The Prebys Foundation has agreed to buy the long-vacant California Theatre property in downtown San Diego for $6.3 million, with escrow expected to close on July 31, 2026, ending years of failed redevelopment attempts and legal wrangling over the crumbling landmark across from City Hall.
Mayor Todd Gloria announced the deal in a social media post, writing that the Prebys Foundation is “taking action to address a major Downtown eyesore” and that the redevelopment will complement changes coming to the Civic Concourse, according to the mayor's post on X. The theatre, which Gloria's post describes as long-shuttered, has sat empty for more than three decades and has become one of the most visible symbols of downtown blight in the city's civic core.
Speaking of the Prebys Foundation, they are taking action to address a major Downtown eyesore. In June they acquired the long-shuttered California Theater and plan a redevelopment project to compliment changes coming to the Civic Concourse. https://t.co/GHeF0ubqXZ
— Todd Gloria (@ToddGloria) August 24, 2026
The purchase price marks a dramatic reversal in the property's fortunes. Australian developer Caydon Property Group bought the site for $21.1 million in late 2019 and won City Council approval for a 41-story hotel and condominium tower called Theatre House, but the company went insolvent and entered receivership in July 2022, according to reporting cited by Times of San Diego. That collapse left the theatre in limbo until the San Diego City Attorney's Office sued Caydon in April 2023 to have the condemned building declared a public nuisance, a case that ended in a settlement requiring the owner to sell or demolish the structure by the end of 2026.
A 1927 Movie Palace Reduced to a Legal Battleground
Before it became a legal and financial liability, the California Theatre was celebrated as the “Cathedral of the Motion Picture.” Designed by architect John Paxton Perrine in Spanish Colonial Revival style, the 2,200-seat venue opened on April 22, 1927, with gold-leaf ceilings and a Wurlitzer organ, according to Cinema Treasures. It hosted its final live show on June 20, 1990, and permanently halted operations that year after an architectural survey found the structure highly vulnerable to earthquake damage, per the same Times of San Diego report.
The building has stood as a highly visible challenge in downtown San Diego for years, and no final development plans for the site have been announced. The foundation says it will need to complete engineering, permitting, and regulatory processes before any demolition can begin, and that it plans to prepare the site for demolition once escrow closes. Kevin Nolen and Jason Kimmel represented the seller in the transaction, while Matt Carlson advised the Prebys Foundation.
Foundation Frames Purchase as Long-Term Civic Investment
Carlson said the foundation has stepped forward to take on one of downtown's most visible and challenging sites, adding that the investment sets a benchmark for committed local capital in San Diego. Grant Oliphant, who leads the foundation, said the acquisition can create space for new ideas, investment, and opportunities that strengthen San Diego's civic core, and that foundations are positioned to make patient, long-term investments that create lasting public value for generations.
Established after the 2016 death of real estate developer Conrad Prebys, the Prebys Foundation holds more than $1.1 billion in assets and awarded over $53 million across 333 local grants in 2024, according to Axios. The foundation describes itself as the largest independent private foundation in San Diego County, investing in arts and culture, medical research, health and well-being, and youth success through grants, partnerships, impact investments, and strategic real estate. It says the California Theatre acquisition will not affect its existing grantmaking budget or philanthropic commitments, and that it intends to work with community, public, and market partners to explore the property's highest and best long-term use.
Golden Hall Redevelopment Adds to Civic Center Overhaul
The theatre purchase lands alongside a separate but related push to reimagine the aging Golden Hall a few blocks away. In May 2026, Gloria and San Diego Community College District Chancellor Gregory Smith signed a Memorandum of Understanding to study converting the 62-year-old Golden Hall into an educational and cultural campus, according to KPBS. The proposal calls for converting 20,000 square feet of the 50,000-square-foot facility into gallery space showcasing rotating exhibits from San Diego Mesa College's World Art Collection and housing its Museum Studies program, per the San Diego Community College District.
Golden Hall served as a 1,400-bed temporary city homeless shelter from 2019 until it was vacated and closed by municipal officials in late 2024, a shift Hoodline previously reported strained shelter capacity as homelessness among women and children rose across San Diego. City officials now describe Golden Hall as an underused civic asset, and its potential transformation into a cultural campus is being framed as part of the same broader vision for the Civic Center district that the theatre purchase supports.
Bigger Questions Loom Over Financing and Governance
The theatre deal fits into a larger, still-forming plan for downtown's civic core. In August 2026, Voice of San Diego reported that the Prebys Foundation and the Downtown San Diego Partnership had proposed creating a Joint Powers Authority with local school and college districts to issue bonds and manage land transactions across the entire Civic Center zone, according to Voice of San Diego. That governance model has already drawn skepticism from at least one school trustee, and how it would be financed remains unresolved.
The foundation envisions a civic center district that becomes a center for arts, culture, housing, education, and civic life, and says it hopes to create new possibilities for housing, economic opportunity, and community life around the theatre site. Gloria has described the effort, launched with the San Diego Community College District and the Prebys Foundation, as an attempt to reimagine downtown as a place that connects neighborhoods and serves as a welcoming civic destination. For now, the immediate next steps are procedural: closing escrow by the end of July, then moving through the engineering and permitting work the foundation says must happen before any demolition of the theatre can proceed.
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