Woodland leaders announced a plan Friday they hope will save a historic Main Street movie house and energize the city's struggling downtown.

The proposal calls for the State Theatre, which opened in 1937 and closed last year, to be turned into a performing arts venue run by the Woodland Opera House and renovated to its Depression-era glory.

The State sits next to a vacant lot, its battered and flattened exterior providing little clue to its former grandeur.

The $2 million project would restore the theater's towering neon marquee, which was removed to accommodate truck traffic, and reveal the sweeping art deco lines now covered by flat blue panels, officials said.

At the same time, movie theater developer Cinema West is moving forward with plans to build a modern multiplex four blocks away on Main Street, on land owned by developer Paul Petrovich and now occupied by a car dealership.

Cinema West owner Dave Corkill said Friday he had given up his option to buy the State so that the city could purchase it from Bay Area owner Richard Mann. Mann's family built movie theaters from Santa Rosa to the Oregon border in the 1930s, he said.

City Manager Mark Deven said the city intends to purchase the theater from Mann for a price still to be determined. The project could be completed as soon as the fall 2012, he said.

The two projects would anchor the east and west ends of Woodland's historic downtown and, it's hoped, bring it to life, officials said.

Main Street, with its vacant storefronts and shuttered restaurants, fails to draw the visitors needed for a vibrant street scene.

"Having two very nice ends to Main Street will make a wonderful difference and create a more inviting place for downtown to be revitalized," said Councilman Bill Marble, who spoke at a news conference Friday announcing the plan.

The announcement came after months of political maneuvering by developers, city officials and preservationists over how to save the State and whether to build a new multiscreen movie theater.

The city's redevelopment agency, composed of City Council members, gave the proposal preliminary support and will vote on funding it Tuesday.

The project was fast-tracked earlier this year as the city, like many others, scrambled to spend redevelopment funds threatened by state budget cutting.

The tale of the State is similar to the stories of other aging downtown movie theaters across the region. Some have been renovated as cinemas or live-performance spaces. Others were demolished.

Martie Dote, Woodland councilwoman and redevelopment agency member, said she had grown up in Sacramento and was "devastated when they tore down the Alhambra Theatre." The site of the once-palatial cinema on Alhambra Boulevard is now occupied by a Safeway store.

Dote said she hoped the State would see new use as a venue for live theater, including the work of local playwrights.

Woodland Opera House director Jeff Kean said he envisions the State's main cinema being turned into a theater with flexible seating and stage configurations. Two smaller movie theaters would become dance studios, and live music and films would round out the calendar, he said.

The renovated State would allow more offerings in children's theater and dance, Kean said.

Voters indicated their interest in expanding children's programs at the Opera House when they passed a half-cent sales tax and advisory measure in 2006, Deven said.

David Wilkinson, a local preservationist and member of the Friends of the State group, said the proposal announced Friday satisfied the goals of all involved and would allow the theater to "reclaim its mantle" as one of the city's architectural assets.

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