Movie theater
Pruneyard Cinemas in The Pruneyard shopping center is considered an anchor tenant, drawing 350,000 locals a year to the center. Photo by Moryt Milo.

The long-term sustainability of a beloved Campbell theater is in jeopardy, after being hit with an unmanageable rent hike.

Pruneyard Cinemas management is working to restructure its lease with landlord, Regency Centers, and is looking for local supporters to help Regency understand its longstanding relationship with the community. In January the Cinemas, located in The Pruneyard shopping center, was hit with an inordinate 20% rent hike due to property tax increases. Theater management said they received no explanation for the delayed hike five years after Regency Centers bought the property in 2019.

Management called it a “one-two punch” combined with the dire effects of the pandemic on the industry, according to a letter submitted Wednesday morning to the city. The letter also said, “We have had substantial problems with our landlord” and the “current lease terms threaten the viability of the business.”

The Pruneyard Cinemas’ Cedar Room is a favorite for locals and often draws a crowd. Photo by Moryt Milo.

Dale Yoshihara, current owner of Kyoto Palace, which has been in The Pruneyard for more than 25 years, said he’s seen a noticeable increase in foot traffic since the Cinemas opened. He said the entertainment center is a major draw with its unique offerings, and it would be devastating if the theaters were to close because retail doesn’t draw the same traffic.

“Retail didn’t work years ago. We can only build out so many restaurants,” he told San José Spotlight. “I think we have one of every type of restaurant and ethnicity. (There’s) not a lot more that they can put in here without it looking like a food court.”

Dan Orloff, managing member of the theater and Campbell Chamber of Commerce board president, said the theater will keep discussing the lease with its Florida-based landlord. The priority is to keep serving Campbell.

“Our requests have been modest, and we believe that we bring value to Campbell and are hopeful that Regency Centers will recognize this and work with us to find a mutually beneficial solution,” he told San José Spotlight.

Eric Davidson, Regency Centers spokesperson, said the conversations have stalled until the real estate investment company can gain more clarity on some of its concerns.

“Without going into detail, we would just need to get those aspects addressed,” he told San José Spotlight.

The recent hike exacerbated an already high rent, management said. Pruneyard Cinemas attempted to restructure its lease terms during the pandemic when sales plummeted, but Regency Centers did not meet its requests during negotiations, saddling it with an  “above-market rate rent in the post-pandemic environment,” according to the letter.

The iconic theater is a historic Campbell gem, opening in 1969 long before today’s shops and restaurants put down stakes. It has changed ownership over time, with Pruneyard Cinemas becoming an anchor tenant in 2018. Today, Orloff said the movie theater draws roughly 350,000 people per year to the shopping center and that traffic spills over into the surrounding businesses.

Kym White said the cozy feel of the Cinemas combined with the big-name films and good food is something she hasn’t found anywhere else. Photo by Annalise Freimarck.

Kym White, 35, said she often takes her three children to the Cinemas for a special treat. As someone who experiences anxiety in movie theaters, she said the cozy feel of the Cinemas combined with the big-name films and good food is something she hasn’t found anywhere else. She would be sad if the theaters left.

“If we can’t come see it at Pruneyard Cinemas, I’m not going to see it,” she told San José Spotlight. “That’s basically my philosophy when it comes to movies.”

Orloff said there is a petition that the community can sign to help show their support for the Cinemas.

In 2017, the nearly 50-year-old Camera 7 closed in The Pruneyard. More than a year later Pruneyard Cinemas opened with a revamped look that included a dine-in experience, where customers could order food and drinks to their seats from the Cedar Room, an adjoining restaurant and bar.

It also offers events such as comedy shows and drag queen bingo, which Orloff said helped its comeback from the pandemic, bringing revenues up to about 80% of what they were pre-pandemic.

Drag Brunch has become a favorite event in the Cedar Room which is part of the Pruneyard Cinemas experience. Photo by Moryt Milo.

Paul Gunsky has been selling popcorn at his family-owned movie chain, CineLux Theatres, since the age of 10. Gunsky sits on the board of the National Association of Theatre Owners, which represents more than 35,000 movie screens nationwide. He has his own loyal following in Campbell with his special matinee pricing and other deals.

(Movies are) a very inexpensive form of entertainment that really brings communities together. It brings neighbors together,” he told San José Spotlight, “and the loss of any theater will be very impactful.”

Contact Annalise Freimarck at [email protected] or follow @annalise_ellen on X, formerly known as Twitter.

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