A lawsuit between developer Ira Smedra and Cinamerica Theaters L.P. was recently decided, but their feud raged on last week.

The two were openly tussling in a public relations campaign to promote their respective rival proposals for Westwood Village entertainment-retail centers.

Cinamerica, which operates the Mann Theaters chain, plans to build a retail, restaurant and 13-screen movie theater complex on a parcel bounded by Weyburn, Gayley and Broxton avenues, on the west side of the Village.

On the east side, Smedra's Arba Group is proposing to develop a similar-sized complex with shops, restaurants and a multiscreen movie theater.

The recently decided lawsuit involved a dispute over the Plaza Theater, which Mann Theaters operates under a lease agreement. The Plaza Theater site is owned by Smedra and abuts Smedra's project site.

An option clause in Mann Theaters' lease gives it first right of refusal to operate any new theater developed on the site.

Smedra's original plan called for his new project to incorporate the Plaza Theater parcel, but when Cinamerica balked, he realigned the project site to exclude the Plaza Theater. He also engaged in negotiations with various other movie theater operators.

Cinamerica claimed those moves violated the lease agreement, but an appellate judge last month upheld a lower court ruling in Smedra's favor, ruling that Mann Theaters' option agreement could be exercised only if the Arba Group plans to demolish the Plaza Theater.

It's unlikely Smedra's planned Village Center cineplex will actually coexist with the Plaza Theater when or if the controversial entertainment-retail plaza is built. Mann's lease on the Plaza Theater expires in 2001, and Smedra said he does not expect to renew it.

Rich Given, marketing director for Mann Theaters, said his employer is considering closing the Plaza, Festival or National theaters when the company builds its own new cineplex on the west side of the Village.

Meanwhile, Smedra has been in default on a Cinamerica-held mortgage since December. The mortgage, now $1.9 million in arrears, is on an apartment building that sits on Smedra's project site. Cinamerica financed Smedra's purchase of the building when the two parties were negotiating to partner on Smedra's Westwood Village cinemas. Smedra said he withheld payment on the property on advice of his lawyers until the Cinamerica lawsuit was settled, and now plans to correct the default.

Another salvo in the ongoing feud was delivered by Mann last week in the form of a press release announcing it had "withdrawn" from Smedra's Village Center project because it is "out of character for Westwood."

Charles Goldwater, president and CEO of Mann Theaters, said he issued the statement to "set the record straight," and not in response to the recent court ruling.

"There had been a lot of questions about our intentions from local merchants and homeowners," Goldwater said. He noted that his company is now "fully committed" to its own rival project on the west side of the Village.

Smedra dismissed Mann's statement, saying the parties terminated their discussions months ago. "It's another effort of Mann's to preserve their monopoly in the Village," Smedra said.

He plans to name the operator of his planned cineplex in the next few weeks. Kansas City-based American Multi-Cinema Inc. commonly known as AMC will likely be the choice, said sources close to the talks.

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