Krikorian Mounts Expansion on Former Edwards’ Turf
By DEBORAH BELGUM
George Krikorian says there’s nothing wrong with the movie theater business. All those bankruptcy filings by the big boys just reflect expansion plans that went too far, too fast, he contends.
“One thing I have learned, nothing stays the same,” said Krikorian, chief executive of Redondo Beach-based Krikorian Premiere Theatres. “There is a cycle of change to everything.”
That helps explain why this relatively small chain, with little fanfare, is engaged in a $100 million expansion, including a megaplex planned for Buena Park Downtown, formerly Buena Park Mall.
By targeting underserved markets, Krikorian has its sights set on adding as many as 82 more screens by the end of this year to the 54 it already operates.
As is the case with Buena Park, Krikorian is going after less glitzy redevelopment zones long ignored by the big theater operators.
In Pico Rivera, Krikorian has planned a $22 million, 131,000-square-foot shopping center at the corner of Whittier and Paramount boulevards, which will include a 16-screen cinema. The project should be completed late next year.
Krikorian is buying half the land in the 12-acre site and leasing the other half from the city. The city redevelopment agency is picking up $250,000 in development costs and doing the environmental cleanup on the site that once housed a metal recycling plant, according to Pico Rivera City Manager Dennis Courte-marche.
“One of the interesting things about George is that he has put theaters in areas where the major theaters wouldn’t go,” Courtemarche said.
“You look at each project,” Krikorian said. “The ones you like you try to move forward. And if everything comes together, they go into the pot. It’s not like I’m saying I’m doing 10 movie theaters this week. It’s a flexible plan. This is not a big public organization. It is just me and a support staff.”
Being private also means Krikorian doesn’t have to,and won’t,disclose revenues.
“Krikorian is looking at micromarkets that make a lot of sense for new theaters,” said Kevin Skislock, an entertainment analyst and president of Laguna Research Partners LLC in Laguna Beach.
Krikorian has been able to target those markets, in part, by taking advantage of his rivals’ woes. Krikorian’s 14-screen complex at the Vista Village project in San Diego County came about when Newport Beach-based Edwards Theatres Circuit Inc., one of the chains filing Chapter 11, backed out of its plans for the site.
Krikorian took over the Buena Park site from Edwards, too. And in December, Krikorian opened a 12-screen theater at a Rancho Mirage shopping center that Edwards had planned before it filed for bankruptcy protection last year.
Krikorian runs a lean operation from an out-of-the-way location near the upscale South Bay suburb called Hollywood Rivera. His staff numbers under a dozen. There is no receptionist and no fancy public relations staff. He spends much of his time working out of his car using his cell phone.
Krikorian began his career in the late 1960s working in residential real estate and later branched out to developing condos, townhouses and office buildings.
He got into the movie business by accident. Living on the Palos Verdes Peninsula, Krikorian found that if he wanted to take his three children to the movies, he had to drive for miles.
“It was always hard to find parking. I didn’t like the condition of the theatres,the sticky floors and the chairs that would break your back,” he said.
One afternoon, after a particular movie was sold out, he and his daughter stopped off at a relatively new shopping center in Rolling Hills Estates that was half vacant. He looked around and thought it would be the perfect location for a movie house. He introduced himself to the mall manager and ended up opening a theater on what is now called Avenue of the Peninsula at Rolling Hills Estates. That was 1983.
By 1996, the chain reached 100 screens. That’s when Regal Cinemas offered $35 million to buy eight of his theaters in smaller towns like Hemet, Diamond Bar, Lake Elsinore, El Cajon and Whittier.
“I am extremely thankful that I sold those theaters when I did because otherwise I would have been in the same boat as the rest of the movie chains,” he said. “I know when someone offers me a fair value for something that I may not make the maximum amount of money I could, but at least I’m walking away with a profit.”
Good for Krikorian, bad for Regal, which turned around and closed four of the eight multiplexes it bought and then filed for bankruptcy protection.
The cycle, however, is starting to turn for the large chains. Thanks to a heavy investment in the industry by Philip Anschutz’s Anschutz Corp. and Oaktree Capital Management, two of the nation’s largest exhibitors are poised for a turnaround.
The partnership has taken over Regal Cinemas with 3,898 screens, and acquired a 51% stake in Edward Theatres, which now is out of reorganization.
With another 1,600 screens under Anschutz’s control as a result of bailing out United Artists Theatres this year, the Denver tycoon owns about 20% of the movie theater market. n
Belgum is a staff writer with the Los Angeles Business Journal.
