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PORTLAND-Robert Redford’s new-concept Sundance theater chain is preparing to close up shop this week following its inability to secure new financing in the wake of industry-wide troubles that forced its money partner General Cinemas Theaters to file for bankruptcy protection last month. The situation, caused by a boom in nationwide screen counts, forced other movie thater chains to file for bankruptcy protection earlier this year, and now reportedly has the industry giant Regal Cinemas doing the same.

“The industry is sort of in a tailspin, and we are caught in the middle,” a Sundance company source tells GlobeSt.com, confirming that his company has laid off about a dozen Los Angeles-based employees and is not reviving existing projects in Portland or elsewhere, as reported in yesterday’s issue of the entertainment industry trade publication Variety. “General Cinemas was the majority financing party in the Sundance Cinema projects, so now we have a situation where the folks who were paying the bills aren’t able to pay the bills anymore,” says the source. “We’ve been trying for the last month to find a way to proceed and, unfortunately, have not, so we are essentially in a wind-down situation.”

Meanwhile, the Portland project, the would-be crowning achievement to The Rouse Co.’s latest Pioneer Place development in the heart of Downtown, sits about half completed. The 30,000-sf facility at the top of the new shopping mall was to have seven movie screens, an organic-foods restaurant, a microbrew-and-wine bar, an art gallery, live performance programming and retail space. Despite the news of its imminent demise, Laurence Brocato, commercial development manager for Maryland-based Rouse, remains optimistic about its chances for seeing Sundance complete its project, and says the company is not yet seeking another tenant.

“Yes, the General Cinemas’ situation has caused them great concern and difficulty, and Sundance has been searching hard for a new financial partner and has not found one yet, but I believe they are continuing to look,” Brocato tells GlobeSt.com. “So as far as the deal being dead, we have an executed lease and we have had conversations as recently as this week, so I don’t think the deal is dead.” Beyond that, says Brocato, the new mall is doing well. “The theater would be the cherry on the cake, but we still feel very good,” he says. “We still have two retail spots that we are leasing and we have some great prospects, so things look great.”

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