Multiplex battles landlord over termination payment
MEMPHIS, TN — The Muvico Peabody Place 22 & IMAX theater may have closed last June because of lack of business, but Muvico Cinemas is locked in a federal lawsuit with the owner of the downtown mall it was in over a $700,000 escape clause that the theater company says it was tricked into signing.
Business at the Peabody Place mall had been slowly drying up as virtually all the tenants on the shopping center’s second floor, where the theater was located, closed down.
Vacancies were not being replaced, and Muvico actually returned eight of its 22 auditoriums back to the owner two years ago as attendance dropped off. In its brief seven-year history, the theater had gained a reputation for being a hangout for unruly teenagers which drove away older patrons.
During the negotiations to give back some of the theater’s massive 110,000 square feet, the landlord included a $700,000 early termination clause. Muvico said they agreed to it because the landlord assured them that Peabody Place would continue to be a shopping mall. However the owner announced last summer he wanted to to turn the mall into a luxury hotel which Muvico says breaks their 20-year lease. The landlord disagrees and is suing for the $700,000.