Exclusive: Small East Coast movie theater chain to bet big on vacated S.F. cinema
Representatives of Apple Cinemas and James Kilpatrick, an investor in the partnership that owns the 1921 Don Lee Building at 1000 Van Ness Ave., told the Chronicle in a video interview on Monday, June 16, that the company has signed a lease to take over the 92,724-square-foot space vacated by CGV Cinemas more than two years ago.
The chain, headquartered in Walpole, Mass., plans to open the theater in as soon as 30 days in time for the remainder of the summer blockbuster season, depending on how fast it can set up its equipment. CGV, apparently, left the theater in excellent shape.
'I think San Francisco opens up a lot of opportunities,' Apple Cinemas Director of Operations Jessica Robitaille said, who noted the building's historic architecture. 'I think it's really a fantastic space that we have to work with and we have big plans for it.'
Robitaille added that the 14-screen cinema will be state of the art, including IMAX and ScreenX formats and San Francisco's first LED screen.
There are plans to eventually add a restaurant and bar and recliner seats.
For the initial opening of the Van Ness theater, Robitaille said the company is looking to fill between 30 and 35 jobs.
Robitaille and Apple Cinemas co-founder Siva Shan also said they have acquired the former Century Blackhawk Plaza in Danville, which should reopen by the end of the year.
'Every Apple Cinema is a luxury movie theater,' Shan said. 'The location and the (Van Ness) neighborhood is both a residential area as well as a commercial area, and we are very confident people will (embrace) us.'
As for the East Bay location, Shan explained, 'Danville is one of the high-end (Bay Area cities), so it will be a nice neighborhood theater that suits the Danville area.'
Apple Cinemas opened its first theater in 2013 and currently operates 13 locations with 133 screens across six states: Massachusetts, Connecticut, Rhode Island, New Hampshire, Maine and New York. The Bay Area cinemas would be its first on the West Coast.
'They aren't just movie buffs,' Kilpatrick said of Apple Cinemas. 'Plenty of movie enthusiasts open a theater and they can't make it work. But they have a great track record and we looked at year over year increases and they seem to have really good momentum and savvy.'
He added that Muni's Van Ness Bus Rapid Transit project, which tore up Van Ness Avenue and affected businesses from 2016-22, has dramatically increased traffic flow and efficiency and should help the theater's viability.
The Don Lee Building was originally built as an ornate Cadillac showroom but was converted to a cinema and retail space by AMC Theatres in 1998. The AMC 1000 Van Ness operated for 20 years before closing in February 2019 — despite pulling in nearly $8 million in sales in its final year, according to Kilpatrick, which made it one of the top grossing theaters in the city.
CGV Cinemas, a division of South Korean company CJ CGV, took over the theater's lease at the start of the pandemic and opened in September 2021. The business never took off, and it was shuttered by February 2023.
Part of the reason CGV pulled out was that its rent rose from $265,000 a month to $300,000 at the beginning of 2023. In a complicated bit of maneuvering to get out of a $75.2 million guaranty to its landlord, SITE Centers Corp. in Ohio, CGV ended up buying the building for $28 million and flipping it, at a steep loss, to sell the building to its current owner, 1000 Van Ness LP.
Kilpatrick said Apple Cinemas will be paying 'less than a third' of what CGV is paying, because he and his company, Lakeside Investment Company, believe it's better to fill a building with lower-paying tenants as opposed to sitting on an empty property waiting for higher-paying prospects.
'Landlords make a big mistake because they don't want to drop rents and they think they're losing something by reducing the rent, and my feeling is that it's the opposite,' Kilpatrick explained. 'I just think they are way better off getting a lower rent and having a full building than they are wishing and living in fantasy land that rents are still sky high and yet they have a vacant building.'
To that end, Kilpatrick and his partners have signed leases at 1000 Van Ness with a coffee shop, the Emerald Lounge, which is now open and occupies the former CGV box office on the ground floor; and a fitness center, the Grand Athletic Club, which occupies 35,537 feet across four floors and is scheduled to open this summer.
At least three spaces are available for lease. Kilpatrick said he hopes to have the building fully occupied by the end of the year.
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