The 'theatre built over the church' idea is actually pretty interesting, but I think both movies are set in their respective years, if you know what I mean (Demons 1985; The Church 1989, save for the medieval intro).

To be fair it's hard to know how the original script went, and how different it was to the rewrite; the initial script was written by Lamberto Bava and Dardano Sacchetti, but when Soavi took over the directing he and Argento rewrote the script because Soavi wanted it to be a standalone movie with no ties to the previous movies. So maybe the original script had more in common with the first two movies (maybe even a prequel, who knows?), but The Church, as it is, has nothing in common with the preceding movies (save for one mention of 'demons' by the old priest dude).