Closed Movie House Spurs Bad Reviews in Moorpark

An eight-screen movie theater once touted as key to revitalizing the city’s main commercial corridor could end up becoming a $30,000-a-month drain on its treasury, depending on the outcome of a recently filed lawsuit.

Owners of Mission Bell Plaza, near Moorpark’s southwestern border, contend a 1995 redevelopment deal entitles them to rent payments until 2006 or as long as the theater building remains vacant--a claim city leaders dispute, according to the lawsuit filed in Ventura County Superior Court on March 2. If forced to pay and if a new tenant is not secured, the city’s tab could total $1.8 million.

The clash stems from the abrupt departure of Regal Cinemas 8--one of thousands of movie houses across the country closing because of financial turmoil in the industry caused in part by the theater building spree of the mid-1990s.

Moorpark officials are still trying to find a replacement tenant for the 27,000-square-foot building on West Los Angeles Avenue. The building was stripped bare when Regal shut its doors for good in late January. Officials said they want to resolve the matter quickly because the overall health of the strip mall is crucial for the city. The Big Kmart in the four-acre plaza is among Moorpark’s top sales-tax producers.

“The loss of the theater hurts, because it’s another reason for people to be there,” Assistant City Manager Hugh Riley said. “Having that gone is damaging to the viability of the center.”

While several major theater chains have filed for bankruptcy protection during the past year, financially strapped Regal has undergone a restructuring plan that has resulted in the closure of about 650 screens nationwide, spokesman Dick Westerling said.

The Moorpark eightplex was identified as an “under-performing location” and was recommended for closure, he said.

With Regal gone, the city and Mission Bell Partners are fighting over a provision in a development agreement that makes the city responsible for $1.10 per square foot per month--about $30,000--until 2006 if a new tenant is not signed.

According to the lawsuit, Moorpark officials contend they are exempt from the obligation because the property owners failed to secure Regal’s movie theater equipment as collateral after it shut down.

The rent guarantee is also subject to various conditions, including that the developer “aggressively seek” a new movie theater tenant or another business approved by the city while the rent guarantee is in effect, according to the agreement.

An attorney for the shopping center owners said the company has hired brokers and is searching for a replacement tenant, though he conceded a large building with sloped floors may be difficult to sell to anyone other than a movie theater operator.

“We have people scouring the woods,” attorney Donald Gottesman said.

Securing a new theater operator may be difficult, said Kathleen Head, an analyst for Keyser Marston Associates in Los Angeles, one of the state’s leading consultants on redevelopment deals.

With only two of the major movie theater chains not in financial straits or bankruptcy--Century Cinemas and Pacific Theaters--competition is fierce.

“Theater chains are only going to pick places where they’ve got a strong market, where they can make a go of it and be successful,” Head said. “I don’t think a lease will be signed in Moorpark.”

Even obtaining an operating agreement--a payment structure that is much less risky for theater chains and what Head said is becoming the wave of the future--would be difficult because seats, light fixtures and signs were removed from the Moorpark site days after the theater closed.

“It would be very unlikely that a theater operator in today’s times would come in and pick up that capital expense,” she said.

The city lured the plaza owners to Moorpark by offering a $3.5-million low-cost loan to purchase the land. The rental guarantee was another incentive to bring in a movie theater operator, Mayor Pat Hunter said.

A majority of Moorpark residents in a 1993 community survey ranked a movie theater high among the amenities the city lacked. And city leaders believed it would be a catalyst for the center, drawing thousands of patrons who would then eat at the restaurants, shop in the stores and bring a bit of night life to the suburb.

“Of course I would prefer there be a tenant there and the redevelopment agency would not be forced into the rent guarantee,” Hunter said. “But by the same token, it was not an unusual thing the redevelopment agency did.”

Head, however, said Moorpark’s rent guarantee was relatively uncommon for the mid-1990s. Those types of deals have become more common now because of the uncertainty in the industry, she added.

“That would have been an anomaly in 1995, and an indication of a marginal site,” Head said. “They were obviously willing to take a risk to achieve the goal.”

If the city is forced to pay rent for the vacant building, the money--amounting to $356,400 a year--would come out of the redevelopment agency’s funds normally used for affordable housing projects and other community improvement efforts, Riley said. About $1.2 million is available in the fund this year.

Riley referred all comments on the dispute to Moorpark’s city attorney, who did not return phone calls last week.

Gottesman called Moorpark’s argument a “technicality,” alleging the redevelopment agency knew that Regal was not offering its equipment as collateral but agreed to the lease anyway.

Meanwhile, Moorpark residents are back to spending 20 minutes on the freeway if they want to catch a first-run movie--something they did for more than 40 years before the Regal opened in Mission Bell Plaza.

A poster in one of the empty advertisement cases outside the theater refers customers to Regal’s 16-screen theater in Simi Valley.

“I’m sad about it,” said resident Barbara Snowden as she was heading into Kmart recently. “I would come during the afternoons with my kids, and I do miss it. I think everyone does.”

Despite Regal’s financial woes, Hunter said he believes one of the problems with the center has been the mix of tenants--an odd pairing of discount retail stores, fast-food restaurants and service businesses such as a one-hour photo and an auto shop.

“There is very little people can do either before the movie begins or after it concludes,” Hunter said, contrasting the center with the Simi Valley theater, which is surrounded by restaurants, coffeehouses and juice bars.

Mark Fiore, manager of an Italian restaurant and deli next door to the vacant theater, said he and other small-business owners in the plaza haven’t seen a dramatic decline in business. Still, they are anxious for the city to do something.

Brian Chou, owner of China Palace Express, said another theater would be good for the mall and the city. But Chou, who said his sales have dipped about 10% on busy weekend nights, is open to other options.

“Any kind of business there would help,” he said.