Preservationists lose last-ditch effort to save Terrace Theatre in Robbinsdale

Last-ditch efforts by a preservation group to save the Terrace Theatre in Robbinsdale ended Friday after the group was unable to come up with $6.3 million to halt demolition.

The 1950s theater can now be demolished, resuming work that started last week before the Friends of the Terrace rushed to get a judge to sign an injunction stopping the work.

"It's sad; it's another piece of history that's gone," said Susan James-Morrow, a lifelong resident and head of the group. "I'm disappointed in the leadership of the city. It's emotional."

The group sued the theater's owner, Brixmor Property Group, but was denied a temporary restraining order. On Thursday, the group's appeal to the state Court of Appeals also was denied.

While the group won a temporary delay in demolition from Hennepin County District Judge Michael Browne, he also ordered the group to post by Friday a bond of $2.8 million to the owner, and $3.5 million to the city's Economic Development Authority, which is made up of the City Council.

James-Morrow said the $6.3 million was 40 times more than required in cases like this — with the largest bond being $150,000 — setting a precedent for future preservation cases. The Minnesota Preservation Alliance, which stepped in to be the group's fiscal sponsor in fundraising, called the amount "excessive."

St. Louis Park-based Inland Development Partners announced plans this summer to redevelop the theater and half of the adjacent mall into a Hy-Vee grocery store, a convenience store, coffee shop and gas pumps. A Rainbow Foods closed on the same site in 2013.

In court documents, Brixmor Property Group said that the theater, which closed in 1999, has water damage, mold and a collapsing ceiling and roof. It estimated that the cost to bring it to code would be about $2.4 million.

The City Council has unanimously supported the redevelopment, saying it will revitalize a blighted 10 acres off 36th Avenue and W. Broadway and create 700 jobs. It would also generate more property taxes — about $418,500 a year, up from $69,000.

Friends of the Terrace's attorney Erik Hansen, who fought renovation plans for Minneapolis' Peavey Plaza, said it's the first case he's seen in which a city advocated for destruction of a historic building.

Demolition of the theater took on new urgency for the city in August after Hy-Vee said plans to open its seventh Twin Cities store were "off the table" until the theater's fate was decided. It came after hundreds of people signed a boycott of all Hy-Vee stores. Within that week, a demolition permit was approved by the city, but work tearing down the theater was delayed when the Friends of the Terrace filed a lawsuit alleging that it violated the Minnesota Environmental Rights Act (MERA).

While she thought they had a strong case, James-Morrow said, the $6.3 million was too much to raise for the grass roots group.

The group still plans to hold an event Nov. 5 to honor the theater. The 1,300-seat theater, designed by local theater architects Liebenberg and Kaplan, marked its 65th anniversary earlier this year.

"You realize how important it is to the city's history and they can't see it," James-Morrow said. "Someday they'll regret it. … Their children or ancestors will say, 'Why did you tear that down?' "

Kelly Smith • 612-673-4141