Watts Group Sues LAUSD.

NONPROFIT SEEKS $300,000 AFTER DISTRICT BAILS PROJECT

As plans progress to build a combined first-run cinema and entertainment industry training facility in Watts, the Los Angeles Unified School District is being sued over its involvement in the early days of the project.

The lawsuit seeks the return of $300,000 that Watts Cinema and Education Center Inc. claims to have spent on architectural plans and other pre-development expenses for the project, which LAUSD backed out of last year.

The two were partners in an effort to turn the auditorium of Markham Middle School in Watts into what would function at night as the area's only movie theater and during the day as a film-production training center.

Watts Cinema -- which has gotten $1.3 million in funding from the city and corporate sponsors like PepsiCo. Inc. and the Walt Disney Co. -- has since moved ahead with plans to build a $15-million movie theater and training center in Watts' Cultural Crescent, a redevelopment project area.

"Since LAUSD made the decision that it didn't want to support this project, and because we spent that money in good faith and in reliance on their cooperation as a partner, they should reimburse us for the money that we spent because it's useless to us now," said Susan Azad, a partner at Latham & Watkins who represents Watts Cinema.

LAUSD general counsel Harold Kwalwasser said last week that he could not comment on the case because he had not yet reviewed the lawsuit.

Azad said that Watts Cinema had hoped to avoid filing a suit but had no choice. A claim filed with the district in October was denied and the period in which Watts Cinema could take legal action was about to end, she said.

"We've tried to see if we can negotiate," Azad said. "We still want to work it out with LAUSD if we can."

Kwalwasser said that Watts Cinema representatives made no attempts to meet with him before filing the suit.

But Azad claims LAUSD officials canceled a meeting with Watts Cinema representatives scheduled days before the lawsuit was filed.

Watts Cinema formed a partnership with the district and the L.A. Community Redevelopment Agency in November 1998 to turn the Markham auditorium into a one-screen movie theater, which was to serve as a training center for locals by day and as a cinema at night. The project had an estimated cost of $3 million.

But the district canceled Watts Cinema's 15-year lease at Markham in May 2000, accusing the non-profit of breach of contract. LAUSD officials said the non-profit missed its construction deadline and failed to submit educational and safety plans for the facility.

Soon after LAUSD pulled out of the project, the city offered Watts Cinema a 1.7-acre parcel of land on which to build the project, on the corner of 103rd Street and Graham Avenue. With the added space, the project design was expanded into a two-story facility with a two-screen movie theater on the second floor and a state-of-the-art film production training center on the first floor.

Watts Cinema Director Barbara Stanton said she wants to bring quality entertainment to her neighborhood, which has not had its own movie theater in nearly 40 years.

"I was the one that grew up in Watts and had to catch a bus to go see a movie," Stanton said. "It's not a very good feeling to have to travel so far just to see a film."

In its latest incarnation, the Watts Cinema project includes a teleconferencing center, production suite and an editing bay.

The certificated training program would take in about 100 students a. year and focus on people ages 16 to 30. Entertainment-industry professionals from Disney, Paramount Pictures and other companies are helping with everything from design to curriculum development.