The Plaza Theatre, which will be torn down and replaced by a new, larger structure, now offers only five screens.
Scott Baldwin, vice president of operations for Eastern Federal Theatres, the company that owns the Plaza, and company representative Bill Wilson said they are planning the expansion to keep up with competition from theaters in Durham and other surrounding areas.
"We would like to keep our customer base in Chapel Hill," said Wilson, who, like Baldwin, graduated from UNC in the mid-1970s.
Wilson cited the Carmike Wynnsong theater near South Square Mall and a theater at the new South Point Mall in Durham as examples of cinemas that were luring moviegoers out of Chapel Hill.
The two entrepreneurs hope to modernize the Plaza Theatre into a state-of-the-art facility featuring stadium seating and digital sound.
Wilson and Baldwin also plan to double the number of screens, add high-back seats and expand the concession area.
As a former Tar Heel who worked at both the Plaza and Varsity theaters as a UNC student, Baldwin said he hopes students will take advantage of the new facility rather than venturing into Durham for a night at the movies.
"It's better to keep Chapel Hill people in Chapel Hill," he said.
Richard Gurlitz, chief architect for the project, said he estimates the project will be completed sometime between late 2003 and early 2004.