Metropolitan Theatres Declares Bankruptcy

As if downtown doesn’t have enough problems already, this past week Metropolitan Theatres announced that it was declaring bankruptcy, Chapter 11 style, in order to reorganize its costs, debts, and liabilities and to essentially rewrite its leases with its landlords to reduce what the theater chain pays in rent. 

The bankruptcy affects 16 of the theaters that Metro — based out of Los Angeles — owns and operates throughout the western United States. Of those, seven are located in Santa Barbara. The bankruptcy filing does not, however, apply to the Arlington Theatre, Santa Barbara’s defining movie palace, which the company owns outright. Nor does it affect the Metro 4 on the 600 block of State Street, which the company also owns. 

The bankruptcy action will, however, cast a significant shadow over all the other Metropolitan holdings, the Paseo Nuevo, the Fiesta Five, the Fairview, the Hitchcock, and the Camino Real theaters, all of which the company leases. (The Riviera is the only non-Metropolitan movie theater in town.)

Metropolitan Theatres dates back 100 years in Southern California, but did not establish a beachhead in Santa Barbara until the 1950s; that later expanded to a near-monopoly, with the flickering exception of the Victoria Street Theater — now the site of the Ensemble Theatre’s New Vic — and the Riviera. 

The industry has never fully recovered from the COVID shutdown, explained company executive David Corwin, the fourth generation of Corwins to own and manage the chain. “Last year, we did 20 percent better than we did in 2022, but that was still 20 percent less than we did in 2019,” Corwin said. 

Then there were the writers’ and screen actors’ strikes, and movies that were slated for release in 2024 got pushed back to 2025. Streaming services like Netflix took their toll as well, as former movie patrons stayed home by the droves. Costs continued to go up as revenues went down. 

Corwin said the company will avail itself of the flexibility afforded under Subchapter Five of bankruptcy law to work out new arrangements with the landlords from which the company leases. “Each property is in a different situation,” he said. “Ideally we can arrive at understandings that not only allow us to stay but to make new improvements.” 

Corwin said the company had hatched plans to make improvements to the Paseo Nuevo — no plans have been submitted yet — and for the Camino Real, for which plans have already been submitted. As for the Arlington, built in 1931, it will not be affected. 

“The Arlington is in a special category,” Corwin explained. “We own that. We have complete control over the Arlington. There will be no impact.”

While movies no longer hold the magnetic attraction they used to in bringing people downtown — for both Santa Barbara and Goleta — they do generate activity. The bankruptcy was filed at a time when State Street is struggling to establish a new identity, downtown property owners are being asked to tax themselves to the tune of $2 million a year to inject new vitality to the retail core, and the Paseo Nuevo shopping mall could soon be scrapped to make way for 500 units of new rental housing, up to seven stories tall.