdale, clearing the way for its demolition.
Monday's decision ended a last-ditch grass-roots effort to save the 1950s theater from the wrecking ball.
"If demolished, the Terrace Theater, one of the first ultramodern theaters in the country will be permanently lost," Friends of the Terrace had written in court documents.
The group sued in August, saying that demolition was a violation of the Minnesota Environmental Rights Act (MERA). But Hennepin County District Judge Michael Browne denied the request for a temporary restraining order.
Friends of the Terrace had targeted the theater owner, Brixmor Property Group, a New York-based investment firm.
Brixmor countered that stopping development would allow a structurally deficient building to sit vacant, posing a safety risk. The building has water damage, mold and a collapsing ceiling and roof, and it would cost about $2.4 million to bring it up to code.
"There is simply no viable commercial market for a renovated movie theater such as the former Terrace Theater, whether that property is used as a movie theater or some other commercial use," Brixmor said in court documents.
St. Louis Park-based Inland Development Partners announced plans in June to redevelop the theater and half of the mall into a 91,500-square-foot grocery store, a convenience store, coffee shop and gas pumps. A Rainbow Foods closed on the same site in 2013.
According to court documents, the development company has agreed to pay $5.2 million for the property and already has invested several hundred thousand dollars on the project.
When preservationists gathered more than 1,000 petition signatures calling for a boycott of the new Hy-Vee, the Des Moines-based grocer put its plans on hold, telling the city and developer to decide the theater's fate before it would proceed.
The City Council has unanimously supported plans, saying it will revitalize 10 acres off 36th Avenue and W. Broadway. It would also result in a 503 percent increase in property taxes, from about $69,000 a year to $418,500 a year, according to court documents.
In a survey asking residents whether they favor having a Hy-Vee store, 85 percent of 1,600 residents said "yes." A petition by Save the Terrace, a group affiliated with the local historical society but not part of the lawsuit, gathered more than 2,000 signatures.
"This project has the potential to be a catalyst for redevelopment in an area that is sorely in need of serious attention and redevelopment," the city, through its Economic Development Authority, wrote in documents. " ... [the preservationists'] pleas have come too little and too late, not to mention flying in the face of the majority of public sentiment."