I have great memories in the downtown Border's Books, reading through the stacks in the ornate former theater. Sadly, it's now a Blue Bottle cafe (not bad) and a coworking space (horrible) with corporate offices upstairs (sigh).
The permit for that building required that it be possible to turn it back into a live/film theatre. A friend of mine and I looked into turning it into a nightclub but in the end it was too much of a hassle (and Palo Alto is no longer the kind of place that has nightclubs and porno theatres (not the New Varsity!) downtown).