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Santa Monica Mall Owner Moves to Evict ArcLight Theater

The owner of the Santa Monica Place mall has filed a lawsuit seeking to evict the ArcLight Theatre for non-payment of rent.

Macerich, the real estate investment trust that owns the mall, served an eviction notice on April 13, the day after Pacific Theatres announced that it would permanently close all 17 of its ArcLight and Pacific locations.

The eviction notice gave Pacific seven days to pay $368,841.60 or forfeit the premises. Macerich’s attorneys filed an unlawful detainer action in Los Angeles Superior Court on Monday afternoon. Pacific has yet to respond in court, and a spokesman declined to comment on the lawsuit.

Macerich had already sued Pacific on Feb. 25 for breaching its lease at two locations: the ArcLight in Santa Monica and the Pacific location in Lakewood. According to the complaint, Pacific had not paid rent for either location since April 2020, when the chain closed its locations due to the pandemic. The suit also disclosed that Pacific had been underpaying its rent on the Lakewood lease from January to March 2020 — indicating that the location was in trouble before the pandemic hit.

The suit alleged that Pacific owed $1.9 million in back rent on the Santa Monica property, and $1.5 million on the Lakewood theater. Pacific has not responded to that suit either.

Pacific is separately fighting with OliverMcMillan, the San Diego developer that owns the theater in downtown Culver City. OliverMcMillan sued last July, seeking $781,999.62 in delinquent rent.

Pacific’s lawyers fought back, arguing that the it should not have to pay thanks to the Culver City rent moratorium. The company also claimed that OliverMcMillan had sued under the wrong corporate entity. OliverMcMillan countered that Pacific was going “to great lengths to avoid the heart of the dispute.”

“Defendants signed a Lease and Guaranty,” the attorneys wrote. “They have not paid a dime of rent since March 1, 2020. They owe the rent. Defendants do not question the amount sought or deny that they have withheld rent.”

But on March 12, Judge Mitchell Beckloff ruled in favor of Pacific, finding that the alternate entity, OMCC Theater Owner LLC, is the true landlord and that OliverMcMillan did not have standing to seize Pacific’s assets. Judge Michael P. Linfield later rejected a motion from OMCC to intervene in the case, forcing OMCC to file a new lawsuit. By that point, the amount of unpaid rent had grown to $2.7 million.

Pacific countersued OMCC on March 23, claiming that the Culver City COVID shutdown order triggered a breach in OMCC’s obligation under the lease to ensure that “there are no… governmental rules, statutes, ordinances, policies or plans, which would materially interfere with the operation” of a theater.

Nora Dashwood, a vice president at Pacific Theatres, said in a court declaration that she had notified the landlord in March 2020 that the company would not be able to pay rent. She noted that in 40 years in the exhibition business, she had never encountered a situation where government orders forced the closure of all movie theaters.

“The impact of these closures was and is devastating the Tenant’s business, as Tenant’s operating income at the Premises has been reduced to zero,” she wrote.

Attorneys and representatives for OliverMcMillan and Macerich declined to comment. Pacific Theatres has not commented publicly since announced that its locations would close for good earlier this month. The closure has been felt most acutely by fans of the ArcLight Hollywood and the Cinerama Dome, and the fate of that historic landmark remains unclear.

“This was not the outcome anyone wanted, but despite a huge effort that exhausted all potential options, the company does not have a viable way forward,” the company said at the time.

Written by kinq

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