Pacific Hollywood Cinerama Dome Gone Or Coming Back?

[Terry Monohan]

Looks like the Southern CA cinema chain Pacific Theatres will not be opening most of their movie theatres. They turned in the keys to the landlords and owners of the cinema property that they don't own a few days ago. A sad day for the huge curved screen Hollywood Cinerama Dome as this was one of their top theatres in the small Pacific chain.

I don't think all is not lost. This key return thing is just a legal move to reduce rents or pull out of areas that are not pulling in people.

The parent company that owns Pacific Theatres is owned by the Forman family called 'Decurion' they are not a poor company, In fact in the 1950's/60's William Forman the grandfather of the current brothers that run the company today bought cheap land around California for his Pacific Drive In circuit. The Decurion company not only has a ton of land $ that old outdoor cinemas were located they have turned many into malls with a Pacific Theatre multiplex built on a few of the former outdoor theatres. The Syufy family in Northern CA did the same thing with their old drive in land.

The young Forman's never liked Cinerama that they inherited and at one time had other ideas for the Hollywood Cinerama Theatre on Sunset Blvd in Hollywood CA. The Decurion company run by the Forman family is more into real estate these days. Being all their Pacific Cinemas have been closed the past year money was not coming in. Now just as most theatres are re opening they go and do this not opening again tactic. They probably collected all the government money that was given out to closed up businesses the past year.

Shame on the city of Culver City CA that is so money hungry during the C19 they want Pacific Theatres to pay a huge sum of back rent now and they have been closed for a year not collecting any coin admissions. When the nice Pacific Theatre Culver City leaves downtown CV the city will be sorry. The downtown will go under without a cinema.

I think the land that the Hollywood Pacific Cinerama sits on is owned by the Formans so some day soon after all the dust settles with the landlords and property owners Pacific let's hope will re open the Dome.

At least the 'Decurion' Forman family company can transfer some of the cash they are getting for valuable land they own and rents in Southern CA to help with the re opening of their great Pacific Theatre chain or who knows maybe they want out of the movie theatre business after all these years when things can be watched at home streaming?

The long closed up original Warner Hollywood Cinerama Theatre still sits closed on Hollywood Blvd. You would think the Forman family would do something with this classic theatre that is still in good shape but it just sits closed year after year!

[Bobby Henderson]

I think the powers that be are going to be sorry in the long run if they allow cinemas to wither and disappear. The scenario of the Cinerama Dome theater closing is not sitting well with many movie fans. If it stays closed for good, gets demolished and replaced with luxury condos for douchebags the outcome will go over even less well.

I believe executives at movie studios and media companies are getting lulled into a false sense of security with the streaming business. The way it looks they appear to believe streaming works as an acceptable replacement to the theatrical release model. There two problems. First, the past year has not been normal. Any "success" with streaming is based on an artificial bubble due to more people being stuck at home far more of the time. Second, the novelty of streaming newly released movies has not worn off yet. The executives really need to ask themselves honestly if the general public will still be willing to pay any sort of premium at all to watch a movie if commercial cinemas are gone.

A kind of sleazy power play is taking place in the commercial and residential real estate markets. Lots of really odd, short-term plays are being made on properties for quick cash, but possibly with long term consequences. IMHO there is an even worse bubble in place now than the one which wrecked the global economy 15 years ago. The housing shortage is bad enough through many parts of the US that a perverse syndrome has developed where speculators and other kinds of investors are snapping up properties just to let them sit empty. This has been going on in cities like NYC for some time, but now has spread to many other parts of the country.

Movie theater properties are caught up in this madness. Many high profile, premiere class theaters in major cities have been closed and demolished to make way for more valuable properties. If a theater like the Cinerama Dome is lost for good the movie industry will lose a physical jewel of sorts in its branding and industry visibility. What kind of movie industry can even call itself a movie industry if its customers can only watch its product on the TV screen at home?

Any city still depends on brick and mortar retailers and other quality of life attractions to get people out of their houses. Cinemas are one of those key ingredients. Cinemas are an "anchor" for many kinds of retail, dining and leisure centers. How well is a city going to thrive if everyone never leaves the house and orders all their shit from Amazon? I certainly don't see the movie industry as we've known it doing well with in that situation. It will just be a bunch of race to the bottom economics between some TV networks in the end.

[Leo Enticknap]

The Dome is a special case. It's an iconic theater with a huge fan base, special for its architecture, history, and technology. I'd be surprised and saddened if it doesn't reopen under new ownership and/or management. Like the Egyptian before its sale to Netflix, it could be a project for a nonprofit. In fact, flush with cash from the sale of the Egyptian, this is something that the American Cinematheque might be interested in looking at.

The other Arclight and Pacific sites are more problematic, IMHO. The bottom line is that movie theater customers now expect recliners at the very least (and post-C19, the built-in social distancing of these things is another attraction), and many also want an at-seat restaurant offering. Most of the theaters we're talking about are 1980s and '90s stadium houses, with high density, no legroom seating, and traditional, popcorn and soda concessions only. A lot of them are going to need serious investment to be competitive going forward, especially with Alamo Drafthouse and Studio Movie Grill moving into the region.

