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TOPIC: Renovating the Edison 8; closed theater re-opening

Renovating the Edison 8; closed theater re-opening 25 Feb 2009 01:18 #30971

  • tburk
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Greeting to movie theater owners far and wide

The reason for this post is get some feedback from some experienced owners about a potential move theater. So, in order for you to be able to impart your wisdom, you need some facts. And that facts are as follows. The location of the theater is Fort Myers, Florida. It is a 8 screen theater that closed 2 year ago. The owner, Sunstar Theatres, was company that came out of bankruptcy to run a handful of theaters in FL and a few in NY. From what I can find, they soon ran into bankruptcy problems again due to a legal case against them in NY. The as it stands right now is an 8 screen, 27,839 sf location with all 8 screen and 1,648 seats.

My idea is to open a 2nd run theater. In a 5 mile radius there are 30 1st run screens and taking that radius out to 10 miles there are 56. That seems like high saturation to me. However, within that 10 mile radius there are no 2nd run theaters and if that radius is taken out to 20 miles there is still not a 2nd run theater. Not a single one. Also, within the radius the lowest ticket price is $9.25 The demographics of the area say that with the 5 mile radius there are 134,508 people with an average salary of 60K. The average daily traffic of the street is 53,000 according to 2007. With that in mind, I believe there is sufficient room for a 2nd run theater to be profitable.

Where the rubber meets the road is the dollar sign. The lease for the theater is $1 per sf. In addition to that the Common Area Maintenance (covers maintenance of the building, building insurance, and real estate taxes) is $4.75 per sf, bringing the total per sf to $5.75. That makes the rent $160,000 for a year, being payed monthly at $13,339 a month. In addition to that, there is currently no concessions and no sound or projection equipment. Now I realize there are other financial figures to consider like employees, food license, etc.

The question that I have for you, the think tank of forum members out there, is this a possibility. Are the leasing terms to high? Would finding sound and projection equipment and concession make the theater unprofitable? I am going to find some figures for the mission information to have a more accurate picture, however, with the information that I have presented, would the theater be able to make it and be profitable? I know that there are still a number of variable to be decided, I would just really appreciate any questions, comments, ideas, other costs to consider, etc. Thanks in advance for your help and assistance, especially after reading a post this long!! May your marquees never be dim and your seats always be filled.
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Re:Renovating the Edison 8; closed theater re-opening 25 Feb 2009 02:28 #30972

  • slapintheface
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The rent for that space is dirt cheap provided it is in good to fair condition.2nd run is doable .Who has those theaters in 5 mile radius?
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Re:Renovating the Edison 8; closed theater re-opening 25 Feb 2009 09:24 #30973

  • trackfood
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First of all, I'd like to thank you for actually having done some work, and provided us with some information to base a reply on. So many times, people ask blanket questions here, and haven't done any work on their own, and expect us to pull answers out of the air. That alone leads me to believe you could be more successful than others...
Depending on the condition of the building, the rent seems fair,(doesn't hurt to negotiate though). IS the theatre in a decent part of town?, or do people avoid it for various reasons? Right now there is plenty of good used 35mm projection equipment out there.There is also plenty of used concession equipment out there. Given a little lead time you should be able to acquire all the concession equipment very reasonably, (ebay is a great source for LARGE theatre size poppers at great prices,your local restaurant supplier probably has the few other things you need, ice machines etc). You can get a free quote from most equipment dealers, just tell them what your looking at doing etc. When I was working on my project, I based some figures on 3 different models, when business is slow, when business is average, when business is busy. Figure $2.00 average cents per person for 2nd run concessions which seems conservative. Figure 35% of your boxoffice revenue is going to the film company for 2nd run. Put some other costs together, and decide for yourself how many peole you need to attract per month to make the profit you desire.
Best of Luck
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Re:Renovating the Edison 8; closed theater re-opening 25 Feb 2009 10:10 #30975

  • Mike
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what is second run in my opinion: basically it will mean that you'll be grabbing the best pictures you can as fast as you can and that means as soon as they come off competitive screens. At Jacksonville Tinseltown Hiotel For Dogs is still playing and it is almost 2 months open. It will go to video May 1 or so. Point is: you have a very short time to pick up films after they are wrung dry and before they go to video. I would not define myself as 1st or 2nd run: do the best you can and see how it rolls out. You'll be able to get some things first run and others you'll have to wait for and if you give a special emphasis to art films you'll be able to get a lot of stuff. Add altyernative content, etc. and it's a go.
Michael Hurley
Impresario
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Re:Renovating the Edison 8; closed theater re-open 25 Feb 2009 16:55 #30981

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The theaters that are within the 5 mile radius include a 20 screen Regal theater and a 10 screen Marquees Cinema. The Marquee theater is across a $2 dollar toll bridge that some avoid due to the toll. Both have a ticket prices of $9.25. My current projection for the ticket price is $5. What are the thoughts/reflection on a 5$ ticket price amid a sea of $9.25 tickets?
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Re:Renovating the Edison 8; closed theater re-open 25 Feb 2009 17:05 #30982

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I would like to express my gratitude for the reply that I have received thus far. They have been helpful and insightful. The answer to the question above as to what part of town it is in, is that it in a great part of town. The town of Fort Myers and surrounding cites run along the main road, Highway 41. For the most part, Fort Myers is strung along vertically on either side of this major street. The theater is about a block and a half in from this main road. Also, it is across the street of one of the area malls. The mall is targeted at the middle class (Sears, The Gap, JC Penny's, Dillard's, etc) and popular. The benefit is that it doesn't have a movie theater within. The mall that targets the higher-class is about 4 miles down that road and has it own movie theater, the afore mentioned Regal Theater with 20 screens. I believe that the crowd that would frequent this mall would be the same people that would frequent a less expensive 2nd type theater.
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Re:Renovating the Edison 8; closed theater re-opening 25 Feb 2009 21:30 #30985

  • rufusjack
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I will also say good job on doing your homework.

A 20-plex close by will have any film doing any business for a while. When they dump it, the film will be dead. So I expect you will be a true second run.

But that does not mean you can't have some life yet. $5 might be too high. 2nd runs in my area are $3 per seat with one doing a free 46 oz corn.

I think you can get the rent down to just paying CAM costs. It would be very costly to change that space for other use.

What shape is the facility in? Can you open with any work to be done to the property? I would ask for at least 2 mos free rent (no CAM either) after you open the doors for business.

Projection equipment is dirt cheap right now (see other thread about a recent auction in MI). But how long will film be available? 5 years? So plan on a quick payback and maybe the need to stash some cash for digital equipment. Also make sure you have options to extend your lease and I would not sign any lease longer than 2 years.
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Re:Renovating the Edison 8; closed theater re-open 01 Mar 2009 15:22 #31041

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The facility is in good condition. I will be doing a walk through later this week and will post some of the pictures here for comments. I do know that there is no concession or projection/sound equipment. So, at the very least I would need to purchase and install a concessions and the projection/sound equipment. I have made a post in the "booth" section looking for advice or recommendations for the projection and sound equipment. My area of knowledge is in business and not in the technical area. Any and all information that you could provide on projection/sound equipment would be appreciated and treasured. Thanks in advance for your help.
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