Restaurant, condos and parking lot out of Dreamland plan
New Dreamland Theatre owners discuss the future
BY PETER B. BRACE INDEPENDENT WRITER
Saying it is committed to restoring the Dreamland Theatre to its movie house glory, the Nantucket Dreamland Foundation purchased the 177-year-old theater on Oct. 3 for $9.8 million from Dreamland Theatre ZMG, LLC.

The Nantucket Dreamland Foundation - composed of Boston hedgefund manager and part owner of the Boston Celtics James Pallotta, Starwood Capital CEO Barry Sternlicht and Coatue Management Founder Philippe Laffont, all summer residents - wants to do what former owner Haim Zahavi was never able to.

"The primary purpose is to restore the Dreamland Theatre as a movie theater," said Laffont, the spokesman for the Nantucket Dreamland Foundation. "The second purpose would be to do a multipurpose space on the second floor that would benefit the shoulder and winter seasons. It would be a lovely place to do that. And the third option is to do a park in the back."

Last week's sale of the Dreamland Theater brings to a close a chapter of uncertainty in the building's history: Zahavi's purchase of the property and his unsuccessful two-and-a-half-year effort to renovate the building into a multiple-use facility showing films, serving as a performing arts center, providing space for condominiums and creating a new restaurant. As buyers, the new foundation said it is decidedly benevolent and dedicated to building what Nantucket needs out of the broken down old building.

"This is a sentimental, good project for the town," said Laffont, who recalled seeing the first Star Wars movie, "Star Wars: A New Hope," at the Dreamland when he was nine years old after coming to Nantucket for the first time in 1977. "It's something that should have been done a long time ago and we hope to work with everyone and I think this could be a really nice space for a long time."

Reaction to the Nantucket Dreamland Foundation's purchase of the theater is positive all around.

"I think these are people who stepped up for all the right reasons, who understand what it is going to take to save the theater and who have the resources and desire to make it happen," said Selectman Michael Kopko. "What these guys are doing is trying to help the community; sort of reclaim the Dreamland. I think this is the best thing we could have hoped for."

But not even the highest hopes will bring the Dreamland back to life in time for next summer, as Laffont admitted the building is in dire need of extensive work from the inside out.

"There will be no parking lot, no luxury condominiums and no restaurant," said Laffont. "We have no interest whatsoever in developing the space on a commercial basis."

THE FORCE IS WITH THEM

Putting the deal together between Zahavi and the Nantucket Dreamland Foundation was Peter Palandjian, the chairman and CEO of the Brighton, Mass. development firm Intercontinental Developers. Palandjian, according to Laffont, wishes to remain behind the scenes, helping where he can.

Laffont said that although the Nantucket Dreamland Foundation is a small unit right now, he is working to bring in other investors to help with the rehabilitation of the theater building.

"There are three people involved, but we very much intend to make it a larger group," Laffont confirmed. "The basic idea is to run the theater as a nonprofit group, and we've found that it would make no sense to run it as a commercial operation.

"It's one of the oldest movie theaters in the U.S. We just look at this as a really beautiful theater. It's an incredible part of the summer to see these blockbuster movies and it would be really great for the kids and we hope we can find other people to help us move this in a speedy way."

To date, Palandjian is the only such helper, although Rose & Crown and Foood for Here and There owner Rick Ulmer, who tried unsuccessfully to buy the Dreamland this summer, did help connect Laffont with potential investors and may play some unspecified role in the future. However, contrary to reports that Ulmer is president of the Nantucket Dreamland Foundation (including one in the online real estate news journal, GlobeSt.com), Laffont said that Ulmer was not involved in the purchase.

If the Nantucket Dreamland Foundation does follow through with its plan to renovate the first floor and build some sort of multi-use space out of the second and, possibly, third floors, those who originally offered to buy the Dreamland at the same time as Zahavi (and for the same amount of money) would be extremely happy.

