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Officials cut the ribbon on the new Manassas Park city hall.

The movie chain intended to anchor the newest downtown development in Manassas Park has pulled out of a deal with the city to build and operate the proposed theater adjacent to the new city hall building.

The original plan was for the city to transfer the downtown property to Cinema Cafe, a theater-restaurant hybrid chain with six locations across Virginia, free of charge. In return, the company would build the theater by 2023 or 2024 as part of an anchor for the downtown mixed-use development near city hall.

But City Manager Laszlo Palko said the chain cited inflation in backing out of the deal, leading the city to transfer the land to Norton Scott – the city’s selected private partner for the new city hall building and the 300 downtown homes that are also part of the development – to build a new theater complex and lease it out.

“What we had looked at with Cinema Cafe was an ownership structure … that usually was their business, but inflationary pressures are just changing that for theaters, where they’re not really developing brand new theaters. That’s not very common anymore, they’re just leasing them out,” Palko told InsideNoVa.

While inflation does remain high in terms of year-over-year price increases, the movie theater business also has still not recovered from the COVID-19 pandemic and the proliferation of streaming services with new and old films. The box-office smash “Top Gun: Maverick” helped boost ticket sales earlier this year, but they still lag behind pre-pandemic levels, and some experts say the industry currently has too many theaters around the country and that large movie chains will need to shrink their footprints to stay viable.

According to the New York Times, Cineworld – the owner of Regal Cinemas, the second-biggest chain in the country – is preparing to file for Chapter 11 bankruptcy, which would let the company break leases and downsize in general.

Manassas Park Mayor Jeanette Rishell said in a Facebook post that Cinema Cafe had retained the right to terminate the purchase and sale agreement with the city for any reason during its “study period.”

“There are ongoing negotiations to bring in the anchor in a manner that does not have them build the structure, but instead has the structure built by the current builder, and then the anchor rents from them,” she wrote.

Palko told InsideNoVa that the city and Norton Scott aren’t worried about filling the space, despite the bleaker-than-normal outlook for the theater business.

Cinema Cafe itself has even shown interest in leasing the theater, he said, but it’ll be up to the developer to find a tenant.

“Norton Scott’s now in the driver’s seat. They’re the ones who are going to construct it now and lease it out. We’re introducing them to different theater businesses, and we’re going to keep working with them to get the lease numbers structured correctly. Cinema Cafe is not the only option,” Palko said.

The theater was always planned to open later than other components of the overall development, and now, Palko said, it likely won’t start selling tickets until 2024, once the new Virginia Railways Express parking garage is open nearby. Homes that are part of the development’s residential component continue to go up, city staff moved into the new city hall building earlier this summer and the new library on the ground floor of the city hall building is expected to open Sept. 11.

Leases with Jirani’s to open a new coffee shop in the building and a Mexican restaurant to open next door are still in place.

But some may see signs of another commercial development not panning out for the city. Storefronts built nearby over a decade ago in another city-led development plan are still empty, though the residential market in the area has remained strong.

“This is very worrisome,” former City Council member Donald Shuemaker wrote on Facebook about the news. “We need the anchor for this development to be successful.”

Jared Foretek covers the Manassas area and regional news across Northern Virginia. Reach him at jforetek@insidenova.com

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Jared Foretek covers Prince William County Public Schools, the city of Manassas and transportation news across Northern Virginia. Reach him at jforetek@insidenova.com

(9) comments

Duke Nukem

I called this in 2020 on this very site when they had this stupid idea. What a clown city. The new city center will go the way of "Digital Drive" and the monstrosity across the street from the city hall. Homes and empty commercial lots next to a railroad with too high property taxes and no train horn ban. Anyone with 2 brain cells to rub together (I happen to have several) knew a cinema was dumb post COVID. MP has always been and will always be a shortcut that no one wants to stop and "pick up a coffee" in no matter how good it is. Unless they get some Mecca of an anchor store, pack it up and fold it back into PWC. It's a joke and the property taxes aren't justified. Good fireworks though. They closed Manassas drive to "fix" the railroad crossing and it still sucks, go figure. Imagine if they actually got datacenters to move in to "Digital Drive" instead of apartments...morons.

Henry Howell

That's bogus Manassas Park isn't the MP of 10 years ago Manassas Drive Market Street are popping off with people wanting to live there because of how affordable it is and the connections to DC/Dulles corridors. It's near transit and most importantly apartments and townhouses rent and sell for much less than in Fairfax or Loudoun.

Would love to see an Alamo Draft house or Cinema Cafe lease it out after the city builds it. We need more housing for people in their 20s and 30s who don't have their single family home they've owned for 30 years that's appreciated 10 fold.

Fake Commenter

"While inflation does remain high in terms of year-over-year price increases" Thank your local democrats & Joe Biden!

John Dutko

"This is the United States government. First of all, you never have to default because you print the money. I hate to tell you. So there's never a default."

So printing over $3 trillion in 2020 had nothing to do with inflation? Nah...

And then lowering interest rates had nothing to do with the housing market...

Duke Nukem

Capitalism amirite? Down with capitalism they exclaim!

John Smith

Thanks, Joe.

Allen Muchnick

For not ending all of Trump's import tariffs? For Russia's war on Ukraine caused by Trump's idol Putin

Duke Nukem

News flash Allen, Hillary and the FBI were closer to colluding with Putin than Trump every was. I hate to burst your bubble but Igor from Russia was on the FBI's payroll sabotaging the Trump admin. I guess that is a-ok with you though since they are on your side.

Tom Manson

InsideNova should do a better job filtering blatant misinformation and trolling like this.

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