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The Boston Globe

Business

Assembly Square development gets 1st major tenant

AMC Theatres will open a 12-screen movie complex at Assembly Square in Somerville, becoming the first major retail tenant to commit to opening at the $1.5 billion development on the former industrial property.

Developer Federal Realty Investment Trust said yesterday that the theater will be located on the third floor of a large retail building that will also include several restaurants and shops. It will replace a Loews theater that shut down next door in 2007.

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The new operation will be all digital projection and offer a range of seating options, from box-style premium seats to power recliners. AMC may also incorporate an IMAX screen and bar service, according to Federal Realty. The developer said construction will start later this year, with the theater planned to open as early as the fall of 2013.

“It’s a whole new way of thinking about the movies,’’ said Don Briggs of Federal Realty, which is building a mixed-use neighborhood on the property called Assembly Row. “We think there is a pretty big hole in the market for a cinema of this size and scale.’’

When fully built, Assembly Row will have hundreds of apartments, office buildings, a hotel, outlet stores and restaurants, and a new transit station for the MBTA’s Orange Line. Mark McDonald, executive vice president of global development at AMC, described the theater as the “entertainment anchor’’ of the complex.

“The features and amenities we’re including will make this a compelling entertainment destination and among the best theatres in the country,’’ he said.

It is the only new theater AMC has committed to opening this year; and last year it opened only one new facility - the AMC Randhurst 12 in Chicago.

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The cinema at Assembly Row will be in the first wave of building on the 50-plus-acre property. Briggs said AvalonBay Communities Inc. will start construction in March on two apartment buildings, and he expects to announce several restaurant tenants around the same time. “Things are moving pretty fast on the retail front,’’ he said.

AMC’s theater will be among only a few new movie houses in Greater Boston over the past several years. Several theaters have closed, as movie attendance has continually decreased since 2002.

Last year, attendance declined 6 percent nationally, to about 1.25 billion, its lowest level in 15 years, according to Exhibitor Relations Co., a California entertainment research firm. Revenues at theaters declined about 4 percent, the firm said.

Jeff Bock, a box office analyst for Exhibitor Relations, said few new theaters are opening around the country. “If they are building new, they are really high-end operations,’’ he said. “They’re not so much for the average Joe, but for someone who is willing to drop $80 and wants dinner and a movie.’’

Briggs said the AMC theater in Somerville is meant to be part of a shopping and dining experience that will make the development a much more attractive destination than it was when the prior theater closed in 2007. “That old cinema sat in an environment that is nothing like what Assembly Row will be like in the future,’’ Briggs said. “By year’s end, we hope to have a whole host of retail announcements.’’

Casey Ross can be reached at cross@globe.com.

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