As part of a broader plan for the remodeling of Union Station, the Union Station 9 movie theater closed earlier this month and is being cleared out in preparation for potential new tenants.

The nine-theater cineplex couldn’t compete with newer theaters that opened earlier this decade in Chinatown and Georgetown, so Union Station Investco, which has operated leases in the building since the beginning of 2007, terminated the lease of Phoenix Adlabs Theatre Management in what it said was a mutual agreement.

“The theater itself wasn’t really making money,— said Joe Press, asset manager for Union Station Investco. “It wasn’t succeeding. People didn’t know it was there.—

The entertainment venue owed its existence to the Union Station Redevelopment Act, which President Ronald Reagan signed into law in 1981. It opened in 1988 with a vintage feel, featuring individual theaters named after older movie theaters in the District, including the Palace, Orpheum and Roxy.

In 1996, the National Community Church began holding services in one of the theaters on Sunday mornings, climaxing with three services every Sunday. In late 2006, Phoenix revamped the theater, putting in cushioned seats and new carpeting.

Yet keeping the theater open remained a struggle, and rumors persisted over the last couple of years that it would close. The theater was seen as a symbol in the divide between economic classes in Washington. Following the closure of several small neighborhood theaters in recent years, it was one of the few places left near Capitol Hill to see movies.

Demolition of the site has already begun, and after it has been cleared out, USI will analyze the space for new tenants. Press was reluctant to name any specific goals for the space this early in the process.

“We have two or three good ideas we’re working on simultaneously,— he said, adding that they’re not considering more theaters.

Replacing the theater is part of the broader plan for a remodeled Union Station, according to D.C. Del. Eleanor Holmes Norton (D). She has chaired Transportation and Infrastructure subcommittee hearings on the station’s redevelopment.

“The theater is only a very small part of what’s been closed down,— she said.

The existing Union Station is expected to make way for a more modern transportation hub with extra room for buses on the side of the building along H Street Northeast and more space inside for waiting travelers. USI hopes to bring in new tenants and enhance Columbus Plaza in front of the station. It has retained local historically focused firm Martinez & Johnson Architecture to work on the property. Plans are also in the works for Burnham Place, a mixed-use development over the Amtrak rail that would include housing.

In July, Barry Lustig of Ashkenazy Acquisition Corp., which operates USI, told Norton’s subcommittee that three factors are crucial: “The success of Union Station as an intermodal transportation facility is based on a careful and strategic balance of (1) budgeting for the ever growing costs of maintaining, securing and operating the century old National Landmark, (2) preserving the crucial tenant mix at Union Station and (3) the costs to improve Union Station as an intermodal transportation facility,— his testimony read.