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So I'm back to dabbling in theater exhibition and I'm talking with a few people who might be interested in funding a small arts theater in the north suburbs of Atlanta. I've found a very low-cost location - a K-Mart pulled out, and a Borders has only taken the front half of the empty space, leaving ~14,000 sqft of space in the rear available in a $26/sqft location at $8/sqft. I only want 6,000 sqft. We're talking about a small twin - 35' screens, 130 seats a piece. There is nowhere within an hour or so drive to see any major independent film, or after-hours cult films, or auditorium space for rent.

For those of you running smaller arts theaters in suburban areas - how have you made it work? The demo of the area is great, but when I run the numbers, it would work, but its just on the edge.

With the layout we're looking at, each auditorium will be 36' by 55'. There will be a lobby with concessions as well as coffee bar, one pair of 5-head restrooms, an employee work room, and a backoffice. We're thinking about ussing a mazzanine system for a faux-booth above the hallway to the theaters rather than constructing an enclosed booth - so people in the lobby can hear the projector noise, maybe help create the sense of being at the theater again.

So should we even bother? Is film dying - nonetheless art/independent film? Don't want to be rich - just happy.

I'm just a novice, but...

If the numbers are just on the edge of making it work, I would be hesitant to do anything with it. People always want to talk about the break even point, but I came to realize that it's better to look at that plus the amount of money you want to take home in order to make it worth your while. Just break even and you'll be doing a lot of hard work for nothing. Besides, you can be pretty sure that it will cost you more than you think, or that your estimates will have some degree of error anyway. I'd be suprised if anyone would refute that statement.

Sure, some figures can be concrete, like the amount of the lease, but there are a lot of variables that you can only make your best guess at. The hardest one for me would be projecting the actual revenue. How many people are going to come to the theater? I don't have a crystal ball, but somebody once answered a post on here when I asked how many people it takes to support an art house. They said that it takes about 100,000 people to support an art screen. You want a twin, so that would mean 200,000 people. The suburbs of Atlanta might provide you with that large of a market depending on exactly where you are.

If you can put good signage out in front of the building, and your in a good neighborhood, it might be ok to be behind the Borders. A good book store might just help you draw the kind of customers you are looking for. Are you sure the ceiling is high enough below the rafters? Are the columns far enough apart? Is there adequate parking for your theater, the Borders, and whatever other business is going to take the rest of that extra space?

These are just some questions I would have.

Also, if you have an open booth, will you have problems with dust and heat up there? I always hate to be up high in a building without excellent cooling. An open booth might let some heat escape, but plenty will also rise from down below, along with dust and other particulates. Sitting up in the rafters in the summer in Atlanta might get pretty warm for your projectionist and your equipment. Or am I wrong?

Something else I noticed is that the big chains are starting to run more art product in our area. Maybe in yours too? Look at Avalon's case. He showed the big boys that there was a market for art films in his area, and they decided to take advantage of the market he had cultivated.

I suppose there is risk in everything, but I guess what I'm saying is if the margin looks too thin now, what's going to happen with competition or if the industry continues to slip or if your figures are a little off? Now, if your numbers have enough cushion to make you comfortable in those cases, then maybe you should go for it. If not, you may want to give it some more thought.

I always err on the side of caution when projecting anything, so when I say it's tight - I mean its tight, but thats at the famine end of things. It used to be a K-Mart big-box, so theres plenty of height. The beams look to be seperated acceptably. Within five miles there are 106,000 people with an average household income of $92k. The main concern is adequate signage, but we've been assured that there would be. We'd have our own parking lot to the side of the Borders, with a walkway to our entrance at the rear. With proper marketing and content I think it would be a slam dunk - there's little for the young demographic to do in this area, and with a good per-ticket price or membership package, I think it would be great. Any other input?

You have to judge it all but if the space is there for the taking I would kill for that 3rd screen. The Borders Books is a huge combo.

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Michael Hurley
Impresario

It would definately be nice to be in a space where expansion is always a possibility. I've been playing around in Punch and designed a two screen, etc, that is made to be able to add two 200 seat screens at any time (given the space). I think I'm going to have to dust off the business plan and modify it a little bit. Any other recommendations, comments, etc? Where have you been successful in getting non-traditional financing (this may needs its own topic).