CAMPBELL — The Pruneyard Cinemas faces “significant” money challenges and might not have a viable operation if it can’t rework its lease as it navigates a forbidding post-coronavirus economic landscape.
In recent years, the well-known movie house at The Pruneyard has been forced to cope with government-ordered business shutdowns to combat the coronavirus, an uneven return to movie theaters in the Bay Area even after restrictions were lifted, and the fallout from a scarcity of blockbuster movies following the strikes by Hollywood actors and writers.
Now, the most ominous challenge may have arrived: the lease for the Pruneyard Cinemas space. That’s the warning from Dan Orloff and Peter Liebow, managing members for the movie theater and the adjoining Cedar Room lounge.
“We are hoping the landlord will help us with modest adjustments in our rental agreement in light of the fact that we are paying proportionately much more rent than other cinemas,” Orloff said.
That landlord is Regency Centers, one of the nation’s largest operators of shopping centers with grocery stores as an anchor. Regency Centers, through an affiliate, is the owner of The Pruneyard, a high-profile complex of restaurants, shops, and the movie complex.
“We are not talking about closing,” Liebow said. “The lease agreement is a significant factor related to our future.”
The Pruneyard Cinemas owners wouldn’t discuss the rental terms. Yet they have made multiple attempts to coax Regency to rework or otherwise modify the lease agreement, but without success.
The movie house executives have dispatched a letter to Campbell city officials seeking their help in the efforts to craft a revamped lease agreement with Regency Centers.
“We deeply regret to inform you that Pruneyard Cinemas is facing significant financial challenges due to our current lease agreement with Regency Centers, our landlord,” Pruneyard Cinemas principal executives Orloff, Liebow, Jerry Mix and Jack NyBlom wrote in a letter to Campbell Mayor Susan Landry.
It’s not clear what Campbell officials would be able to accomplish, other than to tell Regency Centers of the importance of the Pruneyard Cinemas.
Pruneyard Cinemas officials haven’t been sitting idle while an array of challenges have swamped the movie industry in the Bay area and nationwide.
“We have tried to innovate, create new forms of entertainment, add more revenue for the business, and engage the public in ways that are different than just showing movies,” Liebow said.
The efforts have occurred on numerous fronts.
“We are increasing our offerings, we have added a comedy night, new forms of live entertainment, additional food and beverages, and culinary cinemas where we pair the food with the movie,” Orloff said.
Yet despite all that, economic woes still batter the movie house.
“We’ve been subject to what can only be referred to as a one-two punch,” the Pruneyard Cinemas executives stated in the letter to the city.
These jolts consist primarily of the economic afflictions spawned by the coronavirus and the Hollywood strikes, coupled with the inability to revamp the rental deal with Regency Centers.
“The challenges facing the cinema industry are unprecedented,” Pruneyard Cinemas executives said in the letter.
This news organization reached out by text and email to a media relations executive with Regency Centers. but receive no response.
“We have been able to outrun a lot of problems,” Orloff said. “But you can’t outrun an over-market lease.”
Florida-based Regency Centers, a major retail estate investment trust, harvested a profit of $368.6 million on revenue of $1.42 billion during the one-year period that ended in March, according to the Yahoo Finance website.
Thousands of miles from the Florida headquarters of the real estate titan, the small business owners of the Pruneyard Cinemas continue their efforts to survive.
The Pruneyard Cinemas opened in 2018 as an upscale movie house that began operating in the same space as the Camera 7 multiplex. Camera 7 closed in 2017, ending a decades-long run of film screenings that had begun in 1969.
The owners of the Pruneyard Cinemas will still push forward with the ongoing transformation of the movie complex, whose motto “eat drink film” is a reminder that this is far more than a film venue.
“The Pruneyard Cinemas is a full entertainment center,” Orloff said. “It is very important to Campbell.”
