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Author Topic: Theater with no payments
James Wyrembelski
Film Handler

Posts: 60
From: Beaverton, MI, USA
Registered: Sep 2015


 - posted 09-08-2015 11:13 PM      Profile for James Wyrembelski   Email James Wyrembelski   Send New Private Message       Edit/Delete Post 
Hi there! New member here, so hello!

This may be lengthy....so hold on...lol

I want to get some thoughts on a potential transaction I may be having with a theater that is being put up for sale. I know many cringe at hearing "I want to buy a single screen in a small town". The money isn't good....I already get that. I also understand the idea that it may not make any money, period. However, I'm in a bit of an unusual and rare circumstance. I would be able to get the theater itself at no cost to me...and have no payments on it....I would own it free and clear and have no mortgage and owe no investors. I won't go into the details of why but that fact changes things a lot.

This single screen has been in operation for about 75 years continuously and was even the demise of the single screener in the larger town neighboring us back in the 1960's. Currently seats 300. This theater is wider than longer so the building itself is actually quite small. It would be able to serve just over 20K people (10 mile radius) with the nearest competition about a 30 minute drive (9 plex). The county itself is around 25K with a stable population working in the service and manufacturing industry and our county does see a swell of population in the summer months from tourism. ALL of our major employers are expanding as well and have been on a hiring binge.

The only monthly payments (outside of standard operating expenses) I would take on is the projector lease. With insurance runs about 650. I believe they received the NEC deal earlier this year.

The positives with this building are:
Newer rubber roofing
New main water line and plumbing
New electrical
New digital sound
NO foundation or structural issues
NO leaks in basement or attic spaces
Large adjacent parking lot
Low city taxes

The bad:
Bad reputation for cleanliness
Molded auditorium, moldy seats, drapes, and carpeting
The bathrooms are somewhat of a local legend...and not a good one
NO signage of any kind.
Falling ceiling tiles
Worn out concession area
Mice
Bad auditorium smell from no cleaning

The theater also includes everything in it. Nothing will be taken out of the building except personal items if I assume ownership. The county ED is wanting to work with me heavily as well as the city's business association (which offers its own grant money for facade improvements).

This place has struggled due to two main reasons. The cleanliness and lack of advertisement. Ive worked for years in this town and like all towns, people come and go. Most people that have lived here for up to 10 years have no clue we even have one.

The most I am hoping to make is maybe a humble managers salary of say 25K. I know there are some single screen owners that have actually made it....but many more that haven't. Given the circumstances I'm in and a county aggressively offering help...should I take on the challenge? This is the main question behind the post. If I wasn't in these circumstances I wouldn't be asking. I would appreciate any comments, thoughts, or questions [Smile] And thanks for letting me be apart of the forum!

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Bill Brandenstein
Master Film Handler

Posts: 304
From: Santa Clarita, CA
Registered: Jul 2013


 - posted 09-09-2015 11:09 AM      Profile for Bill Brandenstein   Email Bill Brandenstein   Send New Private Message       Edit/Delete Post 
This one? Gem Theater

Can you modify the front to minimize the exits and maximize a new screen?

Best wishes to you, James.

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Scott Norwood
Film God

Posts: 7867
From: Boston, MA. USA (1774.21 miles northeast of Dallas)
Registered: Jun 99


 - posted 09-09-2015 11:31 AM      Profile for Scott Norwood   Author's Homepage   Email Scott Norwood   Send New Private Message       Edit/Delete Post 
Some thoughts:

Does this place have any interesting history? Any premieres, stars, famous patrons, etc.?

If they are already equipped for D-cinema, that is good (from a business perspective, not more generally).

Can you do anything about installing a sign or marquee? Most of the problems that you list are fixable, but none of this will help if people do not know that the place exists.

Would the proposed deal give you complete ownership of the property (including the ability to sell/lease/improve/demolish it), or is it "free rent" that would require you to operate it as a theatre and give up ownership of any improvements made to the building?

What is the theatre's current booking policy (first-run, discount, art-house, repertory) and does it have the ability to book any and all titles? Or, if playing first-run, does this place compete with another theatre in the area for top titles? Are the current ticket prices too high, too low, or just right? Is there a chance that changing the booking policy and/or pricing scheme would improve attendance? How many seats are in the auditorium?

Is the exising business current on bills and payments to film distributors?