"When we were putting together our proposal for the Dreamland in 2004, their names [Barry Sternlicht and James Pallotta] were on the list of people to contact, and I'm pleased to see their names there again and I'm hoping the building can be redeveloped and used by the community in its entirety if possible," said former Sustainable Nantucket Executive Director Christine Silverstein. "I'm delighted to hear that that's a possibility. Nothing would make me happier."

NOT THE LAST PICTURE SHOW

Zahavi followed his $6 million purchase of the Dreamland from the Anastos, Flanagan, Gray and Ruben families on March 14, 2005 with a proposal to renovate the building to include four luxury condominiums on the third floor, a performing arts space on the second, a café on the mezzanine level and a restaurant in the back parking lot over underground parking. Securing all Historic District Commission, Planning Board and Conservation Commission permits, Zahavi ran afoul of the Planning Board's Major Commercial Development special permit by not opening the theater during the 2006 season per Addendum A, Condition 6.2(a), that stated he must work on the building during the off-season, but reopen it each year for movies by June 15.

His breach of this condition stemmed from Building Inspector Bernie Bartlett's April 14, 2006 stopwork order, issued because Zahavi's work within the building that winter went beyond the scope of his exploratory demolition permit. His inability to provide enough information to the Building Department dogged Zahavi for more than a year as he tried to meet standard building material and engineering plan filing requirements for the issuance of a building permit.

Apparently frustrated by his failure to get the necessary building permits, Zahavi put the Dreamland property on the market in late spring.

Hoping to be the one, with several investors, to rescue and restore the Dreamland, Ulmer made a bid for the theater in mid-June. In addition to bringing the movie aspect of the Dreamland back to life, Ulmer planned to build a stage on the second floor for performing arts uses and a restaurant with views of the Easy Street basin on the third floor. He also hoped to sell the parking lot to the Nantucket Islands Land Bank for fair market value to be used as an in-town park.

Running parallel to Ulmer's purchase deal was a signature-gathering campaign led by Kopko and Nantucket Film Festival Founder Jonathan Burkhart to petition the selectmen to get voter approval for the town's taking of the property by eminent domain. Although more than 350 signatures were collected - 200 is the minimum - Article 1 at the July 26 Special Town Meeting failed to garner the two-thirds vote needed for adoption. A hand-count vote yielded 255 in favor and 182 against; but for the two-thirds vote, 292 positive votes were needed.

Just one week prior, Ulmer, after getting a oneweek extension from Zahavi, called it quits, citing prohibitively high purchasing costs and not enough investors.

BRINGING IT BACK

Zahavi left the theater building in a challenging condition, its ground floor ripped up and concession stand demolished in preparation for his intended replacement of the foundation and construction of a new concession stand. He had been on the verge, so Zahavi felt, of securing a building permit to begin work in earnest on the structure last spring when he decided to call it quits.

Laffont said the Foundation is in the process of hiring an architect and planning island meetings to seek community input.

"The building is an old historical building and it requires significant work," said Laffont. "It basically needs to be completely rebuilt from the inside out where you have to redo the foundation, so it will not be open for 2008. A lot of it will depend on the scope of work and our ability to work with the town. We kind of bought it in a speedy way and we would like to move on it as fast as possible."

Representatives of the Dreamland Foundation plan to meet with the Planning Board, HDC, ConCom and Building Inspector to plumb their thoughts on the most expeditious method of securing the necessary permits. Laffont said that although he, Sternlicht and Pallotta have not studied this issue in detail, his gut feeling is that because the foundation's project is so different from Zahavi's, it will be much more efficient to start from scratch and file their own permit applications.

For the second and third floors, Laffont hinted that the foundation would like to incorporate the third floor, which he described as a cramped space, into whatever design is used for the second floor.

Whatever this group does to the Dreamland is going to cost them. When Ulmer announced his intentions in June, real estate agent Flint Ranney who was part of the group of islanders that led the special Town Meeting effort, said it could cost around $8 million to renovate the building enough to open the theater. Laffont hesitates to put a number on the proposed renovation.

"The number depends on the scope," he said. "Our primary focus is the movie theater. But we would like to listen to the community for the other floor or floors. Let's hear what people want (and also how much they

are willing to contribute....)." I