Betsy Wallace had her eye on this property in Park City, and she got it.

“It’s the perfect location, in the heart of Park City,” said Wallace, managing director of the Sundance Institute. “I had seen that spot free up for quite a while, and I said, ‘I think it’s time to put a stake in the ground with a new theater.’”

That spot is a 25,000-square-foot space in a shopping area on Park City’s Park Avenue, a former Sports Authority store between the Fresh Market supermarket and the Holiday Village multiplex.

Over the past four months, construction crews have been transforming the space into the newest venue for the Sundance Film Festival: The Ray.

The Ray’s upper floor will house a 500-seat theater with a Dolby Atmos sound system. It’s about the capacity of two of the festival’s major Park City venues, the Library Center Theatre and The MARC. Only the Eccles Center theater, at 1,270 seats, is bigger among Sundance’s Park City screens.

(Scott Sommerdorf | The Salt Lake Tribune) The interior of The Ray theater, a 500-seat theater being permanently installed in the space that used to be the Sports Authority store.

The downstairs level of The Ray will be home to part of the festival’s New Frontier lineup of virtual reality, augmented reality, mixed reality and artificial intelligence exhibits.The Ray’s New Frontier space will also feature The Box, a 40-seat mobile VR cinema that will showcase four mobile programs. (New Frontier exhibition space will also be housed at Kimball Art Center, and the VR Bar will bring mobile content to the Music Cafe on Main Street in the evenings.)

Across the Fresh Market parking lot from The Ray is the Park Avenue Theatre, the 295-seat space formerly known as The Yarrow. (The hotel changed names, to the DoubleTree by Hilton, a couple years ago — but old-timers will always know it as The Yarrow, just as the Fresh Market will always be Albertson’s.) The same shopping area also contains the Holiday Village multiplex, which is home to press-and-industry screenings but open to public screenings toward the festival’s end.

“This is creating a wonderful theater district for us, just by location and luck,” Wallace said.

The new site, serviced by bus stops on Park Avenue and Kearns Boulevard, also “allows us to distribute people more evenly in Park City, off of Main Street,” Wallace said.

And while there’s another 500-seat theater in Park City, Keri Putnam, Sundance Institute’s executive director, stressed that “we haven’t expanded the number of films in the festival. The idea is to mitigate crowds.”

The new theater district also hints at what’s to come in Park City, Wallace said: an arts-and-culture district along Kearns Boulevard, featuring the Sundance Institute and Kimball Art Center. Park City’s government has purchased a 5.25-acre space for the district, and the planning process is under way.

The Ray’s VR space will be an improvement over the tent on Swede Alley, behind Main Street, that was used for New Frontier exhibits. That space, now called Festival Village, will be a location for one of the festival’s sponsors, Acura. Last year, Acura’s space was in the middle of lower Main Street, and blocking off the street irked local merchants. This year, the street will remain open.

Other changes to this year’s festival:

Free screenings • The festival has scheduled six late-night screenings — four at the Park Avenue, two at the Tower Theatre in Salt Lake City — that will be free to the public. Titles will be selected from what looks to be drawing crowds elsewhere during the festival. Screenings at the Park Avenue will be at 11:30 p.m. on Jan. 20, 21, 26 and 27; screenings at the Tower are at 11:59 p.m. on Jan. 21 and 25. Admission will be determined by the e-waitlist system, so get on the app two hours before showtime. “It’s part of our giveback to the community,” Wallace said.

Festival Favorite • Sundance is unveiling a new award, the Festival Favorite. Every feature-length film is eligible for the honor, which will be determined by audience votes. The winner will be announced during the week after the festival.

Next Innovator’s Award • Another new award is the Next Innovator’s Award, given to a film in the Next category that shows a forward-thinking approach to storytelling. The award will be decided by a jury of one, and this year’s juror is the drag icon and TV host RuPaul.