You would want to look at the current boxoffice numbers as well as current expenses. Tax structure is a possible issue here, too--is there an excise tax that would be increased if you improve the facility? Also, you need to know estimated expenses for payroll, lights, heat/ac, insurance, maintenance, shipping, advertising, etc.

Are there any potential uses for the building when films are not being shown?

Do you have cash (or access to cash or credit) to address the existing issues? The seats and drapes and bathrooms are probably the ones that need fixing most urgently. Will any of this work require making the place handicapped-accessible?

What other entertainment options exist in this town?

Good luck with this project; let us know how it works out.

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Mitchell Dvoskin
Phenomenal Film Handler

Posts: 1790
From: West Milford, NJ, USA
Registered: Jan 2001


 - posted 09-09-2015 12:27 PM      Profile for Mitchell Dvoskin   Email Mitchell Dvoskin   Send New Private Message       Edit/Delete Post 
Everything Scott said.

From reading your "The Bad", it seems that it will take more than a good scrubbing of the auditorium and bathrooms to make the theatre a place people want to attend. Will you have the resources to do complete renovations, and if those resources come from loans, will you be able to absorb the added monthly cost.

Putting up a marquee, even if it is flat against the building, and some decorative outside lighting is essential to letting the public know you are there. Is there anything else open in the downtown area in the evenings? While we are on the topic, how is the rest of the downtown? Is it thriving or does it look like an outtake from the last picture show?

If this is indeed the Gem Theatre in Beaverton, then the street view picture in Google Maps makes the exterior look rather uninviting. It's going to take more than a coat of paint to change that. It will take making the front look like a movie theatre.

I do see potential there, but my gut says run away...

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James Wyrembelski
Film Handler

Posts: 60
From: Beaverton, MI, USA
Registered: Sep 2015


 - posted 09-09-2015 01:54 PM      Profile for James Wyrembelski   Email James Wyrembelski   Send New Private Message       Edit/Delete Post 
Thank you for all of these great comments!

Now to answer questions

No, the theater would be in my name completely. I would enter as sole owner...the property would be mine to do as I wish. Call it a recent "windfall" that's allowing me to do that and have no out of pocket expenses to do so.

I agree...the front is its worst enemy. Our downtown development authority has begun the process of giving out money to any business that's in a state like this one. They would offer up money to improve any facade requirements. Recently our local ice cream shop re-opened and received money for new paint and signage...as it was an eyesore in town.

The theater is current on all bills. It has no back taxes, is completely owned outright by the current owner. ADA is clear right now, mostly because this has never been closed for significant periods of time. However, the only issue may be the bathrooms, mostly just because of door size. There are no excise taxes however when ownership is transferred it may undergo re-assessment....it's current assessment is sitting at about 22K.

Like I said, all of its faults are in cosmetics and sanitation. Structurally this thing is a tank and shows no major issues. Although cosmetically it has been neglected, it was majorly re-done mechanically.

Due to film availability this theater went from first run to sub run a couple years back. Its history has no significance as far as any major stars or productions. It has outpaced all theaters in the area in its heyday and outlasted them drawing from 5-6 counties. And the locals quoted it as "stellar" back when it was well run.

It currently charges 5.00 a seat (under priced imo) And under priced on certain concession items. For instance some candy is only a 1.00 and some specialized beverages are also priced that low and he pays the tax on that as well. But concession is also very very limited and sometimes he doesn't re stock. I would expand and add more items.

Downtown is shaping up better and better each year, all but one building is vacant...and we received news today that its been purchased and plans are underway to add a new business. In fact, we've had many, many new businesses open doors in the last two years. The town is deceiving because it's split between the lake.

There are three restaurants open evenings in the immediate downtown area. One restaurant is famous throughout the state and pulls very large crowds both locally and state-wide. As for entertainment we have our restaurants/bowling alley/lake/campground. The city is also finishing its 1.2 million dollar renovation for the "activity center" which will house its library, pre-school, coffee shop, fitness center and many other amenities. However, winter entertainment in the area is limited.

The school announced today that enrollment is finally beginning to increase. We're on the verge of a big upswing for this area, especially with our manufacturing base. We are the plastics thermoforming machinery capitol of the world. Surprisingly we also get many out of state and global visitors from our companies.

