Pacific Theatres Expected to Acquire Grove Cinemas
A big screen is fetching big bucks.
Pacific Theatres Corp. is close to buying the Grove theater complex, one of the Los Angeles area’s top-grossing movie houses, for about $30 million, according to people familiar with the deal.
The sale of the 14-screen multiplex, which is located at the Grove retail center in Los Angeles’ Fairfax District, represents one of the highest per-screen prices -- about $2.1 million apiece -- ever paid for a movie theater, according to industry observers. Los Angeles-based Pacific Theatres is scheduled to complete the purchase from developer Rick Caruso today.
“It’s been an incredibly successful theater,” said Greg Laemmle, vice president of Laemmle Theatres, a Los Angeles-based art house chain. “It’s perfectly located in the middle of town with all the amenities that people want.”
The 10-month-old Grove cinemas, which feature an opulent Art Deco-style lobby and 3,000 stadium-style seats, have benefited greatly from their location in the heart of the Grove, a 450,000-square-foot open-air center built by Caruso’s company, Caruso Affiliated Holdings.
“The Grove has a been a strong performer almost out of the box,” said retail industry consultant Rob York at Fransen Co. As a result, the theater “has put pressure on some of the older theaters in that part of Los Angeles.”
Executives at Pacific Theatres and Caruso Affiliated Holdings declined to comment.
Caruso’s initial plans for the Grove, unveiled three years ago, included Pacific Theatres’ concept for a high-tech, luxury cinema called ArcLight.
But Pacific instead built the first ArcLight in a new complex that surrounds the Cinerama Dome in Hollywood. The firm operates the Grove theater under a management contract with Caruso, who had always planned to sell the theater building once it was up and running.
Pacific had to compete against other large movie-chain operators, including AMC Entertainment Inc., to buy the complex, said people familiar with the process. Executives at AMC would not comment.
Owning such a high-grossing and high-profile location would give the family-owned company -- a relatively small regional chain with about two dozen multiplexes in California -- much more clout with movie distributors, according to industry observers.
“It’s really great to be the exhibitor who delivers that theater,” Laemmle said.
The Grove and ArcLight theaters are part of a new generation of luxury movie houses that charge a premium price -- as much as $11.75 and $14, respectively -- for more-comfortable seating and service as well as top-notch sound and projection systems.
“They are the state of the art, and people in this town really respond to that,” said Paul Dergarabedian, president of Exhibitor Relations, which tracks box-office results.