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How the Clay dodged a bullet

By Thomas Reynolds

Discussions between Clay Theater owner Balgobind Jaiswal and the San Francisco Film Society began last December after Landmark Theatres decided it could no longer afford to continue to operate the venerable theater, which has been showing films on Fillmore Street for 100 years.

The lease had actually expired two years earlier.

“The Clay has been in trouble financially for several years,” said Ted Mundorff, CEO of Landmark. “So we’ve been working on what we could do to prolong the probable demise of any single-screen theater.”

In January there were further discussions between the Film Society and the owner.

“The best use was the Film Society,” Mundorff said. “We thought it was a really good fit.” The Film Society sponsors the San Francisco International Film Festival — the nation’s oldest — and programs a screen year-round at the Sundance Kabuki Cinemas in Japantown. The society also sponsors a wide-ranging program of other film-related events throughout the year from its headquarters in the Presidio.

Both the owner and the Film Society found their negotiations frustrating.

“After three months, I could not accomplish anything,” said Jaiswal. “So I hired lawyers and spent thousands of dollars and they could not help me. So I took over again. Back and forth, back and forth. It was exhausting. I’ve been in business for 30 years and I’ve never seen anything like this.”

“We don’t know what he wants,” countered Leggat, head of the Film Society. “It’s like trying to hit a target in the dark.”

Landmark agreed to keep the theater operating while the landlord and the Film Society negotiated, hoping there would be a seamless transition.

“But that didn’t work out,” Mundorff said. “It didn’t seem to be going anywhere. We were at the end of our rope. All I could do was bring them to the altar — I couldn’t make them marry.”

So on August 10 Mundorff made the call he had hoped to avoid. He told Clay Theater manager Chris Hatfield to prepare to shut down the theater at the end of the month. The staff posted a notice in the box office window announcing that Sunday, August 29, would be the Clay’s final day, and word — and shock and dismay — began to spread through the neighborhood and the city’s film community.

At that point, Leggat and supporters of the Film Society decided to go public with their attempt to get the owner of the Clay to rent or sell them the theater. Leggat said the society offered to match the rent Landmark was paying — even though he said the theater does not comply with disability requirements and needs at least $200,000 in improvements.

“We’re willing to refurbish and re-energize the Clay,” he said in mid-August. “We care deeply about the soil in which we’re planted.”

As the Clay’s final weekend approached, Mundorff flew up from Landmark’s Los Angeles headquarters. A San Francisco native who grew up in the Sunset — and whose parents enjoyed seeing movies at the Clay — he found the final days difficult. He was at the Clay when the last show let out on Thursday, and employees and former employees were stopping by to say goodbye to the theater.

“It was a very, very emotional time for everyone in the organization,” he said. “We don’t like losing one of our children.” He added: “I would feel this way in any other city, but probably not as much. San Francisco is dear to me.”

The next day, on Friday, August 27, he was in contact with the landlord.

“I was hopeful during Friday’s discussions that we could make something happen,” Mundorff said. An agreement was finally struck in the early hours Saturday morning to keep the Clay operating.

“It was terrific,” he said. “We were ecstatic about continuing to operate the theater and our landlord was happy, too.” He called the Clay Saturday afternoon and told the staff there was a reprieve. “I felt a little like the governor picking up the phone to call San Quentin,” he recalled.

“We were already in the process of making plans to leave” when the call came from Mundorff, said Hatfield. “We were told to stop — that we would be sticking around for a while.”

As it happened, the Clay was scheduled to host a final midnight showing of “The Rocky Horror Picture Show” on Saturday night. As Rocky Horror fans lined up in costume for one final showing and sing-along, Hatfield and fellow manager Michael Blythe decided they would announce the good news to the sold-out audience before the film began.

“There couldn’t have been a better time,” said Hatfield. “We broke the news on stage right then and there. If the theater were any older, it might have shook apart.”

“When we made the announcement, the crowd went nuts,” said Blythe. “It was a blast. It went from a funeral to a celebration real quick.”

Mundorff credits Jaiswal with making it possible to keep the theater operating.

“Both of us were motivated to keep the theater open,” he said. “But the landlord made it happen. Without him, this wouldn’t have happened.” He added: “It was a great victory for all of us who love movies.”

Said Jaiswal: “They cannot afford to stay here. I told them, ‘I’ll give you free rent, just pay my property taxes and charges.’ It was not easy for me to let Landmark occupy the theater rent free. In the interest of all the merchants and the neighbors, I felt this was the best option.”

“No, not for free,” Mundorff said when asked about the rent. “But he’s been very, very kind.”

“This is obviously not a permanent solution, but it buys us time to find a permanent solution,” Jaiswal said. Either party has the option of ending the agreement with 30 days’ notice.

“I’m going as long as we can,” said Mundorff.

“It is going to be indefinite until I find a solution,” said Jaiswal.

By midday Sunday, still suffering from the after-effects of Saturday night’s celebration, Blythe was struggling to figure out how to announce the news on the theater’s marquee in the limited space and dwindling number of letters available. By the time the 2:30 matinee of “The Concert” began, there was a short but sweet message on the marquee: “The show goes on!”