I have my own cash reserves and credit available for immediate cleaning and upgrades such as seating repair, carpeting, and drapes. I still have to meet with the business association and the county economic development to see what they may be offering.

Oh, and Bill. You COULD potentially change the front screen area to widen it. The area closest to the screen still hides its curtain behind that area (and it still has its curtain btw) However I feel this may not be a necessary change...or at least immediately. This auditorium is a bit wider and shorter than older theaters that were somewhat skinny and long. Even in the back rows the picture still appears "large" and is phenomenal in the center rows. I've never watched a film up close here (but who does except kids? lol) I haven't asked what the throw is or screen size. I'll make a note of that.

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Mitchell Dvoskin
Phenomenal Film Handler

Posts: 1790
From: West Milford, NJ, USA
Registered: Jan 2001


 - posted 09-09-2015 04:57 PM      Profile for Mitchell Dvoskin   Email Mitchell Dvoskin   Send New Private Message       Edit/Delete Post 
> Due to film availability this theater went from first run to sub run a couple years back.

Now that the theatre has digital projection, is it still sub run?

It is very hard these days to make a go of a sub run theatre, the window to home video is so tight.

Also remember that there are going to be weeks where you will not gross $650, especially off season and if you are required to hold a movie longer than it is profitable. On the other hand, there will be weeks in season when it rains and you will do great business. Make sure you have enough money to get through the lean months. Lack of money is what makes most small business fail.

Finally, is that parking lot yours or the towns. If it is privately owned, and not by you, one day you may wake up and find it is no longer available for your customers use.

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James Wyrembelski
Film Handler

Posts: 60
From: Beaverton, MI, USA
Registered: Sep 2015


 - posted 09-09-2015 05:25 PM      Profile for James Wyrembelski   Email James Wyrembelski   Send New Private Message       Edit/Delete Post 
The adjacent parking lot is privately owned. However, most upkeep has been maintained by the entire block. It's always been considered "everyone's" parking lot. When this theater was built back in 1940 it had two buildings next door that occupied that space and were torn down sometime in the early 1950's. The theater has used that parking lot for well over 50 years. There are also two small parking lots on each end of the block, and street parking directly across from the space.

Not saying that things would change potentially but as an immediate threat the risk is very minimal of us not being able to use it. The business owners here really do work together!

The theater appears to be going the sub run route currently as it just got back online switching to digital about a month ago. I don't expect any changes as the reason this place is being sold is because of health issues.

Also to consider. This would be a "second job" . I would retain my current job as well as running this location. My schedule is incredibly flexible. I also plan on offering (local business only) advertising on screen 30 minutes before each show. I know many disagree with that, but hey people like seeing locals up on the big screen! Also plan on theater rentals and other miscellaneous services to augment sales.

Thanks again for all the input

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Scott Norwood
Film God

Posts: 7867
From: Boston, MA. USA (1774.21 miles northeast of Dallas)
Registered: Jun 99


 - posted 09-10-2015 07:30 AM      Profile for Scott Norwood   Author's Homepage   Email Scott Norwood   Send New Private Message       Edit/Delete Post 
All of this sounds potentially interesting, but you know the market better than any of us. A downtown theatre with parking and nearby restaurants is good. Could you do general cleanup and upgrade the sign, seats, drapes, and bathrooms and get your investment back in a few years due to increased attendance and/or concession sales?

Judging by the pictures in the above link, the front of this place looks rather depressing. I would think that a big neon marquee (if you could get zoning board approval for it!) would do quite a lot for this place.

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Buck Wilson
Jedi Master Film Handler

Posts: 828
From: St. Joseph MO, USA
Registered: Sep 2010


 - posted 09-10-2015 10:26 AM      Profile for Buck Wilson   Email Buck Wilson   Send New Private Message       Edit/Delete Post 
Short of winning a multi-million dollar lottery, this opportunity couldn't get much better. Clean it up and people WILL start coming. I am quite envious. Please stick around here, learn "Presentation Done Right", and implement it. I wish you the best of luck.

I agree with others, you need SOMETHING up front to tell people you are there, of course we will recommend a big classic art deco marquee [Smile]

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Manny Montes
Master Film Handler

Posts: 269
From: United States
Registered: Feb 2010


 - posted 09-10-2015 05:18 PM      Profile for Manny Montes   Email Manny Montes   Send New Private Message       Edit/Delete Post 
My first question is, have you done an assessment of the area surrounding for it's viability. Living there is one thing, however if I were you i'd check actual numbers, median household income, etc. to see if the community will be able to support the theater.

