The Lake Theater & Cafe opened on March 23rd, 1940, on Pacific Highway just blocks away from the Oswego city center. The building was designed by Richard Sundeleaf and realtors Murphy & Dean Company. Murphy & Dean Co. and Sundeleaf were both active participants in the development of Lake Oswego, formerly just “Oswego”. Standing 140 feet long and 80 ft wide, the building was projected to cost $50,000 and was home to five companies along with the theater. Those five companies included a florist, an ice cream shop, a restaurant, a dry cleaner, and a beauty bar. The total investment was estimated to be around $100,000 for everything, including the land, the building, and the equipment. What makes the Lake Theater so unique is its dock along the Lakewood Bay, where residents can ride their boats straight to the theater to catch a film, or perhaps attend the garden terrace restaurant for a summer dinner. Sundeleaf was inspired by French-Norman architectural style. To accommodate the varying storefronts, the building was constructed in irregular shapes, standing a story and a half tall, and constructed with a mix of brick and concrete.
The theater underwent many changes from weathering and accidents. On February 24th, 1950, the theater attic caught fire from spontaneous combustion and again caught fire on June 7th, 1958, due to a motor issue with the stage curtain, experiencing approximately $8,000 of damage. The theater had a singular auditorium with 550 capacity, until the 80s when a rain storm caved the ceilings in, then splitting the one auditorium into two.