Days after the Guadalupe City Council canceled the city’s Royal Theater renovation project, some remain hopeful the project will one day be completed.

Guadalupe started construction on the $12 million project in December with a $3 million funding deficit.

Despite $10.5 million in state and federal grants, the project still had a multimillion-dollar funding gap, which led the council on Tuesday to cancel the project.

The morning after the decision, several city and Santa Barbara County officials toured the site. As they stepped into the roofless building, conversations about what to do echoed in the unfinished space.

The contractor will complete the roof to protect the building from rain damage, according to Mayor Ariston Julian.

Julian said the project most likely won’t return for consideration for another two to three years. The city needs to be in a better financial situation, he said.

“We’re optimistic that something will happen,” Julian said. “It’s going to be a long shot, but we know that it’ll eventually happen.”

He said he was “very disappointed” with the termination of the project but said he felt the city had no other choice.

City Manager David Trujillo, who strongly advocated for the project’s termination because of the city’s financial woes, said it was necessary.

To continue project funding, the city would have had to lay off 15 positions, including emergency responders, to stay afloat, on top of the seven they had already eliminated to make up for the $3.6 million deficit. 

“If we would have continued (the project), the outcome would have been more negative than positive,” Trujillo said. “We would have worked the city into bankruptcy.”

The seven layoffs gave the city a three-year plan to get its budget out of a deficit, but Trujillo said the city is still looking to grow revenue by attracting “small-box” grocery stores such as Grocery Outlet and fast-food chains. The city is also optimistic about the new housing being built on the south side of Pasadera.

Trujillo estimated that if the city maintains its current practices, it’ll build up $1 million per year. He also estimated that it would take about 15 years for the city to have enough money to take on a large-scale project such as the theater.

“Hopefully, it’s something we can bounce back from,” Trujillo said, “and maybe, the community will understand.”

The city will return the unused $4.8 million federal subsidy it received from the Economic Development Administration.

However, the city had already spent roughly $2.5 million of California Arts Council funding. Ariston said they’re negotiating whether the state will forgive that money or require them to pay it back on a schedule.

Mira Beyeler Ramirez, who has been involved with the Royal Theater project since early 2020 and helped form the nonprofit Guadalupe Visual and Performing Arts Center, said she wasn’t surprised by the outcome.

However, she called it “incredibly disappointing” and “completely avoidable.” She said her frustration comes from what she described as years of unanswered questions about the project’s finances and oversight. 

“I’ve been warning everyone that I felt this was inevitably how the project was going to go if major changes weren’t made to the project manager and to a general understanding of the finances,” Beyeler Ramirez said. “This did not have to happen this way.”

She said that eventually she would like to see the building purchased by an outside group that could raise the funds to restore the project, rather than letting the theater sit unfinished for years. 

The Royal Theater’s former project manager, Tom Brandeberry, declined a Noozhawk request for comment.