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Plans for Citrus Heights Studio Movie Grill in limbo amid company bankruptcy

Construction has halted on a new Studio Movie Grill in Citrus Heights. // Mike Hazlip

Sentinel staff report–
Construction activity has now been dormant for more than half a year at the site of a long-expected new Studio Movie Grill on Auburn Boulevard.

A spokeswoman for the theater chain initially told The Sentinel in May that construction had halted “due to COVID-19 mitigation measures” and confirmed at the time that “we are still planning to open the Citrus Heights location.”

However, in September, news surfaced that the project was facing more than $4 million in mechanics’ liens for the site at 8501 Auburn Blvd., which was previously home to Kmart. The Sacramento Business Journal reported on Sept. 21 that CM Corp. had filed a mechanics lien against Studio Movie Grill for $4.5 million in April of this year.

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An attorney representing the contractor told The Journal: “They hadn’t paid us pre-Covid. Covid just made it worse.”

Then on Oct. 23, the Texas-based theater company announced it had filed for Chapter 11 bankruptcy protection.

“Today’s actions will allow us the opportunity to position Studio Movie Grill (SMG) for long-term stability as we recover from the unparalleled impact of COVID-19 and will give SMG the opportunity to reemerge for all of
our valued stakeholders,” said Brian Schultz, Founder/Chairman of Studio Movie Grill.

Asked whether residents could still expect Studio Movie Grill to open in Citrus Heights, spokeswoman Lynne McQuaker said “at this time” she could only refer to the company’s Oct. 23 news release.

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The announcement notes that “certain locations” will be closing, but does not specify what will happen to locations under construction. A list of theaters to be closed has not been released. The company said only that it “will be looking to work with landlords to restructure leases as it determines the portfolio of go-forward theaters.”

Related: Development activity continues in Citrus Heights despite COVID-19 setbacks

In an email to The Sentinel last week, city spokeswoman Nichole Baxter said staff “have not received notice from Studio Movie Grill that their project in Citrus Heights has been cancelled.” She said the city’s economic development team has reached out to the theater “to offer any assistance we can provide.”

Baxter said the city remains focused on revitalizing the Auburn Boulevard business corridor and said “efforts to attract new businesses and improve aging infrastructure will continue full steam ahead.”

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