CinemaStar Announces Chula Vista Expansion; Eight Stadium Seat Auditoriums Will Be Added to Existing Ten-Plex.

SAN DIEGO--(BUSINESS WIRE)--Oct. 8, 1998--CinemaStar Luxury Theaters Inc. (NASDAQ:LUXY) which owns and operates eight first run motion picture theaters in southern California (seven theaters with 69 screens) and Tijuana, Mexico (one theater with 10 screens), announced today that it has entered into a preliminary Letter of Intent with General Growth Properties Inc. to expand its existing Chula Vista multiplex into an 18 screen Ultraplex entertainment center.

The new megaplex expansion is intended to solidify CinemaStar's position as the premiere theater operator in Chula Vista. The existing ten-plex will be expanded by eight screens comprising approximately 40,000 square feet. The expansion will feature a spectacular two-level lobby with additional concession and video entertainment areas, all accessed via "Escalators to the Stars."

"Chula Vista Center is the foremost shopping center in the area and this expansion will enable us to further satisfy the strong demand for filmed entertainment at this popular location," said Jack R. Crosby, chairman and chief executive officer of CinemaStar.

Frank Moreno, president and chief operating officer, elaborated on the new entertainment center, "We are dedicated to providing our patrons with a premium moviegoing experience, and this expansion will set the standard for quality in this market. We will feature luxury stadium seating, digital sound and state-of-the-art projection equipment. Our new lobby and concession area will feature a video arcade and decor that will give our customers the hollywood experience they have come to expect from CinemaStar."

Crosby concluded, "We are very optimistic about the future of CinemaStar. Operations have improved, new management is in place, and we are actively negotiating lease and construction agreements on several exciting new theaters under consideration. Our goal is to capitalize on positive demographic trends through the development of new megaplex theater complexes in underserved markets. The Chula Vista expansion represents a positive step towards the fulfillment of this goal."

CinemaStar theaters feature high-quality projection and sound capabilities, including LucasFilm THX Stereo Surround Sound environment systems, along with luxury amenities such as high-back reclining seats and extra-wide aisles between seat rows. Further information may be obtained from the Company's Web site: http://www.cinemastar.com.

The information contained in this press release contains certain forward-looking statements that involve risk and uncertainties, such as the statements of the Company's plan, objectives, expectations and intentions. The Company's actual results could differ materially from those indicated by such statements as a result of various factors, including those discussed in the Company's Form 10-KSB and Form 10-QSB on file with the SEC.