CITRUS HEIGHTS, CA (MPG) - Many businesses locally and across the nation are struggling due to the COVID-19 pandemic and associated public safety closures. The pandemic has even delayed the opening of the highly anticipated Studio Movie Grill location in Citrus Heights.

The Texas-based company started in 1993, offering new movie screenings with full-service, in-theater dining. Studio Movie Grill expanded to 33 locations across 10 states. The Citrus Heights location will be the eighth in California and the second in the Sacramento region—joining the Rocklin location, which opened in 2014.

Construction was underway in Citrus Heights at the 8501 Auburn Blvd. location, and the 49,000-square-foot theater—featuring 12 screens and 1,252 luxury recliners—was scheduled to open in summer 2020.

But with the sudden downturn in company profits caused by the pandemic, progress halted on the Citrus Heights project. The location is locked behind construction fencing as the company faces mechanics’ liens and court actions.

According to lien documents recorded by the Sacramento County Clerk’s Office, since April 2020, there have been 26 mechanics’ liens filed against Studio Movie Grill’s Citrus Heights location—totaling $6,897,820.83 unpaid to contractors and sub-contractors that have worked on the project. The filing of a lien is the first step toward a legal action seeking a court-ordered foreclosure sale of the property.

The largest lien amount is claimed by the project’s general contractor, Construct & Maintain Corp. (CM Corp.), at $4,489,111.21. Nine subcontractors hired by CM Corp. have also filed liens on the property for lack of payment, including $640,275.40 by Juan Torres Construction Inc.

Lien documents show that Sacramento County’s Department of Finance (Consolidated Utilities Billing and Service) has even filed a utility lien against the property for “nonpayment of utility services” at $1,912.80.

While many of the mechanics’ liens now have pending actions in the court, two of the liens have been officially released. Papé Material Handling, which claimed $2,559.05, and C. R. Laurence Co. Inc., which claimed $8,552.58, both filed documents stating the lien amounts had been paid.

In an emailed response to this MPG reporter on October 19, Lynne McQuaker, Senior Director of Public Relations and Outreach for Studio Movie Grill, stated, “The Citrus Heights project delays are entirely caused by COVID-19, which everyone knows has had a devastating impact on the theater and restaurant industry since March of 2020.  We are working closely with our general contractor and subs and other partners—whose patience, understanding and support we deeply appreciate—to restart the project as soon as circumstances allow.”

Studio Movie Grill (SMG) Chairman Brian Schultz released a statement on the company’s website on October 23, announcing that the company had filed a “voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code.”  Schultz wrote that the company had reached an agreement with its lenders for financial support during the restructuring process and terms had been set for “a plan that will provide a sustainable path forward.”

Schultz continued: “We plan to use this filing to strengthen our business by reducing liabilities and reposition SMG to emerge a stronger organization built for the future as we recover from the unparalleled impact of COVID-19. We intend to move through the process as quickly as possible.”

He assured the public that Studio Movie Grill remains “committed to continuing to provide exceptional and safe guest experiences for the communities we serve. … Film and all creative arts are an integral and powerful part of the joy of the human experience, a way for us to better understand the lives of those around us and to come together, which we cannot afford to lose.”

The City of Citrus Heights has increased efforts to support local businesses during the pandemic while maintaining focus on attracting new businesses and revitalizing the Auburn Blvd. corridor. Meghan Huber, Economic Development and Communications Manager for the City of Citrus Heights, said, “City staff have not received notice from Studio Movie Grill that their project in Citrus Heights has been cancelled. Our Economic Development team has reached out to SMG to offer any assistance we can provide.”