CAPE MAY — Attempts to save the city’s last remaining movie house ended Monday as demolition of the Beach Theatre began.

“They brought a big (excavator) rig in this morning. I didn’t think it would start right away, but then I felt the house shake a little bit,” said Terry Shields, who lives next to the theater.

After starting in the early afternoon, a big chunk of the cider-block theater, which opened in 1950, was gone by the time workers called it a day shortly before 6 p.m.

“I’m not sure it will be there at the end of the week,” Shields said.

Shields, who had gone to movies at the theater since the 1950s, said he felt a bit nostalgic about losing the theater but at the same time he was glad to see progress. The theater had been closed, and at one point Shields said vagrants were living in it.

“It was something that had to be done. It was never going to be profitable. I’m at least glad to see progress,” Shields said.

City Construction Official William Callahan issued the demolition permit Monday morning. Theater owner Frank Investments had sued the city over the demolition issue, but the suit was settled in May with the city agreeing to allow the building to come down if the work was done between Labor Day and Dec. 31, so as not to interfere with the tourist season.

Company President Bruce Frank could not be reached for comment Monday, but he has said the movie theater was no longer profitable and that the company plans to look into the idea of putting up a boutique hotel that could complement the $10.5 million convention center the city is building across the street.

Frank Investments already has city approvals to construct condominiums. The market for oceanfront condominiums has declined since those approvals were issued.

Mayor Ed Mahaney said the demolition is only of the movie theater part of the complex, a beachfront block that also includes retail stores and restaurants. Frank Investments plans renovations on other parts of the complex.

“The Franks have approval for condominiums above the existing retail and the section being demolished is approved for parking and condos. I don’t know if they will follow through on that,” Mahaney said.

Shields said if any new applications come before the Cape May Planning Board, he intends to attend those meetings. Shields went to a number of Cape May Zoning Board meetings when the demolition issue was being discussed but he never got to speak, as the matter went to court before the public got a chance to comment. A couple weeks ago he got a demolition notice in the mail.

Even after the city settled its court case, litigation continued as a group called the Beach Theatre Foundation attempted to stop the demolition. Superior Court Judge Valerie Armstrong in July ruled the Beach Theatre Foundation could not intervene in the case. Callahan was instructed to issue a demolition permit if Frank Investments applied for one.

The Cape May Historic Preservation Commission in 2010 voted against demolition. The Zoning Board was hearing an appeal of that denial, cut short by the settlement, which featured testimony from both sides on whether the building was historic. Mahaney noted that state and federal agencies that oversee historic buildings had never designated it as historic. He also said the condition of the building was a concern.

“It was very apparent to City Council and relevant city department heads that the theater was in extremely poor condition and was beyond the restoration stage,” Mahaney said.

There are still some pending issues. The Beach Theatre Foundation borrowed $100,000 from the city to try and save the building, at one point leasing it and showing movies, and Mahaney said the city wants to be paid back. He said the foundation has proposed “a payment process” to repay the loan.

“The City Council expects and will pursue total payment,” Mahaney said.

There is also still pending litigation between Frank Investments and the foundation from when they had a lease agreement.

Contact Richard Degener:

609-463-6711