The story of the independent Palo Alto Square Theater may get a Hollywood happy ending.
The new president of Landmark Theatres, which runs Palo Alto Square along with three other Midpeninsula theaters, said he is hopeful the company is "two to three weeks away" from reaching a deal with Equity, the company that owns the El Camino Real property where the movie theater sits.
Although Landmark executives were optimistic this week a settlement would be reached, they also admitted that they narrowly avoided a darker, more film noir ending.
In March, Equity handed Landmark a 90-day eviction notice that would have closed the theater next Friday. On May 25, Landmark Theatres was sold and new President Paul Richardson was brought in. Immediately, Richardson called Equity and got a 60-day extension to the eviction so the two sides would have until August to work out a deal.
"We made it down to the wire," Richardson said. He said that had the sale of Landmark gone through a few weeks later, the company might have lost Palo Alto Square.
The sale of Landmark brought the company out of bankruptcy. Oaktree Capital, the Los Angeles venture capital company that purchased the theater chain, paid off the company's creditors. The rosier economic outlook as well as community support for the theater were factors that led to the promising settlement with Equity.
Richardson and Landmark Executive Vice President Bert Manzari were in San Francisco on Wednesday, meeting with local managers of theaters in their chain as well as members of the media.
For the two men, it's a bit like dÈjý vu. Richardson and Manzari began their own chain of movie theaters in 1974, mostly in the American Southwest. In 1982, they merged with Landmark Theatres to become the largest circuit of independent movie theatres in the country. Richardson and Manzari ran the company until 1998, when they sold their interests in the company to Silver Cinemas.
At the beginning of this year, Silver Cinemas was facing economic hardship and operating under Chapter 11 bankruptcy. On May 25, Oaktree Capitol bought out Silver Cinemas and brought Richardson and Manzari back in to manage the company.
"We plan to run it the way it used to be run," Richardson said. "We have a real dedication to specialized films."
Richardson, who is so green with the revamped Landmark that he didn't even have a business card, did note that in both his current and past negotiations with Equity "it's always been a delight dealing with them."
Manzari, now the executive vice president for film and marketing, said that although Landmark was under new management, filmgoers could expect to see the same types of films at the Palo Alto Square since the booking agents would remain the same.
"We're old folks, stick to our nethers kind of guys," Richardson said.
Just four years ago, the Square was similarly saved at the last moment from an Equity eviction. In 1997, when the Chicago-based real estate investment office did not offer a lease to the movie chain for the two-screen Palo Alto theater, pressure from city staff convinced Equity to keep the movie theater in the community.
Richardson said public support from Palo Alto residents and officials was once again instrumental in the negotiations.
Manzari added it is critical the community continues to lend support to the theater, but Richardson downplayed the need for further outcry.
"The message has been heard," Richardson said.
Susan Arpan, Palo Alto's economics resource planning manager, said she was pleased to hear Equity was in talks with Landmark. Arpan, along with Mayor Sandy Eakins and such council members as Gary Fazzino, had been lobbying Equity on the theater's behalf.
Arpan noted that one thing in Landmark's favor was that the zoning for the site required a movie theater to be there.
A report filed by Arpan stated that at the time Equity handed the theater an eviction notice, "(they) may not have had a complete understanding of the zoning implications of the site."
Richardson is a movie buff, whose love for independent films came through as he spoke about films such as "Memento," one the movies currently playing at Palo Alto Square.
He is hopeful Landmark will be able to make some improvements to the aesthetic of the Palo Alto Square Theater, as long as a long-term lease could be arranged with Equity. For the past few years, the theater has been running on concurrent monthly leases.
"With a month-to-month lease, you can't make those improvements," Richardson said. "If we get a long-term lease, we can begin to put some funds back into it."
E-mail Bill D'Agostino at firstname.lastname@example.org