Bank forecloses on Warren Theatre
Arvest plans to see property through Sheriff’s Sale next month
By Jeff Harrison
Midwest City Beacon
The Midwest City Warren Theatre has been foreclosed on and the future of the cinema complex is still unclear.
The foreclosure lawsuit filed by Arvest Bank against MWC Warren Theatre, Inc. seeking more than $16 million was filed in August.
The lawsuit alleged that MWC Warren Theatre took out a $14 million mortgage for construction of the theatre and a $3.5 million loan for equipment in February 2019 and has failed to make payments since May.
Oklahoma County District Judge Aletia Haynes-Timmons ruled in favor of Arvest Bank during a hearing on Jan. 22.
The judge agreed with Arvest Bank’s request for payment of the loans as well as possession of the theatre property. The bank is permitted to sell the property directly or through the Oklahoma County Sheriff’s Office.
Midwest City officials believe the theatre will be showing movies again in the near future.
“We are very confident 5905 SE 15th St. (Warren Theatre) will reopen as the fabulous movie theatre we all came to love,” said Robert Coleman, economic development director for Midwest City. “The equipment is state of the art, and the building itself is the newest of its kind in Oklahoma. It seems farfetched to think anyone with other intentions would be interested in purchasing the building.”
Coleman expects the theatre property as well as three parcels along SE 15th St. will go to a Sheriff’s sale before the end of March.
“We expect a judge to confirm the sale at a hearing two or three weeks later, which would put the property in the hands of the new owners perhaps as early as April 2021,” Coleman said.
Arvest Bank officials agree with Coleman’s assessment and issued the following statement.
“There is significant interest in this property. The theatre is brand-new, has state-of-the-art equipment and is in the middle of an exciting entertainment district,” the statement read.
Arvest Bank was granted a judgment of $12,899,163.52 for the principal of the mortgage, plus $857,731.02 in interest accrued through Jan. 14. Interest will accrue at a rate of $3,830.33 per day after Jan. 14.
Arvest Equipment Finance received judgement of $3,378,644.27 for the principal of the equipment loan, plus $253,961.43 in accrued interest through Jan. 14. The interest rate will continue to accumulate at a daily rate of $1,013.59.
MWC Warren must also pay Arvest’s attorney’s fees and costs of collection.
Key Construction, the general contractor for the project, says it is owed $1.06 million for unpaid labor and materials related to construction. The company originally filed the lien for $1,231,151.89 on Jan. 13 and revised it on Feb. 24 to the current amount of $1,062,622.12.
Other subcontractors have also filed liens against Warren, totaling more than $176,000.
Key Construction sued Warren for breach of contract in Oklahoma County District Court on Aug. 25, one day before Arvest filed its foreclosure request. The company is seeking payment of $1,062,622.12 which it says is the “reasonable value of such work.”
According to the court ruling, Arvest’s liens take priority over Key and others, except for unpaid property taxes and assessments owed to Oklahoma County.
Midwest City Warren Theatre opened for business Aug. 23, 2019. It was open for about 7 months before closing in March due to COVID-19.
The Warren Theatre is the centerpiece of the Sooner Rose Shopping Center development near SE 15th St. and Sooner Rd. The development includes retail, restaurants, and an indoor entertainment complex. The 10-screen theatre features a new concept that owner Bill Warren described as “smaller but more luxurious” than others he’s built.
Midwest City invested heavily in development of the commercial district, especially the Warren Theatre. The Midwest City Memorial Hospital Authority, a public trust, contributed about $6 million in land and $5 million in cash for development of the movie theatre.
At the time, Warren operated theaters in Moore and Broken Arrow as well as Kansas and Missouri. The company later sold all of its other theaters, except the Midwest City location.
The city created a Tax Incremental Finance or TIF District for property around the shopping center. Sales and use taxes generated within the geographical area will be used to pay back loans for purchasing land and improvements.
Construction of the theatre began in early 2018 and was originally slated to be complete by Christmas. Crews ran into several issues with the site early in the process. The city had relocated utility lines that ran through the property and removed several old underground fuel tanks.
The scheduled opening was pushed back until May 2019 and later July before it finally opened on Aug. 23, 2019.
Coleman remains optimistic about the future of the movie theatre and entire Sooner Rose Shopping Center. The commercial area has seen several new restaurants open in the past year with more on the way.
“There is so much pent-up demand due to the pandemic, and we feel the need for families to get out of the house will pay huge dividends for the entertainment operators who are ready to go this summer,” he said.
He does not believe the city will play a role in attracting a new tenant for the theatre.
“City personnel invested a lot of time in bringing this project to fruition, and the Midwest City Memorial Hospital Authority invested a lot money in it,” he said. “It is difficult to see a situation where we would commit additional resources as we would prefer the private sector take it from here.”
Attempts to reach attorneys for Warren Theatre were unsuccessful.
Sad that this had to happen bad timing during a bad situation as stand down orders were released to the public to reframe from public interaction. There is rumor AMC was interested in a purchase of the property, but that remains to be seen. . I am sure Midwest City will be looking for a buyer as they are losing valuable tax revenues.
“There is rumor AMC was interested in a purchase of the property” AMC just took out a huge loan against preferred stock just to stay afloat for 6 more months. They are in no position to take on more debt without impacting confidence in their shareholders, like me, if they are already borrowing for monthly expenditures. If we are facing another lockdown it’s going to hurt theaters even more. The best thing that could happen has happened. The bank took possession of the collateral and will secure the property until they can reconcile or sign new terms with Warren and if that is not possible then they reserve the right to seek a new Tenant/Owner. Best case for the community, Warren can come to the table after Covid and work out new terms. Best case for Arvest, sell off this debt as quick as possible. I’m not invested in Arvest so in this case I’m rooting for the community.
I’ll be shocked if it’s not a bidding war among theater companies
AMC cashed out $350,000,000 of their own stock in the Robinhood deal. So they got a niece boost from that. Not only that, equity company Silver Lake held $600,000,000 of AMC debt service. Silver Lake executed a stock sale and wiped the debt out. How often does that happen?
I hope the Warren Theatre in Moore gets torn down and I’d also like to see what use to be in that spot before Warren Theatre was built.
There was nothing there, it was vacant land with interstate frontage from hospital to walmart. Prime commercial opportunity.