AMC may abandon struggling downtown megaplex in Minneapolis
MINNEAPOLIS, MN — AMC is considering whether it will continue to operate the AMC Block E 15 in downtown Minneapolis when its current lease on the theater expires next year. At present, due to low revenue, AMC is essentially paying no rent. Recently, a court ruled that though the current lease terms requires Block E’s owners to extend a renewal of the lease, it does not need to be extended under the same terms as the current one. The theater opened in 2002 under Crown management; AMC took over when it bought Kerasotes which had acquired the the theater from Crown. Block E has lost several major tenants over the last year.
Under its current lease, the theater’s rent is based on a percentage of annual gross sales: 15 percent above $3 million, 20 percent above $5 million, or 25 percent above $7 million. According to Camelot’s lawsuit, AMC currently “is not paying any rent” to occupy the 84,000-square-foot, stadium-seating movie theater, which seems to imply that the tenant’s revenue has been below $3 million.
The judge acknowledged that the contract contains ambiguous language but stated that, in their differing interpretations, Camelot presented the stronger argument. The ruling determined that the lease offers a renewal, but not an extension.
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