Garner Towne cinema closes

Staff WriterOctober 6, 2010 

The struggling Garner Towne Square movie theater has closed. Its owners blame the slow economy and a lease dispute with the shopping center's landlord.

Friday night was the theater's last. The signs, fixtures and other equipment are gone.

"We really tried. We didn't want to have to do this," said Hope Branch, director of operations for Carolina Cinemas. "We were paying extremely high rent in a dying shopping center. When you're barely in the black, it just wasn't good for our company."

The small chain bought the 10-screen theater in May 2009 from Regal Entertainment Group, which still holds the lease. About six months ago, the companies asked landlord Regency Centers for a break on the rent, citing slower ticket sales.

Regency said no.

"Lots of retailers have been asking for help" during the downturn, said John Pharr, Regency's senior vice president for the Southeast. "We may be sympathetic ... but we can quickly see who's really hurting and who's crying wolf."

Officials took into account the relative financial strength of Regal, the country's largest cinema chain with more than 500 theaters, he added. "This was really a dispute between Carolina Cinemas and Regal."

Regency has turned the matter over to its lawyers, who will try to work out a settlement with Regal, Pharr said.

"A lot of it is posturing," he added. "When a store goes dark, that's pretty serious poker. They do it because it probably wasn't profitable at the end of the day."

Florida-based Regency owns or manages shopping centers throughout the country, including Raleigh's Cameron Village.

The real estate company will focus on what else could go into the now-vacant Garner Towne Square space, but it's unlikely to remain a movie theater. Some theaters have become vocational schools or medical facilities, Pharr said.

That means one less choice for moviegoers in southeast Wake County and northwest Johnston County.

Even before the recession, the 10-screen Garner theater faced tough competition from White Oak 14, a newer, stadium-style theater about five miles away.

Regal forced to sell

Regal acquired that theater with its takeover of the Consolidated Theatres chain in early 2008. But federal antitrust officials forced Regal to divest the Garner theater, saying the chain would control too much of the movie market in that area if it owned both.

Carolina Cinemas, which is based in Texas and has a regional office in Charlotte, took over the Garner theater, as well as the Raleigh Grande 16 and movie theaters in Charlotte and Asheville.

The chain tried several strategies to boost attendance in Garner. Last summer, Carolina Cinemas switched to showing second-run movies for $2, but went back to first-run films after about three months. The owner also added 3-D technology.

But more movie fans are turning to cheaper options, including Netflix's online and mail-order DVD business.

"Everybody's pocketbooks have gotten leaner," Branch said. "It's really the tightest I've seen since the mid-1990s."

Compounding the problem: The theater is at the back of Garner Towne Square, at Timber Drive and U.S. 70.

"You can't see it from the road, and you don't have all the restaurants right there, like White Oak does," Branch said. "It was a difficult location to run."

The Garner theater's two managers have transferred to the Raleigh Grande. But the theater's 15 to 20 part-time workers have been laid off. They were given severance pay and will be able to file for unemployment benefits, Branch said.

alan.wolf@newsobserver.com or 919-829-4572

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