Augusta, Ga.-based Hull Property Group, doing business as Kingsport Mall LLC, has been taking steps to evict Frank Theatres from the Kingsport Town Center, also known as the Fort Henry Mall.
In court filings, Hull Property Group alleges Frank Theatres has breached its lease, was given notice to vacate the mall last October and hasn’t paid rent since March.
The filings note Franks was wired more than $1 million in 2013 for facility improvements, including the purchase of projectors, seats, a sound system and concession equipment. However, the delivery invoices for these improvements add up only to $717,000, the court filings state.
On the rent side, Hull Property Group says it is owed more than $328,000, noting that Franks has defaulted on a management agreement, which is based on net sales at the theater.
Hull Property Group acquired the 529,000-square-foot shopping center last June. The private real estate company says it has 40 years of experience specializing in retail real estate and a strong track record of acquiring and repositioning underperforming enclosed malls and shopping centers in small markets.
Kingsport Mall LLC issued a summons last month to three Franks entities — its parent and management companies, as well as Frank Theaters Kingsport — to Sullivan County General Sessions Court for a hearing held Wednesday.
Jim Hull, managing principal of the Hull Property Group, made the Times-News aware of the summons, but did not want to comment about the situation, which was discussed in court on Wednesday, but the case was continued to later this month.
Hull Property Group self-manages its entire retail portfolio and oversees the mall’s leasing, property management and marketing operations.
More than two years ago, the Kingsport Economic Development Board (KEDB) was offering an $800,000 incentive package to Frank Theatres if the company would bring an IMAX to the mall and meet certain other criteria.
Bruce Frank, president and CEO of Frank Entertainment, told the Times-News last February that the company’s plans regarding the IMAX and the expansion of the existing theater space were back on track. KEDB Chairman Bill Dudney indicated the incentive package could be redrafted.
Frank Theatres, based in Jupiter, Fla., had moved into the old Marquee Cinemas location at the Kingsport Town Center in the summer of 2013.
Marquee then considered building its own development off Stone Drive, but ended up constructing a 12-screen theater at The Pinnacle shopping center in Bristol, Tenn. The development has so-called “MXC” 71-foot screens with Dolby Atmos Sound with 54 channels, luxury electric recliners and digital projectors with 3D capability.
Opened in 1976, the mall has three anchor stores — Belk, Sears and JCPenney.
Established in 1977, Hull Property Group has a portfolio in excess of 12 million square feet across Georgia, Alabama, North and South Carolina, Florida, Tennessee, Texas, Virginia, Illinois and Indiana.
Frank Theatres currently owns and operates 20 theatres and 220 screens in New Jersey, Pennsylvania, West Virginia, Tennessee, North Carolina, South Carolina, Georgia, and Florida, according to its website.
Staff Writer Matthew Lane contributed to this report.