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BayWalk's Muvico threatens to sue St. Petersburg

ST. PETERSBURG — The company that owns and operates the movie theater at BayWalk is again saying the theater could close.

Fort Lauderdale-based Muvico also says it is preparing to sue the city for mishandling downtown St. Petersburg's entertainment and shopping complex.

"I absolutely do not want to close this theater, and I don't want to litigate," said Muvico chief executive Michael Whalen. "That's not where I want to take this thing. We're willing to put more money up. But we need someone willing to partner with us."

The latest threats come after talks about how to fund improvements to the theater broke down this week.

City officials were prepared to waive up to $214,000 in theater-related parking revenue over the next three years that Muvico otherwise would have been required to pay. The company running BayWalk, Ciminelli Real Estate Services of Florida, also said it would consider waiving $150,000 in fees and charges Muvico would have been required to pay.

But as the deal was about to be sent to the City Council for approval, Muvico said it wanted more.

Whalen asked the city and Ciminelli to loan the chain $1 million to help pay for theater improvements. The loan would be repaid, with interest, if the shopping and entertainment complex is 75 percent full and includes leases with three restaurants, Whalen said.

The loan would help pay for new theater seats, carpet and a projection system. Muvico also wants to install a bar and restaurant in place of the second-floor arcade, and create a four- to five-screen art movie house.

Longer-range plans included an upscale bowling alley, restaurant and bar like Splitsville at Channelside in Tampa.

"We have always believed in BayWalk and were once again willing to invest in this theater," Whalen wrote city officials. "But no one else seems to want to invest besides us. This is very telling as to how others feel about this property and their level of commitment and concern."

Muvico rents the theater property from IStar, a real estate investment trust. It is not owned by the company that owns the rest of BayWalk, C.W. Capital.

City officials said Friday they have not rejected a possible loan payment, but first wanted to see an overall plan for BayWalk's future.

Mayor Rick Baker said the city remains committed to keeping movies in downtown St. Petersburg.

"I don't think (the threats) are helpful to the negotiations," Baker said. "I don't think it's helpful to Muvico, either. I think people are going to start to wonder if the movies are open or not."

Ciminelli principal J. Hunter Swearingen called Muvico's request puzzling.

"We pitched a capital relief fund for our neighbor," said Swearingen, who took over operations of BayWalk in February, after the property fell to foreclosure. "And our neighbor comes back and basically is threatening a lawsuit."

Muvico, which has been facing problems, announced in March that it would keep open the BayWalk location after reaching a deal to sell off four of its 14 locations nationwide.

The sale of the four theaters, including three in South Florida, left the company debt-free, Muvico officials said.

City officials were surprised by the about-face.

"With this guy, I guess anything's possible," said Kevin Dunn, managing director of the city development administration. "He could just close the doors of the theater to say 'I told you so.' "

Muvico officials say the BayWalk theater — the only first-run movie house in St. Petersburg — continues to struggle.

Business from January through April is down 7 percent compared with 2008, according to statistics provided by Muvico.

In that time, the theater ranked 11th in gross sales among 40 theaters in the Tampa Bay market, and did half the business of the Woodlands Square 20 theater in Oldsmar, according to the Muvico figures.

"This theater should be doing a lot better than it's doing," Whalen said.

For BayWalk, Muvico's possible departure could further cripple the already sagging shopping complex. Retail anchor Anne Taylor left earlier this year and restaurant Grille 121 pulled out this spring. Bruce Rabon, who owned two men's retail stores in the complex — Metropolitan Outfitters and Hurricane Pass Outfitters — recently consolidated the stores into one.

City taxpayers have spent at least $20 million to build and support the downtown entertainment complex, which opened to fanfare in November 2000.

BayWalk's Muvico threatens to sue St. Petersburg 04/24/09 [Last modified: Saturday, April 25, 2009 7:01am]
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