In the spring, Universal sought permission from the Philadelphia Historical Commission to demolish the theater - which is on the National Register of Historic Places - except for its South Street facade.
Developing the entertainment destination that Gamble once imagined wasn't financially feasible, and maintaining the crumbling property was proving to be a financial hardship, Universal contended in the April 29 affidavit for its demolition application.
The company now wants to build market-rate housing on Kater Street behind the theater, and commercial property on South Street.
But several seemingly serious roadblocks stand between Universal and its new, less-ambitious vision, including the Historical Commission, which deemed Universal's application incomplete, said Mark McDonald, Mayor Nutter's spokesman.
It's a long, winding tale filled with dashed hopes, poor communication and millions of taxpayer dollars.
"The Royal could have served as an anchor to propel development," said Marcus Iannozzi, president of the South Street West Business Association's steering committee. "But now it's more like an anchor, weighing the block down."
The Royal Theater was built in 1919 by businessman Abraham Wax to serve the African-American community.
The 1,200-seat theater hosted every kind of entertainment imaginable, from entertainers Fats Waller and Billy Paul to amateur shows for children to movies and cartoons.
It closed in 1970, and later was purchased at a sheriff's sale for $13,700 by investor Michael Singer. He was denied permission by the Historical Commission in 1991 to demolish the vacant venue.
Singer sold the Royal to the Preservation Alliance for $350,000 in 1998; two years later, Universal Cos. scooped up the theater, two neighboring parcels on South Street and three plots on Kater Street.
Gamble was quoted in an Inquirer story in 2000 saying that the reborn Royal would be "an entertainment facility that will have the best live music you can find."
The theater, he said at the time, was going to be a key part of an "18-hour economic district" that included shopping, dining and clubbing.
"It was implied, because of who Kenny was in the music industry, that the theater was going to become an incredible place again," said Joel Spivak, a longtime community activist.
"Everyone was deceived. It's a shame," said Spivak, 73. "The theater looks worse now than it did when [Universal] first got it."
Gamble also has owned two vacant lots across the street from the theater on South Street since 1990, according to the city Office of Property Assessment's website.
"Kenny was very involved improving that neighborhood, but somehow along the way, he became the greedy landlord," Spivak said.
Universal's spokesman, Devon Allen, said in an email last week that neither Gamble nor Rahim Islam, the company's president, was available for comment.
The city shelled out $2.5 million in 2000 to redo sidewalks on the west side of South Street, but Universal declined to have the sidewalk replaced in front of the Royal because it expected that construction work soon would commence, Iannozzi said.
That stretch of sidewalk remains fractured and uneven. Jeffrey Woloszyn, whose South Street Sounds music shop is across the street from the theater, said he regularly sees passers-by trip in front of the theater.
"I don't think it's a bad reflection on Kenny, because he's done a lot of good for this city," Woloszyn said. "But the theater doesn't contribute anything to the overall community."
Iannozzi said Universal has kept the community in the dark about its intentions for the theater.
"We've been frustrated with their lack of communication. We've reached out in the past and gotten nothing but silence," Iannozzi said.
"We were taken aback when we learned about the application for partial demolition," he said. "We don't feel that they've been a good steward of the property."
Andrew Dalzell, programs coordinator for the South of South Neighborhood Association, said his organization emailed Universal last week in an attempt to start a dialogue about the Royal.
So what happened to Universal's original plans for the Royal, anyway?
The affidavit filed by the company in April described a frustrating journey that included the hiring of Vitetta, an architectural and planning firm, in 2006.
Vitetta determined that it would cost $8 million to $18 million to turn the Royal into an entertainment venue, but that the property was too small - and parking-challenged - to make money, according to the affidavit.
The following year, Universal shelled out $145,000 to repair the roof and gutter. The company also claims that it tried last year to sell the theater.
The news website PlanPhilly reported in May that developer Ori Feibush made five offers for the Royal, including a contingency-free offer of $3.1 million.
At least one of Feibush's proposals called for demolishing most of the theater while maintaining the facade, the website reported.
That month, the blog Philadelinquency reported that Juan Levy, a local resident, filed an ACT 135 complaint against Universal in Common Pleas Court that aimed to have Feibush made the theater's conservator.
Feibush, who did not return a request for comment, is reportedly footing the bill for the legal effort.
Universal, meanwhile, received a $2.25 million grant in 2011 from the state's Redevelopment Assistance Capital Program to make improvements to the Royal.
It also received a $50,000 grant in 2006 from the state Historical and Museum Commission for repairs to the outside of the theater. That grant, however, included language that prohibits Universal from performing construction or demolition work on the theater for 15 years without first contacting the commission.
Universal never mentioned the partial-demolition application to the commission, said its spokesman, Howard Pullman.
"We sent Universal a reminder that they need to consult with us," Pullman said. "They never responded."
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