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SAN
FRANCISCO
Sundance Cinemas to buy Kabuki theater
City, Japantown leaders welcome deal for multiplex
2006 March 24: Sundance
Cinemas, the aspiring independent movie theater chain affiliated with Robert
Redford, has signed a purchase agreement for San Francisco's AMC Kabuki
multiplex, a Sundance spokesman said Thursday.
The deal, which might make San Francisco
home of the first of what Sundance hopes will be a national network of
theaters, was welcomed by Mayor Gavin Newsom's office and leaders of Japan town,
where the 8-screen Kabuki is located.
The complex would be renovated with
stadium-style seating and renamed Sundance Kabuki, said Bert Manzari,
president of film and marketing for Sundance Cinemas.
Renovation would begin after the San
Francisco International Film Festival ends May 4 with plans to reopen in
early fall this year, according to a news release from Sundance Cinemas and
AMC Theatres. AMC is selling the Kabuki complex as part of an anti-trust
agreement permitting the merger of the AMC and Loews chains.
Sundance earlier announced plans to build
a new theater in Madison, Wis., with a planned opening in November this
year. Manzari said it will be "a horse race" to see whether the
San Francisco is the first Sundance venue to open its doors.
The Sundance schedule will include
independent and foreign language films as well as documentaries and
classics, Manzari said.
He declined to divulge financial terms of
the deal, which he said was signed Wednesday and is pending resolution of
regulatory details before it becomes final.
"We're encouraged by this
development," said Jesse Blout, director of the mayor's office of
economic and workforce development. "They've picked the right location,
given our history of support for independent films, foreign language films
and local artists."
The news raised hopes in Japan town,
where many people worried about what would happen to the complex, in light
of the uncertain fate of central neighborhood properties that are being
sold. The Kabuki hosts a wide range of community events, including Cherry
Blossom Festival activities, the annual Day of Remembrance and various
performances.
"We have no intention of changing
the community-based nature of the theater," Manzari said.
"I look forward to a wonderful
partnership with Sundance," said attorney Kaz Maniwa, who chairs the
Japanese Cultural and Community Center in Japan town and the California
Japanese American Community Leadership Council.
Paul Osaki, executive director of the
Japanese Cultural and Community Center, said Sundance "could be a
welcome addition to the Japan town community," but he also wondered if
it could be as strong an economic magnet as first-run films have been at the
AMC Kabuki. He said the complex draws between 500,000 and 600,000 people a
year with over $9 million in "economic runoff."
Blout said he thinks it will be
successful and "will help the prospects of Japan town financially by
bringing in more foot traffic to the area and help revitalize the mall and
adjacent properties."
Sundance Cinemas LLC is run by Manzari
and Chief Executive Officer Paul Richardson, who played leading roles in
expanding Landmark Theatres into America's largest theater circuit for
independent film.
Reconstituted in May last year after a
failed launch in 1997, Sundance Cinemas is a partnership of Redford-owned
Sundance Group, Richardson, Manzari and Los Angeles-based Oaktree Capital
Management, an investment firm providing financing for the venture.
AMC officials could not be reached
for comment. - SAN
FRANCISCO CHRONICLE 2006 March 24
2006: Sale
of Japantown hotels increases local fears
A deal to sell Japantown's two signature
hotels -- the Miyako and Miyako Inn -- has been signed without a guarantee
of long-term ownership, prompting fear in the neighborhood that the sale
could further erode the district's cultural identity.
"Our fear is that the hotels will be
turned into condos," said San Francisco attorney Kaz Maniwa, who chairs
the Japanese Cultural and Community Center in Japantown and the California
Japanese American Community Leadership Council.
The hotels are part of a larger package
that includes most of the 3-square-block Japantown mall, which the Beverly
Hills company 3D Investments is negotiating to buy.
Maniwa said community representatives had
requested that the sale include a requirement that the buyer hold the
properties for at least 15 years.
Don Tamaki, a San Francisco attorney
representing the properties' owner, Kintetsu Enterprises of America, said a
long-term ownership guarantee for the hotels "is very difficult to do
because the future of the industry is so volatile."
But he said 3D Investments is willing to
commit to a 15-year minimum ownership period on the mall property, which he
said is the most important.
"That's recognized as the icon of
Japantown," he said. He said he hopes to have that deal signed sometime
this month.
Tamaki said the price and other terms of
the hotels deal, signed Feb. 28, remain private. The sale will not become
final until a due diligence period expires, which he said typically happens
30 days after the signing.
