By 1973, film distribution had developed so significantly that theatre ownership was no longer necessary for the major motion picture companies to thrive. The Manos Theatre was sold to Cinemette Theatres, Inc. of Pittsburgh, PA. New suburban multiplex theatres, however, posed a threat, and business at the Manos Theatre suffered. The theatre closed as the company opened Cinemas IV at Westmoreland Mall, and Cinemette sold the Manos in 1977 to local businessman Carl V. Marinelli and his business partner Adelaide DelVitto, and the venue was renamed The Palace Theatre. A year later, Mrs. DelVitto sold her interest in the theatre back to Mr. Marinelli.
Mr. Marinelli scheduled movies and live performances and boasted such talent as the up-and-coming Gloria Estefan & The Miami Sound Machine, Ricky Nelson, Mel Tillis, Tammy Wynette, Dr. Hook, and Chubby Checker. In the late 1980s, Mr. Marinelli considered selling the theatre to an out-of-state businessman who wanted to raze it. A group of culturally minded activists rallied to save the theatre. Before arrangements were made, Mr. Marinelli passed away. City leaders, with the assistance of the Greensburg Area Cultural Council and other community leaders, worked with Mr. Marinelli’s heirs to spare the theatre from the wrecking ball.