Exhibitors Herald (1927)

March 19, 1927 EXHIBITORS HERALD 15 Means of Theatres page 9) includes land, building, furnishings, financing costs and fees represents 100 per cent. Then you may reasonably expect to obtain a first mortgage or first mortgage bond issue of 60 per cent. This leaves 40 per cent difference to be made up and it is customary for bankers or bond houses to supply an additional 20 per cent of the whole which is secured by a second mortgage on the project. Thus you will have 60 per cent from one source and 20 per cent from another or a total of 80 per cent leaving a balance of 20 per cent for you to put in. Your banker or bond house will necessarily charge you more commission on the second mortgage than on the first mortgage as obviously the former has a much less margin of security and is, therefore, more hazardous — and cannot be resold to the same class of investors or at the same rate as the first mortgage. Let us consider the debenture certificate to sub-contractor’s plan. A debenture certificate is simply a written promise to pay out of the earnings of your theatre project certain sums at certain intervals. Its proper use will prove very valuable to you in supplying a necessary part of the financing if handled as follows : Ist— Plan to start your building in the dull sea* son for the sub*contractors, as this has a very deh* nite bearing on the success of the plan. 2nd— Have your architect get estimates from the various sub-contractors on their parts of the work. These first estimates^ of course, will be based on their understanding that you are to pay all cash for the work and, therefore, will be valuable as a guide to the fairness of their final estimates based on their accepting as part payment for their work your Debenture Certificates. The Advanced Rental on Leased Space Plan Assuming that the exhibitor, in order to have a well founded, sound project, has added to his theatre proper a number of stores and offices, let us analyze them and see where they can be made to aid the financial scheme as a whole. In the first place these stores, if the theatre is well located, constitute the most valuable stores in town as they will receive the benefit of the passing hundreds and hundreds of people that are attracted daily and nightlv to the theatre. Now in every town or city you will find a few outstanding stores or shops who have made a substantial success — go to them, sell them on the idea of wanting a store in your building — near your theatre and explain to them what the passing hundreds of people mean to them in added profits, create a desire for your stores and you will have no trouble in leasing them for ten years in advance, for you can make the prospective tenant see why he should enter into a long term lease in order to capitalize and cash in on his location. The next step is to get your tenant to put up the tenth year’s rent in advance on which you will pay him the prevailing rate of interest. For example, we will assume that you have sold a druggist on the idea that he should lease the store nearest your theatre entrance on a basis of $150.00 per month or $1,800.00 per year, show this druggist that every month his lease is increasing in value, yet for ten years, if he signs up on a lease, his rent will not he raised, for this privilege you ask that he deposit the tenth year’s rent in advance 5 The soft play of light that enhances interior beauty increases attendance — prompts a return to the theatre that gratifies one’s sense of the beautiful and supplements KofVi Hrama and orchestra. .\Aw: If you are contemplating the erection of a new theatre or the remodeling of an old one, get all the information on the latest Wurdack Remote-Control Switchboard, with its many new and exclusive features. Write The Wurdack Remote-Control Switchboard represents the accomplishments of modern engineering applied to artistic lighting .... it achieves the zenith of effectiveness and variety of effects. WmU/TJKDACK ELECTRIC MFC. CO. 13-21 S. ELEVENTH ST. ST. LOUIS, MO. Chicago Kansas City Omaha Minneapolis Dallas New Orleans Louisville