As Terry points out, Arclight/Pacific's parent company is primarily in the real estate business, not the movie theater business. Of course I'd hope to see as many of their theaters as possible reopen under a new brand, but I fear that not all of them will.

[Bobby Henderson]

With theatrical release windows as short as they were even prior to the pandemic and all but gone now in the cases of Disney and Warner Bros I don't know how a luxury style theater with big recliners and dine-in options can be self-sustainable. There are so many compounding factors that work against such theaters.

Here in Lawton much of the population is low to middle income. There are some high income earners in the medical and defense tech fields, but they're a small minority of the overall demographic. I don't think many residents here will be willing to spend over $20 per ticket for that kind of experience, not to mention the premiums for food, drinks, alcohol, etc. Currently our local restaurant industry is struggling to stay staffed. One of my friends is a GM at a Tex-Mex restaurant. He is offering $500 sign-on bonuses to new employees and $500 bonuses to employees who recruit new staffers. That's how bad they're hurting for labor. A movie theater with dine-in service would have to compete hard for the same labor pool.

In bigger cities demographics aren't as much a problem; there is a greater pool of high income people. But staffing issues may still be a problem unless the pay is competitive enough. The bigger problem is the cost of the theater's location. The outright cost of the land or lease prices may be so high the theater won't be able to generate the ticket revenue needed to pay the bills. Some theaters have closed because property owners refused to renew the lease. If that screwy trend continues cinemas in big cities may be exiled to the suburbs.

Recliner theaters are nice, but the drawback is they have far lower seating capacities. Too many of those kinds of auditoriums have fewer than 100 seats and screens that are only modestly large. That leads to some bad math for potential ticket sales over the run of one movie. With small capacity auditoriums the theater can string together sold out shows yet still sell only a modest number of tickets. And with a really short or non-existent theatrical window that cuts overall potential ticket sales down even worse. Making matters worse, there is an expectation for luxury theaters charging a luxury price to offer the latest bells and whistles of cinema technology. Stuff like laser projection or Dolby Atmos does not come cheap, especially if either is going to be done right.

[Leo Enticknap]

Pacific/Arclight are a chain that is concentrated in the LA Metro and exurbia, so my earlier remarks were written in that context. Point totally taken that the economics of theater exhibition are likely very different in a medium sized Midwest city. All I can say is that as a service tech covering most of Arclight/Pacific's area since 2017, I have not been involved in a single new theater installation that did not have recliners, and only one that wasn't doing an at seat restaurant service as well. I've also been involved in upgrade projects that have included taking out traditional stadium seats and replacing them with recliners (and, as you point out, reducing the auditorium capacity by about half in the process). As a customer, of the two theaters closest to me, one was completely converted from a traditional stadium 'plex to a leather-seated, restaurant/theater when it changed hands (the Studio Movie Grill, formerly Krikorian, in Redlands, CA), and the other (Harkins, Redlands) has an interesting approach whereby their houses have some regular seats and some recliners, the latter having a higher ticket price. Just regular concessions, though.

I don't know how they make this business model work: my guess is that they sell the theater tickets at, or close to, a break even point, with most of their margin made on the restaurant offering (and especially booze). As for laser projectors, they're not expensive anymore. The upfront cost of one is now only around a third more than their xenon-lit predecessors, and that will quickly pay for itself in reduced power and maintenance costs, and not having to buy bulbs for them. Immersive audio is a pricier proposition, but from the number of installs we've been doing, it appears to be commercially viable for what it costs.

[Harold Hallikainen]

I remember seeing a presentation at ICTA several years ago that analyzed various improvements that could be made to an auditorium. According to that analysis, replacing traditional seats with recliners had the highest return on investment, even with reduced capacity.

[Leo Enticknap]

Here.

What’s next for empty Pacific Theaters and ArcLight Cinemas?

Decurion Corp.’s decision to permanently shutter its Pacific Theaters and ArcLight Cinemas chains after closing the 300 California venues amid the COVID-19 pandemic will leave lots of empty real estate in its wake.

Pacific Theaters, whose footprint includes the iconic ArcLight and Cinerama Dome theaters in Hollywood, said that “despite a huge effort that exhausted all potential options, the company does not have a viable way forward.”

So what becomes of these properties? Will they be snapped up by another theater chain or subdivided into other retail uses?

One industry expert figures it could be a little of both.

“A likely scenario would be another theater chain coming along that has adapted better during the pandemic,” said Adam Handfield, a senior associate with SRS Real Estate Partners. “But one company taking over all 300 theaters would be a long shot. I could see a company taking over 25 or 50 locations. It would probably be on a case-by-case basis.”

Handfield cited the Dallas-based Studio Movie Grill and the Mexican-owned Cineopolis theater chains as potential suitors for the properties but said the venues could also be split up for other uses.

“It could be used for multifamily housing, grocery stores or fitness boxes, side by side,” he said.

Upside down on rental leases

The trade publication Deadline Hollywood said Decurion has “handed the keys back” to the landlords on all their ArcLight and Pacific properties. What happens next, Deadline said, will be up to the property owners.

