Kansas City-based AMC Entertainment Inc. has revived stalled plans to bring a 16-screen, state-of-the-art cineplex to downtown Burbank, a modest move out of the retrenchment mode the entire theater industry has been in for more than a year. AMC received city approval earlier this month to tear down the 14-screen theater it already operates at First Street and Palm Avenue and build a new stadium-style theater across the street. The new 4,200-seat theater will be part of a $60 million, two-story, 80,000-square-foot complex with restaurants and stores on the lower level and roughly 885 parking spaces, according to Jack Lynch, senior project manager with Burbank’s redevelopment agency. The existing theater was built in 1986 as a 10-screen facility. Four more screens were added in 1989, but it still has only 3,850 seats and an older, sloping floor plan. The new theater, originally scheduled to open by this Christmas, is now expected to open in April 2003. AMC is one of the nation’s top three movie theater operators with 180 theaters and 2,800 screens in 21 states and the District of Columbia, as well as the Asian and European markets. But like its top competitors, including New York-based Loews Cineplex Entertainment Corp., the company suffered during the late 1990s, primarily because of overbuilding throughout the industry. As a result of the slowdown, nine theater chains, including Loews, were forced into Chapter 11 reorganization. While some have successfully reorganized, all have shut down many of their older theaters. AMC closed 279 theaters across the country. “AMC substantially curtailed its building plans over the last couple of years,” said Matthew Harrigan, an analyst with Denver-based Janco Partners, but it did not eliminate them altogether. “Their anticipated capital expenditures went from $90 million to $75 million just over the last year alone.” While other theater chains continue to founder, Harrigan said, AMC has struck the right balance between theater closures and renovations. “Clearly AMC remains the frontrunner in terms of a turnaround, primarily because it has managed its capital expenditures closely and is a proven winner in key markets,” said Harrigan. AMC’s first-quarter losses this year narrowed slightly to $11.9 million on revenues of $309.5 million compared to a loss of $12.9 million on revenues of $288 million for the same quarter in 2000. AMC’s stock was trading at $10.52 on Friday. Its 52-week high was $14.10 on July 20; its 52-week low $1 on Oct. 24, 2000. “Unfortunately, not all theater chains are enjoying the kind of market strength they are,’ Harrigan said, “and it’s a little soon to say how much longer it will take for the others to move forward again.” Elsewhere in the Valley, Pacific Theaters Corp. closed its five-screen complex in the Sherman Oaks Galleria last year to make way for a new 16-screen theater set to open when mall renovations are completed in November. In Woodland Hills, Pacific closed its Topanga Theater and United Artists Theater Co. closed its six-screen Woodland Hills cineplex. Both moves followed the opening of AMC’s 16-screen theater in the Woodland Hills Promenade. Pacific will also open the Paseo 14 in the new Pasadena Paseo project just outside of Old Town soon. “We are looking ahead, we have lots of stuff on the table and we are excited,” said Kevin Mortesen, a spokesman for Pacific Theaters. Pacific is also adding 14 screens at the landmark Cinerama Dome in Hollywood as part of its Cinerama Dome Entertainment Center scheduled to open by spring of 2002. Newport Beach-based Edwards Theaters Circuit Inc., the company that pioneered the first multi-screen theater complex in 1939, is set to open a five and a half-story Edwards Giant Screen Theater in Valencia in January. The theater is one of several Edwards took over from IMAX Corp., according to Fred Bell, company spokesman. The slowdown in theater construction contributed to delays for another planned Burbank project. Until the late 1990s, Regent Properties had hoped to build a mixed-use complex on the site of the old police headquarters on Olive Avenue that would have included offices, shops, a hotel and a movie theater. But the troubles in the theater business made it difficult for Regent to secure a theater tenant. Legacy Partners Commercial Inc. later offered Burbank a plan that also included a movie theater. But by October of last year, the city, concerned that Legacy’s plans would also fall through, accepted a second proposal from local developer Cusimano Group. Then Cusimano dropped out of the running earlier this year when the city refused to reduce the asking price for property. The Burbank City Council is now preparing to select a fourth developer, whose project includes primarily housing with some retail and office components, but no theater. Because its Burbank project was on the table prior to the slowdown, AMC always intended to move forward with it, according to company spokesman Rick King. However, he conceded closing so many older theaters across the county has alleviated some of the industry’s woes, making it possible to start thinking seriously about expansion once again. “What we did do, however, was slow down our expansion plans while we studied markets for new, larger multi-screen theaters, and where we could either eliminate or renovate some of our smaller theaters,” King said. King said AMC policy prohibits him from discussing plans for new theaters in the Valley and elsewhere. “I think we are starting to see the market level out now,” said Lynch. “I can’t speak for the other theater companies, but for AMC I know we have confidence in them and they have always known it was a proven market for them here in Burbank.” King said it’s likely industry leaders will close more older theaters over time because market trends indicate moviegoers prefer multi-screen theaters to smaller single-screen theaters. “Clearly the megaplex is the product that today’s audience chooses overwhelmingly, Burbank is an important trade area, and we think this is a good business decision,” said King. The proposed Burbank project was put on hold in 2000 when AMC failed to secure construction funding.
