There’s something strange going on in Downtown Santa Monica.
City Hall is eager to push full speed ahead on a new movie complex to replace an aging, 339-space parking structure at 1320 Fourth St. because they think that state-of-the-art cinemas will entice movie-goers back to Downtown.
Two partnerships are bidding on the project: Metropolitan Pacific (whose point man is John Warfel, former Bayside District Corporation Board Chair and Downtown insider) in partnership with AMC Theaters and Robertson Properties in partnership with ArcLight Cinemas, a sister company of Pacific Theaters. The bidders propose 12 screens with 2,167 seats and 13 screens with 2,000 seats, respectively.
City Council requested the project not add large numbers of additional theater seats to the current 5,500-plus seats in the Bayside area as to not overtax current traffic and parking facilities. This can only be accomplished by shuttering existing auditoriums and/or reducing their number of seats.
At the Sept. 8 council meeting, Housing and Economic Development staff asked council’s permission to engage in exclusive negotiations with AMC because, as their staff report noted, ”… AMC currently operates two other cinema sites in the district and they propose to close the Loews/AMC Broadway fourplex and remodel its AMC 7-plex with reduced seating capacity. With the loss of 1,049 seats from the closure of the Loews/AMC Broadway and the reduction in seats (548) from remodeling the AMC 7, the net gain in seats is projected to be 570, an increase of approximately 10 percent over the total number of existing seats in the district.”
However, AMC doesn’t own the Loews/AMC Broadway fourplex and recently signed a five-year lease plus three, five-year renewal options with its landlord Promenade Gateway, LP based in Beverly Hills. Christina Sternberg, AMC Sr. vice president, Domestic Development admitted to council that if AMC walks in 2014, the landlord could lease to another chain and the fourplex could stay open.
AMC hasn’t promised or is it likely they will (or are even allowed to) close the fourplex and continue to pay rent on a shuttered theater — in the heart of Bayside. It appears unqualified claims of the loss of 1,049 seats are false.
The landlord will probably find another operator if AMC doesn’t renew its lease in 2014 as opposed to changing uses — especially after newly reopened Santa Monica Place starts generating lots more foot traffic at the Broadway end of Third Street next year.
Last week, I called Erika Cavicante, senior development analyst for HED (who authored the staff report) and asked numerous times where information about AMC proposing to close the fourplex came from. She responded, “we’re looking into it.” Two hours later, when retired commercial real estate attorney Stanley Epstein phoned Cavicante and asked the same question, she told him the information came from AMC’s people at a staff meeting she attended — a meeting that AMC’s corporate spokesman I talked to neither denied or confirmed took place.
AMC’s perceived advantage was removing 1,049 movie seats — a promise they possibly can’t deliver on, nullifying their competitive edge. Nevertheless, HED’s Director Andy Agle advised council, “It’s critical we move forward quickly.” But, Mayor Ken Genser made a motion, approved four to three by council, that without a guarantee of removal of the fourplex’s seats, both proposals would be evaluated by City Council which will choose the better one.
Both projects are similar in size, with numerous enhanced patron amenities and “green” construction. Financial data, affects on traffic and parking (neither proposal includes on-sight parking) and other elements were absent from the report although council’s discussion revealed that ArcLight would pay a 10 percent higher ground rent than AMC.
Staff claims a new multiplex is needed because local movie attendance “declined from approximately two million patrons annually during the 1990s to approximately 1.4 million patrons in 2007."
Ominous predictions claim, “If the local trend continues, Santa Monica is at risk of losing its ability to attract first-run releases” — a ridiculous conclusion that’s pure scare tactics.
Staff assumes this is because the Criterion-6, AMC 7 and Loews/AMC Broadway are dated and obsolete. But, these cinemas opened within the last two decades and many auditoriums offer the same big screens, digital projection, stadium seating and THX/digital sound systems as the newest cinemas do. Couch seating, cafes, reserved seats and online booking are possible through remodeling.
Staff’s assumptions ignore the affects of miserable Downtown traffic, perceived deteriorating promenade ambience, inconvenient garages, parking costs (soon to go up) or that newly opened cinema complexes closer to home may be bigger reasons for dwindling promenade audiences.
Something smells funny here. Why is City Hall in a big rush to negotiate with a politically connected developer/operator whose key selling point now seems to be non-existent? This and other important unanswered questions raise issues in my mind about staff competency, the possibility of hanky-panky and secret back room deals.
Bill Bauer can be reached at email@example.com