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» Cinematour Forum   » Cinemas in the News   » Cinema Fusion Bankruptcy

   
Author Topic: Cinema Fusion Bankruptcy
Christopher Crouch
Member

Posts: 292
From: Anaheim, CA
Registered: Feb 2006


 - posted January 27, 2010 11:47 AM      Profile for Christopher Crouch   Email Christopher Crouch         Edit/Delete Post 
From the Orange County Business Journal

quote:
Anaheim GardenWalk Movie Theater Files for Bankruptcy

By SHERRI CRUZ

Orange County Business Journal Staff

The operator of the movie theaters at The Shops at Anaheim GardenWalk has filed for bankruptcy reorganization in a dispute with the mall’s operator.

Cinema Fusion, an upscale theater that serves alcohol at some screenings, filed for Chapter 11 bankruptcy.

The theater is run by Gardenwalk Cinemas LLC and is a venture of Newport Beach-based Sanborn Theatres Inc. and investors.

The filing covers Gardenwalk Cinemas and doesn't include Sanborn Theatres.

Geoffrey Madden, a partner at investment banking firm Christman, Peters & Madden that counts Sanborn as a client, called the bankruptcy filing a defensive move by Sanborn Theatres and its investors, which face an eviction lawsuit and another legal action by GardenWalk’s owners.

The movie theater is profitable, according to Madden. The filing was made to avoid litigation, he said.

Gardenwalk Cinemas and the mall are at odds over rent, which led to the theater to withhold rent payments and the mall to pursue eviction, according to Madden.

Excel Realty Holdings of San Diego developed and runs the mall, which opened in 2008.

Bill Stone, senior vice president of development for Excel, said the dispute is about unpaid bills to contractors on the theater.

Unpaid contractors filed about $4 million in liens against the theater and the mall, he said. Excel has settled about $3 million worth of those liens, according to Stone.

The liens caused Anaheim GardenWalk to default on its $188 million debt last year, Stone said. That prompted a unit of Citigroup Inc. to file a default notice against the mall, first step in a potential foreclosure.

Gardenwalk Cinemas made an initial $27,000 payment to the mall in 2008 but hasn’t paid rent, insurance or other payments since then, according to Stone.

The mall is owed $2.5 million in rent, according to Gardenwalk Cinemas’ bankruptcy filing.

Stone said the mall wants to bring in another theater operator.

Gardenwalk Cinemas listed $1 million to $10 million in debt in its bankruptcy filing.

Most of its creditors are unsecured. Several of its debts are relatively small.

Sanborn Theatres owns six theaters in California, including in San Luis Obispo and Temecula. The Sanborn family got its start in the movie theater business almost a century ago.

The theater at the GardenWalk is its first upscale theater, which includes “21+ Screenings” that let movie watchers enjoy drinks in their seats with no kids allowed.

There are 14 screens at the theater, including three smaller screening rooms for parties and corporate events.

The smaller, reserved-seating screening rooms have soft music, no commercials and curtains that rise up to unveil the screen.

Owner Bruce Sanborn hoped to recreate a classic movie theater ambiance.

Cinema Fusion was Sanborn Theater’s re-entry into Orange County.

The company built Cinemapolis (now called Cinema City) in the 1980s in Anaheim Hills, when Sanborn Theaters was known as SoCal Cinemas.

His dad also was a partner at the Lido Theatre in Newport Beach for a couple of years. His grandfather, Arthur Sanborn, opened Hollywood Theater in 1918.



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Jeff Arellano
Senior Member

Posts: 685
From: Monterey Park, CA
Registered: Jun 2003


 - posted January 27, 2010 03:14 PM      Profile for Jeff Arellano   Email Jeff Arellano         Edit/Delete Post 
The entire shopping center is a complete bust. The theatres are nice, but when you dont advertise that much and make a draw to the theater, its doom.

I can see RAVE picking up this location if they shut down. I doubt AMC or Cinemark will pick it up.

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Christopher Crouch
Member

Posts: 292
From: Anaheim, CA
Registered: Feb 2006


 - posted January 27, 2010 04:04 PM      Profile for Christopher Crouch   Email Christopher Crouch         Edit/Delete Post 
quote:
The entire shopping center is a complete bust.
I think that will be a sticking point with most potential operators. Difficult/awkward location, established competitor down the street, and a center that is not only a flop, but on the brink of forclosure; not the most desirable of aquisitions.

The unfortunate aspect is that the theatre likely would have been a runaway success in just about any other location.

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Christopher Crouch
Member

Posts: 292
From: Anaheim, CA
Registered: Feb 2006


 - posted February 10, 2010 11:00 AM      Profile for Christopher Crouch   Email Christopher Crouch         Edit/Delete Post 
I heard a rumor that Ultra Star will soon be the theatre's new operator.

