April 8, 2010 --AMC Entertainment Inc.’s plan to close the Broadway 4 movie theater and prevent future cinemas from opening there might not be as simple as it led City officials to believe in the fall. An executive of the building’s ownership said AMC has never run its plan by the company, and the owner wants the space to remain a movie theater.

“We certainly find that very disturbing,” said Scott Blake, asset manager at Promenade Gateway LLP, when asked about AMC’s plan. “We’d like to talk to them about that. We think that that’s not an honorable course of action.”

The City wants AMC to close the theater prior to opening a new one where the parking structure at Fourth Street and Arizona Avenue currently exists. The closure would keep down the number of total theater seats in the downtown, addressing parking and traffic concerns.

AMC told the City in a letter submitted last fall that it had a plan and a back-up idea to close the theater. The first concept was to reach an agreement with Promenade Gateway to terminate the lease and preclude future theater operators from renting the space.

The second option was to close the theater for one year, which by City law would void the conditional use permit (CUP) allowing the theater to operate. Promenade Gateway would then have to seek a new CUP if it wanted to keep the space a theater, and the City could reject that.

Although this letter was placed on the City’s website in November, Blake said he had not seen it until Monday after The Lookout e-mailed a copy. He said since seeing the letter, he has hired an attorney to review the lease.

On Monday, John Warfel of Metropolitan Pacific Capital, which is teaming with AMC on the new theater project, told The Lookout “AMC has certain rights under the lease” that allow it to close the theater and prevent future cinemas from locating there.

See article of April 6, 2010 Movie Theater Proposal Set for Initial Public Review

Blake said he did not know what Warfel was talking about. “It would be interesting to hear because I have read the lease in the past,” Blake said. “I think that that action may be problematic for them.”
Warfel and AMC did not return calls for comment.

Blake said talks about lease termination took place briefly in the fall only a few months after AMC had exercised an option to renew the lease through 2014. Those “discussions did not go anywhere,” Blake said, and AMC eventually called them off.

“It’s not real clear to me why they did withdraw (from the discussions),” Blake said. “Our perspective on it is they just exercised a five-year option to extend that lease. We’re quite happy to have them in that space. We’d love them to stay there as long as they want.”

Blake said the company wants the space to remain a theater because it is “not conducive to retail.” This is due to the floor layout, which includes an underground portion. He said Promenade Gateway has been contacted by several “more high-end oriented operators” wanting to open a theater at the location.

Last fall, AMC and several City officials at a council meeting where the parking structure conversion theater was discussed, said the Broadway 4 space was not a good place for a movie theater because it was too small and difficult to make profitable.

Blake said he could not comment on that because he is a building owner and not a theater operator, but he believes the cinema concept could work if a tenant made a capital investment to improve the location.

A community meeting is scheduled for 7 p.m. on Monday at Ken Edwards Center to present the initial proposal for the new movie theater at Fourth Street and Arizona Avenue.

"AMC has certain rights under the lease" that allow it to close the theater and prevent future cinemas from locating there.
            John Warfel