If so, you can really go one of two ways, raise money from the community and make it a community theater with a nice small town feel. I've seen theaters sell seats, bricks, etc to help pay for renovations. Personally I do not like this as sometimes people then feel like you "owe" them to run it how they want. Second off I agree with you that the prices are too low, however you may face some kickback charging more, you'll really have to market well and push the new amenities, cleanliness, etc.

Will you be able to change the facade? Is it a historically registered site? Often times with old buildings it is hard to add front signage due to it being a protected building. Just something to think about.

Capital Expenditure upgrades, looking at a few of the pictures, I'd definitely look to replace those seats or renovate the restrooms if they are that bad of a local legend [Smile] Where will this money come from? etc.

Obviously I think you have the right idea, but remember that there will be times that you will be in the red, many theaters are in the red for the slow months and jump back when it gets busy

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Mike Blakesley
Film God

Posts: 12106
From: Forsyth, Montana
Registered: Jun 99


 - posted 09-10-2015 05:46 PM      Profile for Mike Blakesley   Author's Homepage   Email Mike Blakesley   Send New Private Message       Edit/Delete Post 
To all of the above comments I would add, "keep your current job too," at least at first. That way you can plow as much money as possible into the theatre and make it the best it can possibly be.

There hasn't been much mention of the sound in the place -- how's the sound? I would argue that the sound is THE most important thing, these days, that differentiates the home experience from the theater experience. So if necessary, upgrade the sound for sure.

Definitely do something with the outside colors to make it bright and exciting. And absolutely you need a marquee with neon on it.

Good luck and keep us informed on your progress!

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David Buckley
Jedi Master Film Handler

Posts: 515
From: Oxford, N. Canterbury, New Zealand
Registered: Aug 2004


 - posted 09-10-2015 09:11 PM      Profile for David Buckley   Author's Homepage   Email David Buckley   Send New Private Message       Edit/Delete Post 
quote: Manny Montes
...I agree with you that the prices are too low, however you may face some kickback charging more, you'll really have to market well and push the new amenities, cleanliness, etc.
Due to the earthquakes, this experiment has actually been tried locally.

We used to have a little single screener (61 seats IIRC) 35mm house, that charged (again, IIRC) $7.50 a ticket. The venue, although functional, wasn't a top notch house, "tired" might be a good description. But it was popular and served what was perceived to be its community's needs. It also had reasonably priced concessions.

The replacement venue is a twin screener, with something like 35 seats a screen, with $16.50 tickets (albeit with a number of discount options), and expensive concessions. The new venue is much "nicer" and refurbished and replaced to a goodly standard, and the movies are now that impeccable digital stuff ( [dlp] !), and they now have a better sound system.

There's been no complaint about the price. Despite the fact that the next nearest cinema, 25km away, charges about $8 per ticket.

So, if the people perceive they are getting a lot more value for a lot more ticket price, they seem quite happy to pay that price.

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James Wyrembelski
Film Handler

Posts: 60
From: Beaverton, MI, USA
Registered: Sep 2015


 - posted 09-10-2015 10:06 PM      Profile for James Wyrembelski   Email James Wyrembelski   Send New Private Message       Edit/Delete Post 
Hey guys!

Loving the critiques! Now to answer some questions raised here...

Signage won't be an issue. This city is VERY accommodating and relaxed to a fault with a lot of these things. Strangely this theater has never had an actual marquee (btw, all of the pictures on cinematreasures are mine lol) It only ever had a flat awning with some bulbs at the bottom and No vertical sign. Pretty minimal in its time. The horror! The front is currently composed of vinyl siding hiding a brick exterior which I would LOVE to expose but the doorways were altered about 35 years ago and enclosed so that would take quite a bit of work that WILL be done but I am mostly focused on signage and sanitation. Im talking soon with the DDA to see about possible funding for the front exterior. And no, this is not registered as an historic building. TBH, I'm glad its not as that causes too many rules to be in play.

I agree....seats are an issue and Im keeping watch for quality used seats until we can get legs on this place to fund newer (and fewer) seats. Boy are they pricey [uhoh] In the meantime these can easily be retrofitted and "spruced up" with a little ingenuity. However, they're still quite comfortable, are wider, and none have awful ripping or sagging. Really...they're just dirty. I personally dislike the red/blue combo of them too....