“Many of the ArcLight venues the chain doesn’t own, and it’s those where they rent where the company is upside down on their leases,” the article stated.

Pacific Theaters also operates multiplexes at The Grove and The Americana at Brand shopping malls. Both Los Angeles-area retail centers are owned by Caruso Affiliated.

Rick Caruso, the billionaire, founder and CEO of Caruso Affiliated, said he plans to maintain a theater presence at both malls.

“Our theaters have consistently performed among the top in the country, so I have no doubt in my mind that this is what our guest is looking for – that this is a part of the very culture that defines who we are as Angelenos,” Caruso said via email. “We believe in the future of this sector, the future of entertainment, and we will not submit to the pressures of this unrelenting year.”

Supporters of the Cinerama Dome on Sunset Boulevard have already launched a petition on Change.org to preserve the iconic venue.

“It has been the choice of the greatest filmmakers in the world to showcase their films, including Quentin Tarantino, Stanley Kubrick, Steven Spielberg, Christopher Nolan and many more,” the petition says.

More than 10,000 people had signed the appeal as of Thursday, April 15.

Luis Olloqui, CEO of Cinepolis’ U.S. operations, didn’t say if his company was interested in taking over any of the theaters. But he expressed sadness over Pacific’s decision to close them.

“We were very disappointed to hear of the closing of ArcLight,” he said. “It’s been an extremely difficult year on all exhibitors and we sincerely hope that something can be done to save these iconic theaters.”
Regal reopenings

The Pacific Theater closures were announced less than two weeks after Regal reopened six of its Southern California theaters with scores of other Regal locations set to reopen later this month and in May.

Regal’s reopening plan includes a wide range of health and safety measures that adhere to CinemaSafe protocol and guidelines aimed at curbing the spread of COVID-19. Employees will wear masks and undergo daily health screenings, including temperature checks where mandated.

A heavy hit during COVID-19

Few businesses have been as heavily impacted by COVID-19 as movie theaters. AMC Entertainment reported losses of $946 million for the final quarter of 2020, and the company lost a total of $4.6 billion for fiscal 2020.

“This past year has presented AMC with the most challenging market conditions in the 100-year history of the company,” AMC president and CEO Adam Aron told investors recently.

Aron added that the company’s theaters in New York City have reopened with L.A.-area theaters likely to follow soon.

A report from IBISWorld reveals that revenue for the movie theaters industry plummeted 77.2% in 2020 due to the COVID-19 pandemic and social distancing measures.

“Over the five years to 2026, the industry will likely continue to struggle with difficulties left behind from the coronavirus pandemic,” the report said. “Large profit losses will likely drive some industry operators to close permanently and leave others with lasting challenges.”

Recovering employment and consumer spending will likely help the industry moving forward, IBISWorld said. But despite an expected 53.5% jump in revenue in 2021, it will take several years for the industry to recover to pre-pandemic levels.

The report predicts the industry will generate $6.3 billion in revenue in 2021.

Caruso said his properties have always been inspired by the art of filmmaking and the magic of Hollywood.

“We will rise up and reimagine the future of moviegoing,” he said. “We firmly believe in the future of the moviegoing experience.”

Positive noises from Caruso; especially given that he owns dozens, if not hundreds of malls across the state, many of which have movie theaters in them - not just those two.

[Jim Cassedy]

It will probably wind up being converted into the world's largest Starbucks, or a geodesic Walgreens.

[Terry Monohan]

Or the new 'HOLLYWOOD GYM-O-RAMA'. All these new money computer people moving into Hollywood need a place to work out. They stream movies at home. The Pacific Theatre group can collect big monthly fitness memberships way more then a ticket for a movie seat. They can show nature films while you work out on the big ex CINERAMA® curved screen with wrap around rave music.

They will just need a spot in the old candy counter to put in showers/lockers and dressing rooms.

Pacific can also turn the former Dome into a large nightclub if they choose. When the right promoter wants to pay a big lease price movies will never be shown again on the Cinerama® screen as we know It.

[Leo Enticknap]

Stick some sodium lights up in the roof of the dome, and you have yourself the biggest marijuana farm in the state, probably.

[Mitchell Dvoskin]

Now you Los Angeles people know how us NYC and Northern NJ people felt when the Ziegfeld Theatre closed. At the time, I know that the new operators were planning to convert the Ziegfeld into a club, but I don't know if it ever opened as such.

[Bobby Henderson]

Google Street View imagery shows it at the Ziegfeld Ballroom:

ZiegfeldBallroom.jpg

[Leo Enticknap]

At least the building is still there, even if it has been repurposed.

[Mark Ogden]

It appears that AMC will take over the Grove in Hollywood and the Brand Americana in Glendale. For a few minutes yesterday, an empty template for both theaters appeared on AMC's website before being taken down, pretty much an omen.

[Leo Enticknap]

Drove past The Dome one day last week - totally boarded up, with homeless people's tents on the sidewalks surrounding it. Very sad. The Grove is in a Rick Caruso-owned mall, and he has stated his belief that his large malls need to have a movie theater in them to be commercially viable. I'm guessing that he could have cut AMC a very good deal on rent to make that happen.