Alamo Drafthouse, H-E-B move to Lakeline Market

A movie theater company signed a lease in July to open its first theater in the space vacated by Alamo Drafthouse Cinema's Lake Creek location in the Lake Creek Festival retail center.

Nathan Searer, chief operating officer of the newly created corporation Southwest Theaters, which will operate the theater, moved to Austin to head up the opening of the value-based theater. It will open in the next one to two months.

"We looked at Houston and Fort Worth, but Austin seemed like a place we wanted to start our brand," he said.

Alamo Drafthouse's departure was one of two anchor tenants, the other being Stein Mart, that left Lake Creek Festival for the new Lakeline Market—a mixed-use retail center anchored by H-E-B Plus and Alamo Drafthouse. The center debuted in April at US 183 and Lakeline Boulevard next to the 18-year-old Lakeline Mall.

Bryan Dabbs, head of the retail service department at Stream Realty, which handles leasing for Lake Creek Festival, said the Northwest Austin market has faced some challenges lately. However, he sees turning around Alamo Drafthouse's former spot quickly as a positive sign.

"We think our ability to backfill the theater is very good for the [center]," he said.

Some of those challenges include the construction of Toll 183A and the flyovers connecting to SH 45 N, which Dabbs said changed traffic patterns. Growth in Cedar Park and new retail facilities have also made it difficult to find and keep tenants in the Northwest Austin market, he said.

The new movie theater will use all seven screens at the former Alamo Drafthouse location, and tickets will be priced around $2–$3. So far, Searer said the new movie theater is being well received by Lake Creek Festival's other tenants.

"We walked around to a few businesses, meeting with them," he said. "People seemed really excited."

Kelly Nguyen, owner of Q Vy Nails in Lake Creek Festival, said she lost a lot of walk-in clients after Alamo Drafthouse left and that business has been very slow. Upon learning the news of the movie theater's opening, she became delighted.

"That's really good news for every tenant here," she said, adding that she is hopeful the new theater will help increase her business.

Losing an anchor tenant

H-E-B had long anchored the Anderson Mill Center at Lake Creek Parkway and US 183. The grocery store occupied the center from 1976–82 before relocating to US 183 and RM 620 and then moving back in 1994 until its closure Nov. 8.

The return north has left an 82,200-square-foot vacancy, and H-E-B still retains a lease on the spot, said Adam Zimel, senior vice president of The Weitzman Group, which handles leasing for the center. Zimel would not disclose how much longer the grocery store has the lease. Next door is another large vacant spot left by the closing of Lack's Furniture. Despite these vacancies, Zimel remains positive on the future of the center.

"While there are vacancies in the submarket created by Lakeline Market, we see this as an opportunity for retailers to either enter the Austin market or relocate," he said. "The relocations will allow for improved positioning from either outside or within the submarket."

One business at the Anderson Mill Center, Wonko's Toys & Games, hasn't lost any business because it is a specialty store, said Denise Dow, who co-owns the business with her husband, Eric.

"We're such a destination business," she said. "People know where to come for specific items."

One of its neighbors, JAMRZ Cafe, has had to adapt to H-E-B's absence, owner Jake Ainsworth said. He and his wife, Marlene, have added a breakfast taco delivery route and offer catering to make up for lost sales.

"We haven't seen any tumbleweeds yet; what we cling to is customer loyalty," he said. "If they really like us, they'll come here, even if it is just for us."

A move that made sense

During a July 18 sneak peek of the new 10-screen theater—Alamo Drafthouse's largest venue nationwide—CEO Tim League said closing the Lake Creek theater and relocating made more sense than trying to renovate the existing space. Whether the move pays off has yet to be seen, he said, although he expects patrons to follow the theater chain to the new location.

Alamo Drafthouse opened the Lake Creek location in 2003 in a space built in the 1990s.

"We were reaching the end of our lease term, and instead of spending a huge amount of money to take it up to our current standards, it was actually more cost-effective for us to start from the ground up and get the space that we want," League said.

Stephanie Marks, along with her two business partners, opened Bettie Bangs Salon in February in Lake Creek Festival. She said having a discount movie theater in the retail center will be beneficial for all the families who live nearby.

"We were worried that it was going to be this big, empty spot," she said. "Alamo was a big draw for us. [The new lease] makes us feel like this shopping center is making it."

Additional reporting by Joe Lanane