The owners of a movie theater near Madison Square Mall are not happy about the City of Huntsville's plans to acquire land at the University Drive site.

Karishma Dattani, who bought TouchStar Cinemas with her husband, Bimal, in 2008, said they are upset the city has proposed buying their land and building a road through the middle of it as part of a new proposal to revitalize the property as a mixed-use project with RCP Companies developer Mid-City Owner, LLC.

TouchStar Cinemas recently invested $3 million on renovations at Madison Square 12, which employs more than 30 staff and will double its workforce after completing its kitchen remodel to offer more dining options to customers. The theater currently serves about 30,000 customers each month.

"We're all for the redevelopment and improvements of the area and everything they're planning with MidCity Huntsville, but we're already a step ahead," she said. " ... I just don't understand why the city would want to rip our theater down and run a road right through it."

Dattani, who received a letter saying the city will soon begin the appraisal process and make an offer on the property, said she has spoken with Huntsville's Director of Urban Development Shane Davis about the matter. She is still in disagreement with the city's plans in relation to the site.

The city wants to acquire land for new roads, regional stormwater upgrades and retention infrastructure, and public open space in and surrounding the site, which is also home to owners Sears and JCPenney. Sears spokesman Howard Riefs said they intend to protect their property rights "vigorously."

"Sears has been a proud member of the Huntsville community for more than 30 years and we look forward to continuing to serve our members and customers," he said in a written statement.

Davis told AL.com in May the city is working with JCPenney to find another site within the market and has identified 3-4 possible locations. A spokesperson for JCPenney Corporate Communications would not confirm Davis' account, instead saying they do not comment on real estate activities.

Mid-City Owner must develop a minimum of 150,000 square feet of commercial and office space, 350,000 square feet of retail, a hotel with at least 100 rooms and 560 multi-family units at the property. A clause in the agreement said 70 percent of the businesses must be new to the Huntsville market.

The developer will come back to the city this summer with a plan, which must be approved by the council before it can move forward.

Dattani said they are frustrated the city let the theater move forward with a multi-million dollar facelift last year knowing the property could possibly be acquired or redeveloped. She is also concerned the removal of Madison Square 12 would give Monaco at Bridge Street Town Centre a monopoly in Huntsville.

"Right now, we've given Monaco a good amount of competition with our renovations and I think they're starting to do a renovation of their own later this year as a result of our renovations," she said. "So, taking our theater out, how is that going to help the community? Monaco's prices are pretty high and they might even go higher once they do their renovations, whereas our prices are more reasonable."

The city's plans are part of a newly-adopted urban renewal agreement to transform Cummings Research Park East into an economically viable, attractive and functional part of the community. CRP East, the original and oldest section of the park, has struggled in recent years as vacancies rise and companies move out due to deteriorating conditions.

The plan identifies four priority zones, the first of which is the Madison Square Mall site. The area at University Drive and Old Monrovia Road has been in decline as businesses desert the mall, property values drop and crime goes up.

Davis, who presented the redevelopment agreement with Mid-City Owner last week at the Huntsville City Council meeting, said it is still too early to comment on how the acquisition process at Madison Square will go.

He said it has been the city's goal all along to "work with landowners to find alternate locations for them to remain in the market."

"We continue to work with ownership of all properties in regards to the urban renewal plan," he told AL.com. "The city will continue with appraisals and communication with landowners to assist with hopefully a workable solution for those businesses to remain in the Huntsville market."

Mid-City Owner is expected to start construction on the project by early 2017, with final phases finishing in 2022. The city must complete its public improvements within a timeline that coincides with the developer's schedule for each phase of the project.

Moving forward, Dattani said they are working with Helmsing Leach Herlong Newman & Rouse attorney Casey Pipes to defend their business against unnecessary demolition.

"We will do everything in our power to fight the city vigorously to keep our property and remain open and serve the community in Huntsville," she said.

Updated June 2, 2016, with details from Shane Davis and TouchStar's attorney.