Some eight years after first entertaining the idea, the Pittsburgh Cultural Trust is abandoning plans for a movie theater in Downtown.
In explaining the decision, the Trust stated that renovation costs had more than doubled compared to pre-pandemic estimates and that the “business model is no longer viable.”
Before the announcement, the Trust had been pursuing a plan to convert the former Bally Total Fitness Club space on Sixth Street near the Byham Theater into a six-screen theater and entertainment space.
It had already spent more than $1 million to do remediation and demolition work inside of the cavernous building, crafting open floor plans for the new screens. The building had a long history as a theater, starting with the Alvin and ending with Gateway Theatre, which closed on June 11, 1980, with a showing of “Friday the 13th.”
Last year before retiring, Kevin McMahon, then the Trust’s CEO and president, reiterated the organization’s commitment to the project after the COVID-19 pandemic had put the plans on hold for two years. He estimated that the cost would run $15 million to $16 million, up significantly from the $10 million to $12 million projected before the pandemic.
The Trust back then was hoping to fill a $5 million gap in the funding through its $150 million Building on the Dream capital campaign.
But the arts organization apparently reassessed plans for the theater after new President and CEO Kendra Whitlock Ingram took over for Mr. McMahon in January.
In its statement, the Trust said that funding partners had agreed to reallocate resources designated for the theater into capital improvement projects for key destinations such as the Byham, the Benedum Center, and the O’Reilly Theater.
Beyond any private donations, the Trust had received a $750,000 state redevelopment assistance capital grant last year for the movie theater. It’s unclear what will happen to that funding.
The Trust was hoping to show a mix of first-run blockbusters and classics at the movie theater. It planned to supplement the flicks with “award-winning cuisine served directly to your seat, exceptional cocktails and the finest craft beers” in a bar/lounge, according to a summary drafted last year. It also was looking at a flexible entertainment space that could be used for live events, art installations and other offerings.
In scrapping the cineplex, the Trust also announced that it had hired consultant U3 Advisors “to determine how it can leverage all of its real estate holdings to best serve the community in the future.”
Over the past 35 years, the organization has compiled extensive real estate holdings along Penn and Liberty avenues after being largely responsible for cleaning up Downtown’s red light district in the 1980s.
In 2015, the Post-Gazette reported that the Trust had spent about $23 million acquiring Downtown real estate, ranging from theaters to office and arts buildings and parking lots. It has added to its holdings since then. Most are concentrated in the area between Sixth and Ninth streets and Liberty and Fort Duquesne Boulevard in the Cultural District.
U3 Advisors “will analyze costs/revenue associated with each of the Trust-owned properties and will also conduct market benchmarking and listening sessions with community stakeholders regarding space needs in Downtown,” a Trust spokesman said.
“We expect to have more details to share in 2024,” he added.
John Valentine, executive director of the Pittsburgh Downtown Neighbors Alliance, described the decision to draw the curtain on the movie theater as sad but understandable.
“Real estate costs went up. Material costs went up. Interest rates went up and it just didn’t make business sense for them,” he said.
He added that the COVID-19 pandemic and streaming services have conspired to change movie-going habits for some people.
While Mr. Valentine formerly championed a Golden Triangle movie theater as the Downtown residential population grew, he no longer is sure there is a market for one.
“My honest answer is, I don’t know. Are there enough neighborhood people to support it? I don’t know,” he said. “The question has changed. Now it’s, ‘Are there enough people who actually go to the movies?’ ... I’ve had people tell me we don’t go to the movies anymore. We watch it at home.”
Mr. Valentine said he supported the Trust’s decision to hire U3 Advisors, whose specialties include real estate analysis and delivery, urban design and campus planning, and community partnerships.
One decision it will have to make, he noted, is what to do with the former Bally’s building, which is primed for redevelopment.
“I think they made a really smart move hiring the consultant to bring in people who are experts at this rather than trying to figure it out themselves,” he said. “It makes sense before they do anything with the real estate, they want to get a lot of opinions and see what direction makes the most sense for them.”
The Trust’s first attempt at developing its real estate with the ambitious RiverParc project in 2006 fell victim to the Great Recession. After its collapse, the developer sued, with the litigation ending with an undisclosed settlement in 2015.
U3 Advisors is not new to Pittsburgh. In the past, it has worked with the Almono partnership in the development of Hazelwood Green, a former coke plant in Hazelwood.
Mark Belko: mbelko@post-gazette.com
First Published: October 9, 2023, 9:53 p.m.
Updated: October 10, 2023, 5:47 p.m.
