Muviville Entertainment Complex's future has become unclear even before ground has been broken for it near Spotsylvania Towne Centre.
Muvico Theaters, lead partner in the project, is "on the verge of bankruptcy" after failing to make payments on a $60 million line of credit and faces eviction at several locations, according to an article appearing in yesterday's Miami Herald.
"At this point, we've been assured by the management of Muvico that they have worked out these problems that were mentioned in published reports," said Cafaro spokesman Joe Bell. "They'll be able to speak with greater detail about their solution in the next seven to 10 days."
Multiple phone calls by The Free Lance-Star to Muvico's Fort Lauderdale headquarters and its partner, Tampa-based Splitsville Luxury Lanes and Dinner Lounge, were not returned yesterday. Neither was a call to creditor iStar Financial.
iStar filed a lawsuit against Muvico with the New York Supreme Court on Feb. 12, saying the theater chain's holding company had failed to make loan payments since October, had failed to make lease payments for at least five of its 13 theaters and "has failed to complete certain construction requirements with respect to a pending theater site."
Last month Muvico opened its 14th theater in Thousand Oaks, Calif., and the only pending project according to its Web site is the one in Spotsylvania County. Muvico had to go back to the drawing board for Muviville after its first partner, Jupiter, Fla.-based Frank Theatres, pulled out of the project.
Muvico has said construction was to begin this spring on Muviville, a 12-screen, all-stadium-seat theater with 14 bowling lanes, a dance floor, party rooms and upscale bars and lounges. It would be located on property Cafaro owns between the Village at Towne Centre and the newly opened Residence Inn.
Mike Whalen, who heads Muvico, told a Miami television station reporter yesterday that the company is trying to restructure its debt and may have to sell some assets, including movie theaters.
iStar, however, is seeking to gain control of Muvico and replace its directors and chief executive officer since its loan was guaranteed with the right to become the sole owner of Muvico's membership interests. The action is needed to stabilize Muvico's business operations, preserve employees' jobs and protect stakeholders' interests, including its own, according to the lawsuit.
In addition, a Kansas City real estate investment trust is trying to evict Muvico from three of its other theaters in Florida, and the St. Petersburg, Fla., shopping center where Muvico owns a 20-screen megaplex just went into foreclosure.
Cathy Jett: 540/374-5407
Email: cjett@freelancestar.com