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Unanimous Vote OKs Movie Changes

Unanimously, the Falls Church City Council Tuesday night approved revisions to its economic incentive deal that will bring a first-rate movie complex into the Founders Row project at West Broad and N. West Streets.


The revisions were requested on behalf of the Paragon Theaters by Founders Row developer Mill Creek to ameliorate the blows dealt to that industry by the pandemic the last two years.


In fact, Mill Creek’s Joe Muffler told the Council, as it prepared to vote, that this Falls Church agreement will represent “the only new build theater lease finalized in the entire U.S. in 2022.”


It is being done in the face of “major headwinds” that continue to plague the industry, leading to the recent bankruptcy of Regal Cinemas, the second biggest theater company in the U.S.


Falls Church City Manager Wyatt Shields told the Council in his meeting with the corporate leaders of Paragon recently, he was “very impressed with Paragon’s thoughtful approach, avoiding the mistakes of others in the industry in dealing with the current adversity.”


It has been “almost 10 years that we have come through a very dark period,” noted Muffler.’


With benchmarks now set to finalize the lease this month and to hit design and construction deadlines, plans are now to have the complex open in time for the “Memorial Day blockbuster season” in May 2024,” Muffler said, although he held out hopes the opening could come earlier.


Falls Church Mayor David Tarter stressed that increased tax incentives offered to the company are for the purpose of bringing new economic development to the City that will allow for lower tax rates for residents as it has been estimated that revenues for up to $2 million a year in new net revenues to the City.


The new deal, while involving a tax incentive, does not take a dime from the existing tax base of the City, but only from the revenues generated by patrons of the theaters. “The tax incentives are paid for by the movie goers,” stressed Council member Debbie Shantz-Hiscott.


Bob Young, a local developer and head of the City’s Economic Development Authority, told the Council during the public petition period that the deal “is good for the citizens and good for the City government.”


The EDA has a hand in the complicated process by which the City collects the tax revenues and, through the EDA, gives back a portion to the theater company. Not only ticket sales revenues, but also meals tax revenues from food sales on site, including that which will come from an expanded amusement arcade that the Council also OK’d Tuesday.


The EDA recommended approval of the amendments to the deal, as did the City Planning staff. The Planning Commission failed to recommend approval, but also did not vote against, as the result of a deadlocked 3-3 vote.


Planning Commissioner Melissa Teates told the News-Press she had “concerns as the Planning Commission did not receive the financial documents detailing the effect of the revised tax money share in our packet.” But, she added, “the theater as an economic anchor is valuable.”
She added, “It really is a triumph to get a theater after Covid.”


Muffler told the Council that major first run movies will be shown at the complex, and an array of entertainment options will also be available to patrons including movie revivals and the arcade’s offerings. Paragon will operate a seven-screen movie theater, including an IMAX-similar screen with a total capacity of approximately 600 seats.


This is one less screen and approximately 150 fewer seats than previously agreed to in the voluntary concessions to the City. The plan is for Paragon to follow the multi-screen models it now operates in Delray Beach and Naples, Florida, Cary, North Carolina and Fredericksburg, Virginia.


Components of the revised deal approved this Tuesday lower the maximum number of theater seats down from 850 to 550, increase the number of occupancy permits for the apartments that will be held until the theater opens, from 16 to 36, adds to Mill Creek’s commitment for amenities in the courtyard of the project, and reiterates the $3.6 million that Mill Creek is holding in escrow for use only with the completion and opening of the theaters.


Muffler added that two-thirds of the retail space in the Founders Row project overall have been spoken for, and a grand opening for the retail component of the overall site will be held in about six weeks in advance of the holiday shopping season.


Three restaurants are getting ready to open in Founders Row now that will bring new retail dollars to the immediate site. In the build out for the theaters, Mill Creek has vowed to put more into the public plaza that is designed for the center of the 4.3 acre project, even as residents are beginning to move into the apartments including senior restricted ones.


The Elle Bird restaurant will also build out an outdoor space in the courtyard area