April 14, 2005 - Mayor Bill Haslam announced today a movie theater in downtown
Knoxville is a go under a new design that preserves most of the
buildings within the 500 block of Gay Street, including the S&W
Regal Entertainment Group's eight-screen theater will be built
to the north and behind the S&W. An escalator and elevator will
be built within the former Walgreen's building to bring patrons
from the State Street parking garage to Gay Street.
"This solution is the result of the collaborative approach
the City of Knoxville undertook with Knox Heritage and contains
several features that make for an even better project," Mayor
Haslam said. "Not only does this new design preserve the S&W
and other buildings, this approach creates pedestrian access from
the State Street garage that will benefit all of Gay Street and
Mayor Haslam in January allocated $10,000 in City funds to Knox
Heritage to match $10,000 in private donations to explore ways to
close a $3 million gap that existed between new construction and
announcement is the result of Mayor Haslam engaging us to come up
with a plan to save the buildings within the City's budget and build
a theater that meets Regal's needs," said Finbarr Saunders, president
of Knox Heritage. "This has been a great effort that produced a
Greg Dunn, President and Chief Operating Officer of Regal Entertainment
Group, said, "We look forward to doing business in a newly energized
downtown Knoxville. It has been a pleasure to work with the Mayor's
Office to reach a solution that satisfies all parties. The theatre
and retail space will compliment each other and be a benefit to
the community for many years to come."
Mayor Haslam recognized local architect and Knox Heritage member
Faris Eid for contributing his time and talents in designing the
new plan. "He deserves a lot of credit for making this happen,"
the Mayor said.
The City of Knoxville will issue a request for proposals in early
May for the development of certain buildings in the 500 block of
Gay Street, including the building that previously housed the S&W
Cafeteria, with the condition that the developers preserve the buildings.
The buildings could be developed for retail, office and residential
The budget for the movie theater project includes a $3 million
contribution from the City's Industrial Development Board; $2.5
million from Regal Entertainment Group in furniture, fixture and
equipment; with the balance of funding to come from third-party
investors. The Industrial Development Board will lease the facility
to Regal Entertainment. Those lease payments, in turn, will retire
the debt financed by third-party investors.
The City earmarked $2 million for the project in its budget for
fiscal year 2004-2005, and will allocate another $1 million in the
Construction will begin this fall and is expected to take a year.
Mayor Haslam believes the movie theater is a strategic investment
in downtown that will encourage retailers, including a regional
store operator who has already shown strong interest, and restaurants
to commit to downtown locations. That, in turn, will enable the
City to recapture sales tax revenues generated downtown that would
otherwise have gone to the state and apply that money to repaying
the debt associated with the Knoxville Convention Center.
Developing a movie theater in the 500 block of Gay Street is a
cornerstone of the Kinsey Probasco plan for Market Square, which
was adopted by City Council in 2002 after an extensive public participation
Regal Entertainment Group (NYSE: RGC) is the largest motion picture
exhibitor in the world. The Company's theatre circuit, comprising
Regal Cinemas, United Artists Theatres and Edwards Theatres, operates
6,273 screens in 558 locations in 40 states. Regal operates approximately
18 percent of all indoor screens in the United States including
theatres in 43 of the top 50 U.S. markets and growing suburban areas.
Additional information is available on the company's web site at