The bathrooms really are not as bad as they are made out to be. Its really a matter of new flooring and proper ventilation. Some paint, decor, and CLEAN fixtures would take out that "legend" quite fast. (the womens room was actually recently re-done...terrible colors though....)

The sound has dramatically improved with a new CP750 sound processor installed last month. Speakers are still a bit older and recently were re-wired. Its not OPTIMAL but still impressive compared to home.

I have done my demo research. 5-miles we see about 6,600 people. 10- we see about 22,000. At 15 (a bit of a stretch imo due to competition) we see about 45K. I use 10 miles as a good base. Almost exactly 50/50 split male/female. Pretty even numbers age wise between the groups falling 0-25 and 65+. Each group hovering around 20% with the 45-64 group being the higher at 25%. The radius data however collects from other counties as I'm on the southern end. I would be able to capture more from my county in the north as well, and our county is close to 26K and they're farther from the multiplex. This county has had growth each decade since 1880. Two exceptions are the 1930's at -16%(depression era)and the 2000s (08 crash) at -1%. Median family income hovers around 40K. We're not poor, but we're not rich either lol.

My plan so far is to do the standard first run fare at peak seasons, sub run on off seasons to capture any hits I may have missed..allow for some more turn over and choice, or perhaps play more films geared towards the older or middle aged crowd to appease them *something often complained about here* I want the price to be higher, but fair. Higher than it is currently....but just ever so slightly lower than the 9 plex *this is a major complaint about them...price vs product* in order to show value.
I dont want the mantra of "its cheap so probably a dump" to apply here in the public's mind.

I want it simple, clean, but with a certain touch of class only single screeners can do. Not that multi's cant but you know what I mean. [Wink] And I think one important aspect is being heavily involved in community events and business affairs. This place has never done that and it shows based on opinion in the community.

Btw, I'll be adding more pictures on cinema treasures as well. Some old, some newer. Thanks for the feedback. Nice to be able to get comments and criticism. I've scoured forums for almost a year now. But there's always more to learn....

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Justin Hamaker
Film God

Posts: 2019
From: Lakeport, CA USA
Registered: Jan 2004


 - posted 09-10-2015 10:37 PM      Profile for Justin Hamaker   Author's Homepage   Email Justin Hamaker   Send New Private Message       Edit/Delete Post 
A few other things to consider

1. Does the town have adequate local shopping to keep people in town most of the time? This is an issue that really hurts my community because people regularly have to drive 90 minutes for most shopping. So when they are out of town they are also going to dine out, catch a movie, and other things. This might also impact your decision about whether you're playing on the break, or waiting a few weeks.

2. Get to know the movie going habits of the local community. It sounds like you have a large median income working class community. This means you're ideal movie choices are going to be family oriented and mainstream hits. But of it's a local norm to head out of town on Saturday and Sunday to go shopping, this might influence the decisions. Something to consider is running as sub-run so you can double up most weeks. This will allow you more variety and keep more people in town.

Along these lines, try to get a handle on the senior population. These will often be your most reliable moviegoers - especially if you are open during the week. And you will often do well with movies like A Walk in the Woods.

3. Get a Facebook page setup and aggressively try to build your fan base. For our drive-in we found that giving away a few passes each week and paying for a $40 boost makes a huge difference. The pages manager allows you to be very selective about who is targeted by your post, so you can be sure it's local and targeted to the people who are your main audience. For what it's worth, we've found that women 18-50 are the prime target for our drive-in because the women make most of the entertainment decisions.

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Frank Cox
Phenomenal Film Handler

Posts: 1749
From: Melville Saskatchewan Canada
Registered: Apr 2011


 - posted 09-11-2015 01:33 AM      Profile for Frank Cox   Author's Homepage   Email Frank Cox   Send New Private Message       Edit/Delete Post 
Set up an email mailing list for current movies and coming attractions. I have a sign-up form on my website for people to sign up for the "automatic emails" and I send an email out every Thursday night with a reminder of what's playing starting on Friday, and an email every time I have a new movie booked. That way people don't have to take any action at all to find out what's playing -- the information just shows up for them by magic.

I wrote a program to manage my mailing list, and you can download it here.

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