Roll the credits.
The relationship between the Metropolitan Theatres Corporation and the Fiesta 5 Theatre in downtown Santa Barbara appears to be approaching its final scene.
The city of Santa Barbara’s lease with Metropolitan Theatres ends Sept. 30, and it is in discussions to lease the property to the Santa Barbara International Film Festival.
Metropolitan Theatres filed for Chapter 11 bankruptcy in March and is behind on its rent for the Fiesta 5 location, according to the city.
Santa Barbara’s assigned negotiators reached out to potential suitors for the site, which includes 916, 918, and 920 State Street, on the same block as City Parking Lot #9.
“We recognize the lease is coming up,” said Assistant City Attorney John Doimas. “All we are doing is trying to get ahead of the game. We don’t want it sitting there vacant.”
The discussions come after Metropolitan Theatres Corporation filed for bankruptcy and stated that it was trying to get relief for some of its debt.
According to the bankruptcy court filing, Metropolitan Theatres owed about $313,882 to various landlords for its rent obligations. The company pays about $2.6 million annually in rent for its theater properties.
In its bankruptcy filing, Metropolitan Theatres states that it wants to streamline its operations and potentially shed and/or renegotiate its leases “that would otherwise continue to be a drain on MTC’s business.”
The city plans to discuss price and lease terms for Fiesta 5 with Roger Durling, executive director of the Film Festival, and Sean Pratt, in a closed-session meeting Tuesday at City Hall.
California’s Open Meetings Law allows government entities to meet behind closed doors if they are discussing real estate deals and lease terms. The City Council would have to approve a lease in open session.
Doimas told Noozhawk that Metropolitan Theatres Corporation is about three months behind in its rent.
Durling declined to comment on the negotiations.
Future of Fiesta 5
The Fiesta 5 shows mainstream movies and it is unclear how the venue would change if leased by the Santa Barbara International Film Festival, a nonprofit organization.
The SBIFF organizes an annual film festival that features movie screenings, industry panels and celebrity award ceremonies in theatres across Santa Barbara, including the Fiesta 5.
The organization also owns The Riviera Theatre, and its remodel and renovation transformed the once musky feel of the theater into a much-improved, elegant experience.
SBIFF holds year-round events at the venue, including international and independent film screenings and industry Q&As.
Sources told Noozhawk that SBIFF leasing the Fiesta 5 is the best outcome. The site cannot be transformed into housing without a total tear-down.
The Metropolitan Theatres Bankruptcy Case
Metropolitan Theatres operates the The Arlington Theatre and the Metro 4 Theatre, along with the Fiesta 5, Paseo Nuevo Cinemas and Hitchcock Cinema & Public House in Santa Barbara.
It also operates the Camino Real Cinemas and Fairview Theatre in Goleta.
But the theatres have fallen on hard financial times and some are considered outdated compared to other nearby establishments.
The Collection in Oxnard, for one, has theatres with modern seats that recline and vibrate. Some Metropolitan Theatres locations have point-of-sale systems that don’t accept tap technology for payment.
The movie industry overall has been hit hard with competition from streaming, and fewer major blockbuster films.
In addition to its outstanding lease payments, Metropolitan Theatres was indebted to funder ATP for $2.1 million and American Riviera Bank for $5.2 million, according to the bankruptcy filing.