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Scott D. Neff
Tour Guide

Posts: 661
From: San Francisco, CA
Registered: Feb 2003


 - posted February 10, 2010 07:31 PM      Profile for Scott D. Neff   Email Scott D. Neff         Edit/Delete Post 
The whole place has always sounded to me like a duplication of Neonopolis in Vegas. Why build an entertainment destination in/near one of the largest entertainment destinations in the state? Locals won't want to deal with the traffic and tourists and tourists aren't there to see movies and eat dinner very often outside of Disneyland/Casinos.

People in that part of Orange County are going to the Block or Century if they have to. They aren't going to Downtown Disney.

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Jeff Arellano
Senior Member

Posts: 685
From: Monterey Park, CA
Registered: Jun 2003


 - posted February 11, 2010 11:48 AM      Profile for Jeff Arellano   Email Jeff Arellano         Edit/Delete Post 
This isnt in Downtown Disney. The AMC Downtown Disney 12 plex is there and actually does good business. That's another reason why this theatre isnt doing well. It may have had a chance with the older crowd if they connected it to DTD, but you have to leave the park area!

This is located about 2 blocks east of Disneyland between Katella Ave and Disney Way. Its a mall that has the theatre as its only anchor:

http://www.anaheimgardenwalk.com/

Its not connected to Disneyland at all. Minus the restaurants on Katella, its a ghost town.

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Scott D. Neff
Tour Guide

Posts: 661
From: San Francisco, CA
Registered: Feb 2003


 - posted February 11, 2010 07:49 PM      Profile for Scott D. Neff   Email Scott D. Neff         Edit/Delete Post 
I understand that it's not connected to Disney, but it seems like they may have been counting on Disney traffic and tourists to fill the center.

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Chris Utley
Senior Member

Posts: 631
From: Torrance, CA
Registered: May 2003


 - posted February 12, 2010 08:44 AM      Profile for Chris Utley   Author's Homepage   Email Chris Utley         Edit/Delete Post 
Building this place was a bad idea. You have DTD, The Block and Century 25 in the immediate vicinity. It made no sense whatsoever to build another plex in the area.

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Ron Pierce
Member

Posts: 59
From: Tustin, CA
Registered: Feb 2003


 - posted February 14, 2010 09:46 AM      Profile for Ron Pierce   Email Ron Pierce         Edit/Delete Post 
I don't even think that they trained their employees in common courtesy. I went there last summer for a matinee of 'Funny People.' The student/ticket taker didn't even greet me but continued to read his textbook and took my ticket without making eye contact, as if I didn't exist. Besides me there was only one other person in the audience.
The developers (probably not from Orange County) should have learned a lesson from the mediocre performance of Triangle Square in Costa Mesa. I, and I'm sure most Orange Countians, don't like to drive into and trudge through a labyrinth of a parking garage to see a movie. (Although I have seen other parking garages in OC that are very easy to manuever in) It took me about 10 minutes to get my bearings there but it was enough to prevent me from going back.

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Ron Pierce
Member

Posts: 59
From: Tustin, CA
Registered: Feb 2003


 - posted April 30, 2010 11:00 AM      Profile for Ron Pierce   Email Ron Pierce         Edit/Delete Post 
From the Business section of the OC Register, April 30, 2010:

Los Angeles shopping center magnate Rick Caruso, who owns The Grove in Los Angeles and The Americana at Brand in Glendale, said he’s teaming up with private equity firm TPG to purchase and makeover distressed shopping centers in Orange County.

The Grove, which opened in 2002 and is home to Nordstrom, Crate & Barrel and Pottery Barn Kids, attracts 18 million people a year. According to its website, 92 percent of its customers on property make a purchase and it tied for No. 2 on trade publication Women’s Wear Daily’s list of top California malls. Americana at Brand is home to retailers such as Barneys New York Co-op and Tiffany & Co.

The joint venture will “invest up to $750 million of debt and equity in opportunistic investments in retail centers and mixed-use properties in select markets in the western United States,” according to a statement from Caruso-TPG Partners.

“We found an ideal partner in TPG with its global investment experience and background in real estate, giving us a competitive advantage in securing top property opportunities in this depressed market,” Caruso said.

Could Caruso-TPG Partners be interested in Anaheim GardenWalk or The Kaleidoscope in Mission Viejo? Officials of the joint venture could not be reached to find out what Orange County properties the company is eyeing.

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Matthew Lok
New Member

Posts: 44
From: Montebello, CA
Registered: Aug 2009


 - posted April 30, 2010 12:18 PM      Profile for Matthew Lok   Email Matthew Lok         Edit/Delete Post 
QUOTE Ron Pierce:

"I don't even think that they trained their employees in common courtesy. I went there last summer for a matinee of 'Funny People.' The student/ticket taker didn't even greet me but continued to read his textbook and took my ticket without making eye contact, as if I didn't exist."

Hi Ron. The same thing kind of happened to me (one time) at AMC Puente Hills 20. The kid looked up from his book made eye contact, but did not greet me. He didn't seem like he wanted to be bothered.

