As theater chains post losses, Wallace Theaters growing

Throughout the country, major theater chains have indulged in a five-year building spree, building 16- to 24-screen "mega-plexes" in crowded major markets. As the saturation point has peaked, several of the big players such as United Artists have filed bankruptcy and others have backed away from announced projects.

In Reno, Regal Cinemas leased a new 12-plex built as part of the downtown redevelopment project, then sold the lease to Century Theaters just days before the opening. Regal shut down 200 of its 4,400 screens.

The nation's four largest chains - Regal, Loews Cineplex Entertainment, Carmike Cinemas and AMC Entertainment - all lost money the past two years, according to the Los Angeles Times.

But Wallace Theaters Corp., owner of Carson City's two movie theaters, sets its sights at smaller targets, operating in the middle market in 10 states and international locations in the Pacific Rim.

By focusing on bringing comfortable stadium seating and the latest technology to patrons in smaller communities, Wallace has grown from about 100 screens in 1996 to more than 500 today.

"We currently have four stadium-seated auditoriums in Carson City," Wallace vice president of marketing and advertising David Lyons said. "They are our largest auditoriums and are well received by customers."

The four Northgate 10 screens also were the first existing theaters Wallace converted to stadium seating, which means each row of seats sits a foot or more higher than the one in front. The design gives patrons unobstructed views of the screen and allows for 42-inch seat backs.

Sara Pettitt, general manager at Northgate, oversees a facility that can accommodate 1,800 patrons.

Wallace also installed digital sound in all 10 Northgate auditoriums, making the complex the first in Northern Nevada with all-digital sound.

Wallace has found providing quality, innovative facilities in smaller markets good for business.

"Wallace Theaters is currently expanding with state-of-the-art, 100-percent stadium-seated and 100-percent digital surround sound mega-plexes in Gilbert, Ariz.; Merced, Calif., and Kona, Hawaii," Lyons said. "Our most recent opening was a state-of-the-art facility in Early, Texas."

Wallace now has 520 screen in 10 states and the Pacific, Lyons said.

Honolulu-based Wallace Theater Corp. came to Carson City in 1991, buying three existing theaters - The Northside 4 in the Northgate Center, Cinema 50 in the Scolari's Center on Highway 50 East and Frontier Plaza 3 - from Act III Theatres.

In 1996, Wallace expanded Northside 4 by adding six new theaters, dubbing it Northgate Movies 10. Cinema 50 offered second-run attractions at budget prices. The Frontier Plaza operation was closed after the Northgate expansion.

In 1998, the four largest Northgate theaters were converted to stadium-style seating. The company had grown to 42 locations in Nevada, California, Missouri and the Pacific islands.

Besides the Carson City locations, Wallace has also owned the Greenbrae Theaters in Sparks, the single-screen Stateline Cinema and Lakeside 4 Theatre in South Lake Tahoe, and the three-screen Meadowdale 3 Theaters in Gardnerville. Wallace built the Horizon Stadium 8 in the Horizon Resort Casino and upgraded the Sparks location to the New Greenbrae Cinema 8.

The Meadowdale operation was bought from Bill Tomerlin, who built the three-screen theater in the Meadowdale Shopping Center in 1977. Tomerlin had proposed another movie complex in Ironwood Plaza in Minden, but the 11-screen project was eventually opened in 1998 by the Incline Village-based North Shore Theatres. Wallace bought Meadowdale 3 in early 1999, operating it until last month.

The Stateline Cinema and Lakeside Theatre were closed in 1999 as Wallace built the modern stadium-style Horizon 8.

Wallace also bid to build a theater complex in the Grand Summit Resort Hotel being built as part of the $350 million Park Avenue Redevelopment Project in South Lake Tahoe, but Royal Theaters of America was picked for that spot. Wallace filed suit against Park Avenue developer Trans-Sierra Investments, the South Lake Tahoe Redevelopment Agency and others, contending the California redevelopment law mandates a reasonable preference be given to existing tenants in redevelopment areas. The Stateline Cinema was among the '60s-era buildings demolished to make way for the project.

Royal Theaters recently filed for reorganization under the Chapter 11 bankruptcy process, possibly reopening the door for Wallace in the project.

"Now that (Resort Theaters of America) is bankrupt, I wouldn't be surprised if Trans-Sierra wanted to make a deal with us," Scott Wallace, chief executive office of Wallace theater Corp., told the Tahoe Daily Tribune last week. "As a result of RTA's bankruptcy, we're in settlement negotiations right now."

Wallace is a privately held corporation, ans does not have to report its financial information and Lyons declined o discuss specific future plans.

But he said the future of cinema entertainment includes online ticket sales and digital projection, which was used in a few theaters for this year's premiere of "Star Wars Episode One."