The Squirrel Hill Theater, a fixture on Forward Avenue for more than seven decades, has closed, owner Richard Stern said Wednesday.

"It is with deep regret that I am faced with the decision to close the Squirrel Hill Theater," Mr. Stern, a third-generation theater operator, said in a statement Wednesday. "It is no longer an economically viable operation and we can no longer sustain the losses which we have experienced over the past two years."

He said the decision will have no effect on the nearby Manor Theater, which he also operates.

The loss of the landmark is a hit to a neighborhood that has taken several in the past year. Still the city's healthiest commercial area, Squirrel Hill lost its Barnes & Noble bookstore last year on the heels of Panera Bread's exit. It had already lost a few notable businesses by then, including Poli's Restaurant.

"We're very concerned that we have empty stores and now the Squirrel Hill theater is closing," said Ray Baum, president of the Squirrel Hill Urban Coalition. "Poli's is sitting empty" and the building once occupied by U.S. Professional Karate "is still mostly empty."

The theater's future was jeopardized by the closing of Poli's and a proposed real estate development that appears to be moribund. Principals with the R.E. Crawford development company could not be reached to confirm that the $50 million multi-use project has been scrapped, but neighborhood leaders say it is their understanding it has been.

The karate studio moved in 2008 in anticipation of Forward Square, a hotel-condo-restaurants and retail complex that would have displaced the theater, Pizza Amier, Tango Cafe and the Gay and Lesbian Community Center.

The Squirrel Hill Theater was located at 5824 Forward Ave., just off the Parkway. It's been a neighborhood landmark for about 74 years and has been expanded and remodeled.

Squirrel Hill resident Mark Abramowitz e-mailed the Post-Gazette to say he was heartbroken over the demise. "The theater might have been a dump, but it was our dump, and it was one of the last neighborhood theaters in the city."

He said he refuses to go to the AMC-Loews theater complex just across the Monongahela River in Homestead "where the tickets are overpriced and films are preceded by 20 minutes of commercials and previews."

Mr. Stern said that the Manor continues to be profitable. "It remains the premier specialized film venue in Pittsburgh. We will explore other alternatives and opportunities to fill the void in the market caused by closing the six screens at the Squirrel Hill Theater.

"We will do our best to offer employment to longtime employees by relocating them to the Manor."

A Post-Gazette survey of regional theaters in July 2000 noted that a mid-1990s renovation eliminated odd-shaped theaters that were in terrible shape and provided for a spacious, inviting lobby.

The story asked: "With the fancy new Loews Waterfront just two miles away, the Squirrel Hill may have to adapt to survive. Could there be more art films in this theater's future?"

There were, along with mainstream movies, but they couldn't keep the theater open.

Not only did the AMC-Loews at the Waterfront offer competition but, in September 2004, the SouthSide Works Cinema opened. Many moviegoers have become accustomed to stadium seating, IMAX screens and 3-D projection, which the Squirrel Hill lacked.

Art house theaters may attract patrons but blockbuster family films generate pricey visits to the concession counter and repeat viewings.

The record-setting snowfall has not been kind to most businesses, and while "Avatar" set worldwide and domestic box-office records, moviegoers also have become accustomed to plucking films from on-demand menus at home or renting them for a buck from vending machines in supermarkets.

Mr. Stern is no cinematic carpet-bagger, which might explain why he preferred to release a statement rather than answer questions by phone.

His grandfather, Norbert Stern, opened the South Park Drive-In, one of the first in the country. His father, Ernest, ran it and his mother, Regina, was a cashier in the summer, and they later operated the successful Associated and Cinemette Theatre chains.

And now the operation is down to a single theater.

Mr. Baum said the neighborhood coalition "needs to work with the business district to make sure that we're all ensuring its vitality."

"I think its a strong neighborhood. I think it is basically healthy," he said. "Businesses have a finite life cycle. There's always going to be turnover."

Its next loss will be Copacetic Comics. Owner Bill Boichel, who has been operating the comic book store for nine years on Asbury Place, is joining friends in a venture to fill a renovated building on Dobson Street in Polish Hill with a coffee shop, a vinyl record store and the comic book store.

"I've outgrown my space" in Squirrel Hill, he said. "I was considering moving somewhere else in Squirrel Hill, but I like the idea of doing something new with a group of friends."

Mr. Baum said a problem for all businesses in the neighborhood, parking, could have been solved when the Rite Aid was built on Murray.

"The original plan was to have parking under it," he said. "That plan was not followed, but it would have improved the neighborhood greatly."

Catherine Lanni, a 30-year resident of the neighborhood, said she gave up shopping in Squirrel Hill years ago because of the lack of street parking. She cited the use of side streets by many commuters who catch buses Downtown and take up spaces all day.

"Why would anyone subject themselves to that kind of shopping experience," she said, "when, for a short drive, one can park in an expansive and free lot at the Waterfront or Waterworks malls?"

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