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Christopher Crouch
Member

Posts: 292
From: Anaheim, CA
Registered: Feb 2006


 - posted April 30, 2010 12:27 PM      Profile for Christopher Crouch   Email Christopher Crouch         Edit/Delete Post 
The Gardenwalk almost seems like a given. Between being relatively new, still mostly vacant, and in a theoretically lucrative area, there is a lot to work with there.

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Eric Gieszl
Member

Posts: 57
From: Las Vegas
Registered: Sep 2006


 - posted May 01, 2010 10:54 PM      Profile for Eric Gieszl           Edit/Delete Post 
I don't think GardenWalk is appealing at all. The resort district is all about Disneyland. I can't see major retailers opening up shop in there since many who live in Orange County have no desire to go anywhere near this area unless they're going to a theme park. There are other struggling centers that have a lot more potential.

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Christopher Crouch
Member

Posts: 292
From: Anaheim, CA
Registered: Feb 2006


 - posted May 01, 2010 11:28 PM      Profile for Christopher Crouch   Email Christopher Crouch         Edit/Delete Post 
I don't think the Garndenwalk (complex or theatre) will ever be a success, just that it's the sort of distressed property project that would appeal to an outside developer.

The Kaleidoscope and Triangle Square might be candidates, but I don't see either of those sites ever being long term successes. Something like the Laguna Hills Mall or maybe even the Buena Park Mall would be better suited for redevelopment.

As for the Gardenwalk Theatre:

quote:
don't even think that they trained their employees in common courtesy.
I noted a lack of training during my visits too; which was surprising, as the general manager of "Cinefusion" had previously been in charge of the Lido, when he worked for Regency. Then again, I think Cinefusion's crew has been suffering from "failure complex" for quite some time (it's often difficult to keep people motivated within a failing environment).

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David Imboden
New Member

Posts: 7
From: Orange, CA
Registered: Jul 2010


 - posted July 22, 2010 06:40 PM      Profile for David Imboden   Email David Imboden         Edit/Delete Post 
From the OC Register

quote:
ANAHEIM – North Orange County's only IMAX theater has shut down and the attached 21-and-over screening rooms – the county's only movie theaters serving alcohol – are in jeopardy amid continuing financial troubles at the GardenWalk mall.

Owners of CinemaFusion Theatre and Sky Lobby Lounge, who failed to remain current on lease payments leading to bankruptcy hearings, had first been ordered to be out by Friday.

But after shutting down the IMAX theater and beginning to unbolt chairs from seven of the 14 theaters, the property owner, Citicorp, asked the theater operator, Newport Beach-based Sanborn Theatres Inc., to halt the dismantling and keep operating what is left of the theater until mid-August.

The two parties are now scheduled to meet Friday to discuss the theater's future, said Bruce Sanborn, president of the theater company.

"We are still hopeful that some kind of deal can be worked out for us to continuing operating these theaters," Sanborn said. "It may not be likely, but we love this theater and serving our guests. We are the inventors of this concept – why not let us continue with our invention?"

GardenWalk officials say they are negotiating with another theater company to take over operations.

In a statement, Nicole Jasinskas, the mall marketing director said:

"We are in discussions with San Diego-based company UltraStar Cinemas, who has a history of operating great luxury theaters. The new operator will be taking over the theater as soon as a transition can be worked out and the intention is to not let the theater go dark."

CinemaFusion, at 321 W. Katella Ave., gained a loyal but small following, especially from the 21-and-over crowd who loved the idea of grabbing a beer and flick and not worrying about teenagers talking or kids kicking the back of their chairs.
Reviews are glowing on consumer-review websites such as Yelp.com.

But Sanborn said GardenWalk has failed to become the regional and tourist attraction that it was billed as when it opened in fall 2008. The key 13- to 18-year-old demographic has never embraced the theater.

Two adjoining hotels and a time-share project, originally expected to be open at GardenWalk by now, have stalled.

In April, ownership of GardenWalk went to Citicorp after the original developer defaulted on a $210-million loan.

Sanborn estimates his company and investors lost nearly $5 million on the theater.

IMAX pulled the plug on CinemaFusion earlier this month after a separate legal dispute between the Canadian-based company and a Sanborn theater in Riverside County. It's unclear whether IMAX would be willing to work with a new operator.

Julie Bravo, UltraStar Cinema's vice president of advertising and marketing, said her company would like to continue with IMAX and the 21-and-over aspect, but there's no guarantee.

UltraStar runs 13 theaters in Arizona and Southern California; GardenWalk would be its first Orange County location.

Because Sanborn Theatres owns the movie house's furnishings, including the chairs, UltraStar would need to buy new furnishings or agree to buy Sanborn's.

"We are ready," Bravo said. "We are very interested in the theater. We're very optimistic that when they (the landlords) are ready, we will go in and turn that theater around."

Contact the writer: 714-704-3769 or ecarpenter@ocregister.com


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