San Francisco Mayor Gavin Newsom and
Supervisor Ross Mirkarimi, whose district includes Japantown, have been
outspoken in support of preserving the cultural identity of Japantown.
Newsom said Thursday that his office is drafting legal covenants to provide
"protections for the cultural identity of Japantown well into the
future."
"We would like to be good
partners," Newsom said. "But we clearly will be in an adversarial
position unless these covenants can be worked out."
Mirkarimi said he hopes the lack of a
minimum ownership period for the hotels is not an ominous sign, and he saw
hope in the tentative 15-year agreement on the mall property.
Hotel employees received termination
notices this week, but Tamaki said Thursday that the notices are required by
law and that "the great bulk of the employees will not lose their
jobs." Calls requesting comment from the family-owned 3D Investments
were not returned Thursday.
Two brothers from the company, Faraz and
Joseph Daneshgar, have met with Newsom, Mirkarimi and community leaders to
discuss the deal.
Kintetsu, headquartered in Osaka, has
owned the 218-room Miyako Hotel and 125-room Miyako Inn since they were
built, in 1968 and 1975 respectively.
The Daneshgar brothers promised to keep a
Japanese theme in the lobbies of the hotels but could not promise fidelity
to a Japanese menu at the Miyako Hotel restaurant, Tamaki and Maniwa said.
Maniwa said community fears about the
future of the hotels are fueled by the fate of Japantown Bowl, a popular
bowling alley and social gathering spot. Despite large community opposition,
Kintetsu sold it to a developer who razed it to build a five-story condo
building with retail businesses on the ground floor.
Regarding the new hotel ownership,
Tamaki said, "Their intentions are to hold it as long as they
can." - 2006 March 20 SAN
FRANCISCO CHRONICLE
Cultural center for sale
Five buildings in historic Japantown are on the block
A large portion of San Francisco's Japantown -- one of three remaining
in the United States -- is for sale, prompting concerns that the historic
district could lose its unique character.
Dating from just after the 1906 earthquake, Japantown is celebrating
its 100th anniversary this year amid worries that the once-bustling hub
for business and culture is declining.
Now, five key Japantown buildings -- two hotels, two malls and an
eight-screen movie theater -- are on the block, leaving residents and
merchants uncertain about the neighborhood's future.
"What we fear is if a new buyer comes in without any limitations
or controls, he could gut the whole thing and make it into just another
mall or another condo high-rise without paying any attention to the
character of what's there now," said Kaz Maniwa, chairman of the
Japanese Cultural and Community Center of Northern California and chairman
of the statewide California Japanese Community Leadership Council.
But Kintetsu Enterprises of America, the Osaka, Japan, company that is
selling the two hotels and two malls, said through a U.S. representative
that it wants to be sensitive to local concerns and has started holding
community meetings about the sale.
"Kintetsu understands its stewardship role in helping to preserve
the heritage of Japantown," said Don Tamaki, a San Francisco attorney
representing Kintetsu. "It's identified as an icon in the
community."
Kintetsu has controlled its Japantown properties since 1968, but a
lengthy downturn in the Japanese economy prompted it to put them up for
sale, Tamaki said. It is selling the 218-room Radisson Miyako Hotel and
the 125-room Best Western Miyako Inn, as well as the Miyako Mall and the
Kintetsu Mall. The two malls have a total of 80,000 square feet and house
40 tenants, mainly small Japanese shops and restaurants.
Tamaki said Kintetsu hopes to sign deals for the hotels this month and
the mall next month, and to close all the sales in June. He declined to
disclose the asking price. Kintetsu would actually be selling rights to
the buildings and airspace; the land is leased from San Francisco.
Theater must be sold
At the same time, AMC Entertainment, owner of the AMC Kabuki 8 Theater,
is being forced to sell to satisfy antitrust concerns about its merger
with Loews Cineplex. Tom Dresslar, a spokesman for California Attorney
General Bill Lockyer, said the new owner must continue to exhibit
first-run movies in the complex. The AMC Van Ness 14 is also for sale as
part of the antitrust requirement. AMC has until mid-April or 60 days
after it consummates the merger, whichever is later, to sell the two
properties.
One concern is that the Kintetsu properties could meet the same fate as
the Japantown Bowl, once a popular destination. Kintetsu, which owned that
property, sold it to a developer who razed it to build a five-story
condominium and retail building.
"Every sophisticated property owner with any sizable project in
San Francisco is looking at converting their properties to condos,"
said Seth Nodelman, senior director of retail services at commercial real
estate firm Cushman & Wakefield. "There's so much demand that
they're snapped up as soon as they're on the market."
