We always figured that the former AMC Van Ness movie theater went under because of how the pandemic wrecked movie theaters. But court filings show a behind-the-scenes battle after new operators managed to burn $54 million on the place in a year and a half.Many San Franciscans did not even realize th at the old AMC movie theater at 1000 Van Ness Avenue had turned into a different movie theater called 1000 Van Ness CGV Cinemas until the place closed permanently in early 2023. But the Korean theater chain CGV actually took over the lease in 2019, hoping to turn it into a modern “4D” cinema with moving seats. And the theater’s closure just seemed like another tale of a movie house that couldn't hack the financial setbacks of COVID-19.But Variety has the real story of how the CGV Cinema at 1000 Van Ness went under, and it’s a story that the local media missed. This may be because the principal player CGV, part of a Korean conglomerate company CJ Group, which also produced the hit Korean movie Parasite and owns the food brand Bibigo, operated in obsessive secrecy as it burned through $54 million on the place in just 18 months First, the company reportedly spent about $15 million renovating the venue and adding those “synchronized motion seats.” Nothing wrong with that, though any business on Van Ness could have told you that the endless Van Ness BRT construction meant any serious revenue flow was still years away, and that that the Tenderloin-adjacent neighborhood was not exactly enjoying a socioeconomic heyday. And like most movie theater chains, CGV was losing money and having trouble paying rent during the pandemic. Though unlike most theaters, CGV could not negotiate for lower rent, because they’d signed a $75.2 million guarantee to the real estate trust that owned the building. So to get out of that defaulted lease, CVG ended up secretly buying the building just to keep it out of the newspapers that they were behind on rent. At the time, the Korean owners CJ Group were closing in on a $700 million venture capital round, and were keen to avoid “bad optics.”So they spent $28 million to buy the building, but then flipped it to a local investor, just to keep their name out of the deal. Again, the optics of defaulting and then giving away a building were considered to be jeopardizing the $700 million in VC money, so they just took a bath on the $28 million.“The CGV Parties wanted to avoid the adverse publicity which would arise if it became known that they owned property in an American city in decline like San Francisco,” the arbitrator in a subsequent lawsuit Bruce Isaacs wrote in court filings. “And, ironically, the CGV Parties wanted to avoid the adverse publicity which would arise if it ever became known that they gave away a valuable piece of commercial property in San Francisco essentially for free.”That court case was CGV’s lawsuit against their bankruptcy firm Pachulski, Stang, Ziehl & Jones, who brokered the sale. CGV refused to pay them because they lost so much money, the firm argues they did the work and are owed their $10.7 million in legal fees. The firm won that suit, though CGV is vowing to appeal. Meanwhile, the 1000 Van Ness building is largely empty and available for lease, with the leasing agent touting it as an “opportunity to lease a variety of retail, entertainment, and creative space in a landmark building anchored by a 14-screen cinema.”Related: Former AMC Van Ness To Become '4D' Cinema From Korean Company [SFist]Image: Google Street View ...read more read less