Cinema Operator Backs out of Fraser Centre Project; Theater 'Not Looking Good'

Expectations for a cinema at the planned Fraser Centre complex have hit the skids.

Florida-based Franks Theatres, which had agreed to operate a 10-screen cinema there, has pulled out of the project, organizers confirmed Wednesday.

Given the Franks decision, "I don't know if a theater will be part of the project or not," said Kim Lentz, marketing manager for York-based Susquehanna Real Estate.

Susquehanna is the lead developer behind the Fraser Centre project, to take shape on the 100 block of South Fraser Street in State College.

"We're really right now reviewing multiple options" in light of the Franks withdrawal, Lentz said. "The theater's not looking good."

She said Franks told Susquehanna of its decision Friday. The theater company determined that running the cinema facility would not be financially feasible now that Penn State has backed out of Fraser Centre, Lentz said.

The university had announced plans to use two floors of office space -- some 34,000 square feet -- at the expected complex. Penn State also had planned to rent cinema space there and use it as classroom space in non-evening hours.

But Penn State pulled out of Fraser Centre entirely in late December, calling it an economic decision.

The move knocked the Fraser Centre plans below the 80-percent-occupancy threshold. That's the point at which organizers can secure construction financing.

The proportion of committed space in the planned complex was unclear Wednesday, as the scope of the plans themselves appeared in flux. At one point, the cinema area was to have occupied nearly 83,000 square feet. The overall project had been designed originally to include some 200,000 square feet in all.

Lentz said the theater operator's departure "does not jeopardize the project as a whole.

"There will be Fraser Centre," she said. "It's just that it's going to be, obviously, timing and the make-up for the project are going to have to change."

A groundbreaking date for the project, already several years behind schedule in a rocky economy, has yet to be announced. It also was uncertain Wednesday how public support for the effort, which includes some specially targeted grant monies and tax-increment financing, could be affected by the Franks decision. (Those funds have been intended for public portions of Fraser Centre.)

Lentz said Suquehanna will review its options over the next couple weeks. Those options could include the pursuit of more commercial or retail space in the project plans, she said.

Susquehanna, meanwhile, is continuing to market the office space that was to have been occupied by Penn State. And "we do have two very exciting commercial, retail prospects we're talking to," Lentz added.

Conceived as a way to help the downtown economy and strengthen the borough tax base, Fraser Centre has seen support from the borough and other local taxing bodies, including the Centre County commissioners and the State College Area school board. The Downtown State College Improvement District has partnered with Susquehanna in the redevelopment effort, to include a mixture of upscale condominiums, retail space, offices and other commercial functions.

Dolores Taricani, who leads the improvement district's board, said the downtown group, the borough government and the Borough Council remain supportive of Fraser Centre.

"We're optimistic," she said Wednesday afternoon. "(The Franks decision) will make it harder, but we're optimistic. ... We really believe that this will go forward and may be better."

While the improvement-district leadership is disheartened over the cinema situation, Taricani said, it has faith in Susquehanna and its CEO, Jack Kay.

"Jack Kay and Susquehanna Real Estate are very committed to downtown State College," she said.

Earlier coverage

• New Commitments Critical for Fraser Centre; Erickson Comments after PSU Reversal (Dec. 21, 2011)