Hello Everyone. I have been reading the posts and archives on this site with great interest over the last several days. You have a fantastic site here. Thanks very much to all who share their knowledge and experience. Now that I'm blear eyed and too tired to read more, I thought I would finally post something.
If you would, please consider the following situation:
There is an old 4 screen theater in my new town that is for sale. It is located on the historic town square (a beautiful area getting by, but not particulary hip or trendy). Property values here seem high compared to my bank account. Good locations for businesses are near the interstate on the south edge of town, not the town square in the center of town. Still this is only a few miles apart. I consider cost of new construction out of the question (think millions just for the best available land), and I'm not sure about the cost of refurbishing the old theater but it would seem to be the less expensive option. When I discovered that the old theater is for sale, I immediately began to consider the possibility of buying it. I'm sure I'm crazy, so I should fit in well with many of you who have claimed to be the same.
Anyway, the price for the theater is well below other property values in the area, but still probably higher than it should be based on the dismal condition of the building. There is no equipment. The sloped floors have been removed and only flat ones in questionable condition remain. Essentially all the seats are gone too. There are no screens, curtains or wall coverings of any kind except really bad paint that shows the outlines of the old sloped floors and old light fixtures. The theater was closed about 2 years ago. There is supposed to be heat and air conditioning systems still in the building, as well as restrooms (hopefully intact). I hope to look at the property next week. I'm told that a lot of asbestos abatement was done and that's why everything has been removed.
The owner didn't go out of business. He built a new 10 screen cinema about three miles away by the interstate. Great for him, but maybe there is also an opportunity for me here. Normally, I would say this building should be turned into 3rd rate retail space. It doesn't seem to have ever been a grand place, other than being part of a national historic site. No special facade or endearing architectural elements. The building appears to have solid bones in the form of old limestone construction. It is over 11,000 square feet. I don't know the exact size of each room, but I would guess from looking through the windows and pacing off the dimensions from the sidewalk that the two biggest are 25 to 30 feet wide and about 90 feet long. The rest appear to be the same width, but 15 or 20 feet shorter with small store fronts between them and the front of the building. Interior walls are mostly made of brick that is 5 layers thick or other similar strength material. They really built them to last back then. There is an upstairs with restrooms and projection booths. There is a small lobby with one tiny restroom, which must have been for concessions people to wash their hands based on pictures I've seen of the interior taken before the place closed. The area behind the lobby is not a theater, but I think it must be for mechanical systems, such as air conditioning and heating. I will know after the showing. All together the 4 theater rooms and the lobby make up what might have been 5 store fronts when the building was built long ago. People have told me that the theater originally had only one screen but later expanded. Now there is only one front entrance through the lobby.
The building is listed for about $350,000 which is about half the price by square foot of other buildings nearby. One unique aspect of the property is that it is still listed on tax rolls as being three separate properties. The current owner will consider selling only part if necessary. I know everyone always says that more screens are better, but I'm not sure how I will raise even enough money for one part. Especially since it has also been said in past posts that banks don't usually lend money for theaters.
By now, you may be saying that this is a bad idea, but first let me tell you about the demographics. The town has 22,000 people. The county has about 100,000 people. The nearby 10 screen is the only theater in the county. 25 miles away there is a 3 screen theater, and 25 miles the other direction there is a major metropolitan area (millions of people) with many theaters. To get to the nearest regular art house theater, a person must drive about another 35 miles to the other side of the metro area (60 miles from here) where there are at least 3 with numerous screens each. On the near side of the metro area, there is one museum which shows a single art/indie film Fri, Sat, and Sun at multiple times in their auditorium. I've read they have good attendance, but I have not been there. Also, they don't even have concessions. They admit that they can't get major indie films from the likes of Miramax because they have limited showtimes.
As for education levels, more than 25% of populations in the town and the nearby major city have at least bachelor's degrees, but the figure drops in the outlying county area. There is a junior college in town with an enrollment around 5,000 but only a few hundred live on campus. The nearby major city has 4 significant universities, but I haven't checked enrollment numbers yet.
I'm sure you get the picture. The art film fan is definitely underserved here. My only questions are:
1. What would the actual area be that I can draw customers from? Would they drive 25 or 30 interstate miles from the major city, or will they just go the other way to more established theaters approximately equal distance the other direction (albeit through much heavier traffic)?
2. Would it make sense to buy only the lobby and one long theater? Or should I only consider buying if I can manage to raise enough funds to buy two theater rooms? Or do you think it's necessary to buy the full 4 theater rooms? I'm hoping to maybe swing 2 if I can get a loan, but I don't know how I would ever buy 4.
3. If you were the current owner with a 10-plex, would you be willing to sell to someone who doesn't want to compete with you on first run movies? (The realtor says he might, but I haven't got an answer on that yet.)
4. If it were you, would you want to take on this project?
Thanks for any help or comments you can provide.
lionheart
Forums 
