Boxoffice (Oct-Dec 1962)

THEATRE CONSTRUCTION BOOM IS NOW A $207,030,000 STORY TO A Handbook Features a Section On Shopping Center Theatres Twice As Many Indoor Theatres As Drive-Ins, TOA Survey Reveals MIAMI BEACH — There’s a theatre construction boom going on and it is a $207,030,000 story. Registrants at the Theatre Owners of America convention, now arriving for the grand opening Wednesday (7), are being informed of the boom in the convention handbooks which are being handed to them when they sign in. TOA has been making a year-long survey of new construction and remodeling of theatres and has incorporated the facts and figures disclosed by Boxoffice in its issues of May 7 and August 6, bringing the data up to date as of now. COVERS TWO-YEAR PERIOD American exhibitors in the span of 24 months have built or will build 278 new theatres and are spending at least $157,030,000 to build them. And, conservatively, they are spending an additional $50,000,000 to remodel, refurbish and renovate existing theatres. According to TOA, they are building twice as many conventional theatres as drive-ins: 183 against 95, completely reversing the drive-in building push of the last decade. Sixty-five of the 183 new theatres, almost one -third, will be in shopping centers, clearly pinpointing a new trend in theatre construction. Twelve of them will be super-Cinerama theatres. The new construction will add eight per cent to the old $2,500,000,000 investment in theatres. And it will add two per cent to the old total of some 16,500 American theatres, TOA contends. As TOA points out, it is an exciting story, particularly when viewed in perspective. The building program is going on despite the acute product shortage, television competition, loss-tinged operation of many smaller theatres and soaring operating costs. BOOM IN LONG ISLAND Breaking down the survey, TOA reveals that if any single area is to be singled out for a tremendous theatre boom, it is suburban Long Island. In this area where home building has mushroomed in a decade, 29 new theatres have or are being built since the start of 1961. It enabled New York State to show the greatest growth, 48 new conventional theatres and eight new drive-ins for an estimated total investment of $32,142,000. California, according to the TOA survey, is a near second with 30 new conventional theatres, 19 new drive-ins and an estimated investment of $27,690,000. In all, TOA reports, there were only 12 of the 50 states in which new construction was not reported, yet each of the 12 was in the “renovation and repair” columns. TOA is of the opinion that the great activity in shopping center theatres reflects a move by theatre owners to go where the population is growing. Most of these shop MIAMI BEACH — The Theatre Owners of America convention handbook, to be distributed to those attending the annual TOA convention here next week, features a special seven-page section devoted to the successful construction and op>eration of shopping center theatres by Wometco Enterprises of Florida — suggested as a guideline for theatre owners who are contemplating such theatre operation. Pointing out that the shopping center theatres are proving more profitable for Wometco than its conventional downtown theatres or its driv«-ins, the handbook story relates that the circuit is building de luxe, first-rim, 1,200-seat theatres in major shopping centers for a low cost of $250,000. It also details the shopping center rental provisions which are low enough to enable the theatre to pay more for film. The first of Wometco’s shopping center houses, the 163rd Street in the big 163rd Street Shopping Center at Miami, is the prototype for three others, two being blueprinted for Miami and Nassau in addition to the Palm Springs Theatre in the Palm Springs Shopping Center in the Hialeah section of Miami. This latter theatre, by careful planning, imagination and elimination of unnecessary frills, will be built for $230 per seat, at a total cost of $220,000, including everything except booth equipment, sound, screen, curtain, seats, vending machines, boxoffice equipment and manager’s office furniture. 'The cost includes even the 24x36foot sign across the front of the house. Information for the handbook section was provided by Mitchell Wolfson, president of Wometco and past president of TOA, in the belief that the Wometco experience can be of benefit to the industry. Wolfson said shopping center theatres can be profitable if costs of the theatre are kept down so that amortization will be nominal and maintenance minimal and if theatre owners know they can obtain, and hold out for, rental terms which enable them to operate profitably. Wometco operates under rental terms of 8 per cent of gross admission, 12 1/2 per cent of gross concession sales, with an annual guarantee equal to 10 per cent of the money spent by the shopping center owner on the ping centers are in or near major cities; in fact, construction reported in or near major cities far outpaces building slated for less populated areas. A notable leader in this field is the General Drive-In Corp., which has 14 new shopping center theatre projects started or blue-printed. Another major contributor to the construction is Martin Theatres, with eight new Cinei-ama theatres. The other Cinerama houses will be built by Lockwood & theatre shell, but not including the land. In addition, a limit in the $1,000 to $2,000 range is provided for any increased taxes and common charges levied by the shopping center for parking area maintenance, utilities, etc., with any additional charges to be deducted only from excess percentage rent payment. A clause in the lease provides that for special attractions (defined as those for which admissions are 25 per cent higher than the average basic price in effect for the preceding six months), the theatre rent is computed after deducting all direct costs for the special attraction. Wometco is limited to eight such attractions in any one lease year, and without the written permission of the landlord may not continue in the aggregate for more than 90 days in any one lease year. Wolfson said he believed that other theatre owners could obtain similar terms and, by so doing, would tend to make these terms standard for the coimtry. Shopping center theatres, the article added, have proven to be the best medium to bring people to a shopping center. “They attract more patronage than bowling alleys, bars or restaurants ; they serve to publicize the shopping center, particularly if the theatre has the same name as the shopping center (which Wolfson recommends) , and they bring people to the shopping center in the off hours of the evening. “Equally important to the profit ledger for the shopping center theatres is the low construction cost. Wometco has proceeded on the theory that the picture, the sound and the seats must be the best. It does not short-cut on materials, but eliminates all frills, false walls, decorations, etc., which are not necessary to comfort or operational efficiency. It is willing to spend more for certain materials, if the results will reduce maintenance or replacement. “It believes that standard theatre plans are no longer feasible; each theatre must be planned to suit the area for which it was designed. It feels wall decorations are not important; such splash should be in those public areas which the patrons see coming in or leaving the theatre. It strives for a combined lobby-foyer area to reduce construction costs, and eliminates ‘false walls’ whenever possible.” Gordon of Boston, Cooper Foundation of Nebraska and National General Corp. of Los Angeles. In summaiT, TOA stated; “The nearly one quarter of a billion dollar total should stand as a shining refutation to those prophets of doom who call om's a dying industry. Any business investing more than $207 millions in new plants is a vital, exciting operation, one which feels it has a great futm’e.” BOXOmCE :: November 5, 1962 7