Pacific Theatres opens its doors to major expansion; cinema chain maps program for nationwide network.

Pacific Theatres Corp. is going on the offensive, looking to build cinemas and acquire theater chains that would give the Los Angeles-based privately held exhibitor a national presence, according to President Jerry Forman.

In late January, Pacific announced a partnership with Reading Cinemas Inc., a new subsidiary of the Reading (railroad) Co. based in Philadelphia. The partnership will provide Pacific with at least at $100 million war chest to construct new cinemas in California and Hawaii to be operated by Pacific Theatres.

Additional funding will be provided for expanding into new geographical areas and for acquisitions, according to Forman. Pacific is the 15th largest exhibitor in the U.S. with 300 screens in California and Hawaii.

The company is currently negotiating to build several major multiplexes, including three in Los Angeles County, and is also in the preliminary stages of acquisition, negotiating with several family-owned theater chains, according to Forman. He did not provide specifics on the negotiations.

He predicted Pacific will double its screens over the next five years. In the future, the company will go anywhere in the U.S. where "the opportunity presents itself," Forman said.

Local moviegoers are also being eyed as part of the expansion.

Pacific is a major player in the county, with 82 screens that range from the ornate El Capitan and Cinerama Dome theaters in Hollywood to less spiffy drive-ins in Compton and Pico Rivera. Pacific and Walt Disney Co. combined resources to rehabilitate the El Capitan Theatre, where Pacific invested more than $6 million four years ago. Much of the firm's Los Angeles County volume comes out the San Fernando Valley and the Lakewood area in the South Bay.

Forman said he hopes to tack on about 100 new screens in Los Angeles County in the near future. The company is close to completing a deal for a huge multiplex that could have as many as 20 screens in the Manhattan Beach/El Segundo area, Forman said. East Los Angeles is another potential place for a large multiplex, he said.

Pacific is attempting to buck the two-decade-old industry trend of consolidation in which large national theater chains, often owned by the major movie studios, are buying up family-owned regional theater circuits.

Forman said Pacific is ready to negotiate to buy the circuits that are owned by major industry players such as MCA Inc., which has a major stake in Cineplex Odeon Theatres and Sony Inc. which has a major stake in Lowes Theatres. The company would also not be adverse to combining with a major studio but only if it could maintain its own logo and operate autonomously, Forman said. "As a family-owned regional company, we are a fish trying to go upstream," Forman said. "The trend has been for the larger publicly owned companies to buy up the smaller firms, but we feel we can't be static and to enhance our business we must grow. With this new joint venture, we are at an important crossroads." Historically, Pacific has been both a national and an international player in the exhibition business.

William Forman, Pacific's founder, ran the company for 40 years and owned theaters in New York and in Europe as well as in California. After his death in 1981, the company was scaled back and focused on California and Hawaii by Pacific's CEO, Michael Forman, President Jerry Forman's cousin.

The Formans are getting ready for the next generation of family leadership that will be headed by 32-year-old Christopher Forman, Michael's son. Christopher Forman now heads Pacific's real estate division that owns 50 commercial properties in California and Hawaii.

The real estate division has been converting land that formerly was used for drive-in theaters into mini-business parks and for mini-storage facilities where people rent space to store their belongings.

The Reading arrangement provides capital for Pacific to expand its theaters while allowing the company to pursue its real estate ventures with its own internally generated financing, Jerry Forman said. He added that the company has been profitable with annual revenues in excess of $100 million but didn't provide specific financial information.