History is repeating itself. For the second time in less than a decade an owner of the downtown block that includes the Rialto Theatre is evicting the theater from space it is using rent-free without owning it or having a lease. But there’s a switch: the evictor seven years ago is now the evictee this time around.

On July 2, developers Don Martin and Scott Stiteler gave the theater’s foundation until Sunday (July 12) to vacate the privately owned spaces the theater is using on either of its entrance as well as detached building being for a green room and offices.

The eviction comes after Martin’s and Stiteler’s proposal to develop a multi-million dollar arts and entertainment complex in the Rialto block was effectively killed by the City Council after it voted to further delay approval of the project beyond a previously set June 17 deadline.

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Martin said a previous offer to lease the privately-owned space to the theater at below-market rates is no longer on the table.

“They have publicly come out and are trying to condemn this property,” Martin said. “My lawyer is telling me that it is kind of cross purposes to continue to offer the below-market rate because if it does go to condemnation, that helps set the value of the property.”

Martin says the theater has not negotiated in good faith.

“They want those properties, period,” he said. “They have always wanted those properties for nothing and they are not interested in working with us.”

The situation was the reverse in 2002 when Doug Biggers, now the executive director of the Rialto Theatre, was the landlord of the privately-owned property surrounding the theater and evicted the theater from the separate green room building. The theater itself was owned at the time by Paul Bear and Jeb Schoonover.

That same green room building is the same space Biggers and the Rialto’s foundation insists is vital to the theater’s future and central to the decision in June by the city council to delay Martin’s and Stiteler’s development plan.

“This is exactly what we went through with Biggers,” Bear said in an interview. “The big difference is, Biggers wants it for free and I was willing to pay him market rate for the property.”

But unlike this year, there was no cry of foul or city council drumming up a “save the theater” campaign when Biggers evicted the Rialto in 2002.

The Rialto had moved into the privately-owned spaces in 2001 after Bear and Schoonover leased the block surrounding the theater at 318 E. Congress St. As part of that lease, the two had an option to buy the block but when Biggers offered to buy it, they agreed to let that option go. Biggers was the founder of the Tucson Weekly alternative newspaper and had sold it in 2000. The Weekly is currently owned by Wick Communications, a privately-held company that also owns Inside Tucson Business. 

Bear said that after Biggers bought the Rialto block in 2002, the two of them were in negotiations to allow the theater to continue using the green room building but those negotiations came to an abrupt end. Biggers gave the Rialto a 10-day notice to vacate the green room building and all spaces not owned by the theater.

“He just had a mental breakdown in my opinion,” Bear said. “He went crazy one day and started evicting tenants. The building was probably 90 percent leased between the apartments and the storefronts and he just started evicting everyone and throwing tenants out of the building that were paying rent. It wasn’t logical. He had no plans, no permits. And the buildings have sat vacant since that day. During this whole time, they could have had that building 90-to-100 percent occupied with people paying rent. But to just throw everyone out and have the buildings sitting empty for six to seven years just seems pretty stupid.”

For his part, Biggers says the dispute with Bear was due to some major miscommunication and misrepresentations that led to a falling out between the two of them.

“It’s not something I’m proud of, but at the time it seemed like the only way to break the logjam,” Biggers said.

He also said he was being pushed to do the evictions by his partners in Congress Street Investors LLC, who had plans to renovate the buildings on the block. Those plans, though, were never developed.

Bear and Schoonover continued to own and operate the Rialto for another two years without the use of the privately-owned spaces adjacent to it.

In 2004, the Rio Nuevo Multipurpose Facilities District, which had been created in 1999 by the Legislature and city voter approval, acquired the Rialto theater from Bear and Schoonover. At that time Biggers was named executive director and the theater moved back into the spaces that were owned by the investment group in which he was a partner.

To this day Bear says the use of the privately-owned spaces could be advantageous to the Rialto for possible expansion but he doesn’t believe they are vital to the operation of the theater, as its foundation claims.

“In my opinion they’ve been practicing nothing more than political extortion,” Bear said. “Saying those spaces are needed for the viability of the theater simply isn’t true. The theater operated from the 1920s to the 1970s without that space. I bought it and used it since 1995 to 2001 without that space. It would be nice to expand, but it simply is not true that these spaces are vital.”

Bear said there numerous other options, including using a green room and dressing rooms that already existence below the Rialto’s stage.

“That is traditionally where the green room has always been and it’s approximately 2,500 square feet, the same amount of space as the back building,” Bear said. “The lot behind the stage house is another approximately 2,500 square feet on the ground and you could build up 60 to 70 feet if you wanted to. The city has taken away public use of Herbert Avenue so you could expand there.”

Bear admits there is an issue with using the green room below the stage stemming from sewer lines that are clogged.

“They spent something like $60,000 to add offices on to that adjacent building, not related to green rooms,” Bear said. “Fixing the sewer would have only cost around $6,000. Instead they spent all that money on a lot [the theater] didn’t own and to improve a space they didn’t have a lease to.”

As for the other spaces being used by the Rialto, the foundation is planning to put a full bar in the theater and build new restrooms in one of the storage areas.

Biggers has purchased a series six liquor license permit, which is scheduled to come up for city council approval on Aug. 5. There could be two issues, though, with that. One is that the theater is within 300-feet of a charter school and the other is that Martin plans to protest it, saying the liquor license involves property the Rialto doesn’t own.

 Rialto ownership timeline 1995-Present

• 1995: Paul Bear and Jeb Schoonover purchase the Rialto Theatre

• 2001: Bear and Schoonover lease the remaining property on the Rialto block with an option to purchase it. The Rialto moves into a separate building for use as a green room and office.

• 2002: Tucson Weekly founder Doug Biggers, who sold the newspaper in 2000, purchases the Rialto block not including the theater. Biggers evicts the Rialto from the green room building. 

• 2003: Congress Street Investors LLC is formed to gain investors to help renovate Rialto block and areas around downtown. The group of about 20 investors includes managing members Yoram Levy, Thomas Warne, Donald Semro and Biggers.

• 2004: Rio Nuevo Multipurpose Facilities District, which was established in 1999, purchases Rialto from Bear and Schoonover; theater moves back into separate green room building space. Rialto Theatre Foundation is formed and Biggers is named the theater’s executive director.

• 2006: Congress Street Investors sells the Rialto block to Biggers and architect Tom Powers, who at the time was president of the Rialto Theatre Foundation.

• 2007: Biggers brings in Don Martin, CEO of Competitive Engineering Inc., as an investor in the Rialto block to buy out Powers’ interest.

• 2008: Martin buys out Biggers’ interest in the Rialto block partnership.

• 2009: Rialto Theatre Foundation says green room space now owned by Martin is vital to the operation of the theater, which becomes focal point of City Council’s decision to kill a development deal for an arts and entertainment complex for the Rialto block proposed by Martin with partner and developer Scott Stiteler. In June, Martin and Stiteler ask Rialto to pay rent, including back rent, for use of green room building. On July 2, Rialto receives eviction notice.

Contact reporter Joe Pangburn at jpangburn@azbiz.com or (520) 295-4259.