Downtown Cinemania Fades to Black
The act of going downtown to see a movie is another great example of America's nostalgic relationship with its urban past — kind of like shoeshine boys, hopping onto streetcars, and tossing nickels at newsboys shouting headlines. Nostalgia aside, the post-war suburbanization of culture led to a downtown exodus not only of housing, offices, and retail, but also of cinemas.
First, theatre screens popped up on the exurban fringe in the form of drive-ins. Eventually, twin theatres began appearing in malls and shopping centers, and ultimately in multi-screen configurations. This pattern left many a grand old downtown cinema to fend for itself – usually with poor results. California's best example of the decline of the downtown movie house remains beleaguered downtown Los Angeles, where the city's storied Broadway is littered with grand movie palaces that are listed on the National Register of Historic Places, nearly all of which are shuttered.
The emergence of the new retail and entertainment downtown during the late 1980s has been accompanied by a return of movie screens to downtown – usually in multiscreen formats. But a counter-trend has also emerged, bifurcating the booming cinema exhibition business. Driven by consumer preference for choice and distributor preference for volume, the 1990s also saw the industry turn to giant, high-tech megaplexes: stadium seating, digital sound systems, and nearby parking structures. Some plexes have become so large that they often serve as anchors in there own right. And these projects are rarely placed in the built-out, under-parked, aging commercial districts of yore. Old downtowns do not fit the profile of most exhibitors.
Meanwhile, a cinema screen niche market has emerged downtown, starting in Pasadena. In what was a daring move for the time, United Artists opened a modest cineplex in Pasadena's then-nascent Old Town area back in the late 1980s. That one development has since been considered by Pasadena observers to have been a crucial spark that ignited one of the most successful downtown shopping and entertainment developments in the state. Since that time, many a city hell bent on downtown revitalization has pinned all hopes on getting a cinema back up and running. And a small number of exhibitors have obliged them, particularly when public tax dollars helped grease the skids.
So during the 1990s, many a downtown cineplex was built. Currently, there are probably more screens in the planning process in California's downtowns than at any time since the 1930s. But just as many downtowns have found a new life as retail and entertainment centers, the cinema exhibition industry has hit hard times. And that has placed many a project in jeopardy. For the downtowns that have not yet turned the corner, the struggles of movie houses could spell trouble.
"The whole [cinema exhibition] industry is in a major state of turmoil, making it difficult for new theatre deals to go ahead" says Roger Dale, Principal of The Natelson Company, an economic consulting firm based in Orange County. Indeed, during the last year, cinema chains such as Edwards, United Artists, General, and Carmike have all filed for Chapter 11 bankruptcy protection. Not surprisingly, overbuilding has been at the heart of the problem. According to industry officials, in 1995 there were 27,000 screens in the United States. At the end of 2000, the number had grown to 37,000 – a 37% increase. It's understandable that exhibitors were enticed into building – box office revenues have increased for nine years running. But the big losers are the big chains that weren't watching the niche markets closely enough.
So, despite evidence that many recently-developed downtown cinemas are actually doing well, many cities are watching their screen dreams get cut. In mid-January, the City of Culver City was tripped up when American Movie Corporation pulled out of a 20-screen project in the Town Plaza project, a development the city has worked on for years, and one seen as necessary for Culver City's downtown revitalization. The City of Oxnard has lost at least two exhibitors it had lined up during its now three-year effort to get a downtown cineplex off the ground.
According to Dale and other industry professionals, however, downtowns remain one of the niche markets where more theatre growth is possible. "One of the exhibitors doing well is the Krikorian chain, which sticks to smaller 12 to 14 screen venues, and takes advantage of redevelopment assistance" says Dale. Another successful player is San Rafael-based Century Theatres, a rapidly growing exhibitor with eight downtown theatres currently in the works, including San Mateo, Sacramento, and Albuquerque.
Century spokespeople suspect that they are the nation's leading developer of downtown theatres, with 40% of their current projects in central business districts. According to Victor Castillo, senior vice president of corporate development at Century, the key to success downtown lies in the answer to four questions: 1) is there a newly opened, stadium seating cineplex in the trade area? 2) Is access to downtown easy? 3) Is there plenty of parking? 4) Does the downtown have something else going for it?
"There are some downtowns that are so in the hole in terms of their situation that there needs to be a plan that goes beyond just putting in a theatre," Castillo says. Century executives, when considering a downtown location, visit the downtown, sampling restaurants and checking activity levels. "The momentum needs to be going in the right direction," says Castillo.
As with many things in planning and development, success depends up on whom you work with. Despite a number of stalled or canceled downtown cinema projects in California, many downtown cinema projects may still be viable, particularly if the downtown is already showing other signs of life. Ultimately, it's the deal partner that may determine whether a community gets to live out its movie-going nostalgia, or whether those dreams will fade to black.
Stephen Svete, AICP, is president of Rincon Consultants, Inc., a Ventura-based consulting firm.