The Desert Sun reported that had the purchase gone through a deal was to be proposed for the Palm Springs International Film Festival, which Harold Matzner chairs, to lease the theater for $1, and for the City to pay $200,000 towards renovations as well as cover half of the ongoing utility bills.
Discussion of the value of the theater, which varies from less than a dollar to over $1.5m can be see in the City's report and associated documents of the Oversight Board for the Successor Agency to the Palm Springs Community Redevelopment Agency, which argues that although the property is in a prime location the renovation costs of the theater may well be much more than it could ever attain on the open market and, as a result of a valuation by a single local valuation firm selected by the City, the value of the property is $1 or less.
It is worth noting that Cllr. Ginny Foat, to whose campaign for Mayor Harold Matzner has so far donated $67,000, is not only a member of the City Council which would make a decision on such a deal but also the appointed Council member on the Oversight Board, (OB) considering selling the Plaza Theater to the City for $1.
The OB report states that the building is in need of repair and cannot be sold for demolition and redevelopment due to its historic significance, neither of which I doubt. However the federal investigation into the City's property deals currently in progress is examining deals very much like this and has been reported to have included a valuation company. Rather than relying on questionable valuations by local firms of "awkward" properties such as the theater, another way to determine market value is simply to offer it for sale, with all the caveats that relate to it: historic significance, can't be demolished, needs repair etc. etc. and then see whether the market is interested. If not one can be sure that a $1 valuation is actually warranted. However, that's not the approach the City chose to take.
Given Mr. Matzner's financial backing of sitting Council members Ginny Foat, Paul Lewin and in the past, Mayor Steve Pougnet, one might think that all three would have to recuse themselves from such a decision, and that for the same reason Cllr. Foat would have to recuse herself from the decision when considered by the OB, but according the City Clerk that is NOT the case. The Political Reform Act states that contributions to political campaigns are not considered personal benefits and thus do not preclude politicians standing for re-election from making decisions which might benefit their donors.