However, he and others said that a condo project could still include
retail and office space. "It's a pretty desirable property,"
Nodelman said, noting that San Francisco has few malls.
Not a surprise
Linda Jofuku, executive director of the Japantown Task Force, a
nonprofit preservation group, said news of the sales didn't come as a
surprise.
"Kintetsu has been bleeding in the red for a long time now,"
she said. "As for AMC, it's been an absentee landlord for five or six
years since they moved their headquarters to Kansas City. There hasn't
been someone to speak with the Japantown community and deal with us face
to face to make decisions."
Jofuku noted that Japantown residents have already been through two
major dislocations in the past 65 years. First they were forcibly
relocated to internment camps during World War II. In the 1960s, the Geary
Boulevard corridor was a target for redevelopment in which about 1,500
residents and 60 small businesses were evicted for construction of the
eight-lane Geary Expressway.
Tak Matsuba, executive vice president of the Japantown Merchants
Association and owner of Bushi-Tei, a restaurant across the street from
one of the hotels being sold, said he is concerned about whether the mall
shops might be closed at length for major renovations. He is general
co-chair of this year's Cherry Blossom Festival, taking place in six
weeks. Because of Japantown's centennial, he said, the festival, which
includes a parade from Civic Center to Japantown, a street fair, music and
other events, is expected to be bigger than ever.
 
Small shops at risk
Japantown's malls, which also include the Kinokuniya Mall, which is not
for sale, are populated by mom-and-pop tenants, many of whom have been
there for 10, 15 or 20 years, Jofuku said. Business "has been slow
for a while," she said. "The bulk of the business occurs during
the weekend, when people come to church or the restaurants. We've been
trying to work with the Convention and Visitors Bureau to include us in
their marketing. When you look at the advertisements out there, you know
San Francisco has a Chinatown. A lot of people, even who live in San
Francisco, don't know it has a Japantown."
Stephen Jordan, co-owner of Sakura Sakura, which sells kimonos woven by
his wife's family in Japan, and a tenant in the Kintetsu Mall, said he's
known a sale was in the works for some time. "This is prime real
estate in San Francisco," he said. "It was a real concern in the
community that this place could lose its Japanese character." Another
fear, he said, "If people hear Japantown has been sold, they'll think
there is nothing here anymore."
Impact is magnified
Maniwa noted that Japantown's small size magnifies the impact of
Kintetsu's departure. Once as large as 20 or 30 square blocks, it is now
down to just four or five square blocks.
"In other communities like North Beach, Chinatown, the Castro, you
don't have a major landlord that owns almost half the whole
community," he said. "Let's say some big owner in Chinatown said
it's pulling out; the character of the community would remain the same
because you have so many owners and businesses."
San Francisco Supervisor Ross Mirkarimi, who represents District 5,
which includes Japantown, said he is looking at ways to make sure
Japantown's character is preserved. "This is incredibly alarming
because it raises questions about the whole future of Japantown," he
said. "That amid the fact that we're celebrating the centennial of
Japantown makes me want to do nothing else but erect a firewall around it
so it is protected."
Mirkarimi said he's looking at strategies such as designating a
landmark preservation site or a special-use district.
Tamaki said that Kintetsu would impose three conditions on the sale to
address community concerns:
- -- Disclose plans to the community before signing a purchase agreement;
- -- Try to find a buyer willing to work with the community and make a
commitment to the preservation of Japantown;
- -- Obtain a commitment to hold the property for the long term, not flip
it.
Developer mindful of area
"Usually when a seller of substantial property decides to sell,
the only issue is who's going to give the best price and it's no one
else's business," Tamaki said. "Kintetsu isn't taking that
approach."
The Japanese company wants to be sure that a potential buyer won't
"turn it into a Wal-Mart or a generic shopping center," he said.
Jofuku, Maniwa and others said they are hopeful that a new owner could
help revitalize the properties by renovating them and addressing some
structural issues.
"The community is not trying to stop a sale," Maniwa said.
"In fact, we would encourage a new buyer to come in and make
upgrades, make it a nicer place. We're not talking picket signs or
protests. We would just like to have this remain as part of our community.
We would love to see it as a major destination for tourists when they
visit San Francisco. If a buyer maintains the center, then certainly our
community could prosper from that." - 2006
Feb 10 SAN FRANCISCO Chronicle staff writer David Armstrong contributed to this report.
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