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Author Topic: Senator Theatre heading for foreclosure
Steve Guttag
We forgot the crackers Gromit!!!

Posts: 12814
From: Annapolis, MD
Registered: Dec 1999


 - posted 02-07-2007 08:18 AM      Profile for Steve Guttag   Email Steve Guttag   Send New Private Message       Edit/Delete Post 
Well this is sad news to many fans of the historic Senator Theatre in Baltimore.

Article from the Baltimore Sun

quote:
Sun Reporter
Originally published February 6, 2007
The Senator Theatre, one of the last of the nation's once numerous art deco movie palaces and the only one still showing films in Baltimore, is to be sold at a foreclosure auction Feb. 21.

Tom Kiefaber, the Senator's owner, acknowledged yesterday that he is $90,000 in arrears on a $1.2 million mortgage he took out on the 900-seat theater five years ago.



"I'm extremely concerned that I'm about to lose my theater," said Kiefaber, 54, who also owns the two-screen Rotunda Cinematheque and whose family long ago owned dozens of movie houses in Baltimore.

The Senator, at 5904 York Road, with its plush seats, 35-foot ceilings and elaborate murals about the history of entertainment, is on the National Register of Historic Places.

Kiefaber, who has faced financial troubles with his theaters before, said 1st Mariner Bank, which holds his loan, believes the Senator "should change hands."

Eugene A. Friedman, the bank's in-house counsel, said that he would have preferred to avoid foreclosure but that Kiefaber has been in default since summer.

"Mr. Kiefaber is a man dedicated to his livelihood," Friedman said. "He's a very nice person to talk to. We wish it would have gone differently."

Larry Hofmeister, a lawyer retained by the bank to handle the auction of the Senator, said Kiefaber has time to make things right. "We're hopeful that Mr. Kiefaber can reinstate the loan, to make it current," Hofmeister said. "We would be very happy if that happened."

Anyone interested in bidding on the ornate single-screen theater, built in 1939, might take note of the current economics of film exhibition, which dictate that it be centered in multiplexes that attract a steady flow of viewers to several films showing concurrently.

"How would you operate it?" James "Buzz" Cusack, principal owner of The Charles Theatre and the Senator's most avid competitor for independent movies, asked of a hypothetical new owner. "With that amount of debt, that's very difficult."

Either way, he said, the auction of the Senator is "a terrible thing."

"That is not good when something fails like that," Cusack said. "It must be terrible for Tom, personally, although he can usually find a way to bail himself out."

Kiefaber was less sure, but he implied that he might come up with a solution.

"I have not dedicated my life to preserving The Senator Theatre for the enjoyment of future generations only to throw in the towel at this stage," he said.

Still, Kiefaber said, he is battling the tides of modern-day economics.

'Bewildered'
"I'm bewildered by what's going on," Kiefaber said. "I feel like I've been walking a tightrope for 18 years."

Kiefaber was referring to the struggle to remain competitive since he purchased the Senator from his family's theater business, Durkee Enterprises, in 1989. The company was founded in Baltimore almost a century ago by Frank Durkee, Kiefaber's grandfather, and at one point owned more than 40 theaters, at a time when there were more than 170 movie houses in the Baltimore area.

Durkee built the Senator, with a circular upper structure of glass blocks and limestone, at a cost of $250,000. At night, fluorescent lamps behind the glass provided a multicolored lighting effect, according to Robert Kirk Headley Jr. in his 1974 book Exit: A History of Movies in Baltimore.

The theater had gold and silver curtains, damask walls and a circular lobby with terrazzo floors. It opened to the public Oct. 5, 1939, with Stanley and Livingstone, starring Spencer Tracy and Nancy Kelly.

City aid unlikely
City officials, who have come to the Senator's aid in the past, say they are unlikely to do so again.



Andrew Frank, deputy mayor for economic development, said last night that Baltimore Development Corp. gave the Senator a $20,000 grant years ago for repairs that enabled it to showcase special effects in a Star Wars movie.

Later, the city, the state and the Abell Foundation funded a $180,000 payment to the Senator, which sits across York Road from recently renovated Belvedere Square. The city's contribution was a loan that called for repayment from the theater's revenues, and it has not been repaid.

More recently, in 2002, the city, through its development arm, agreed to guarantee half of 1st Mariner's $1.2 million loan to Kiefaber to renovate and reopen the Rotunda, which had been closed for more than a year under other owners, and to help shore up the Senator. Kiefaber also put up the Senator, his home and other real estate as collateral, he said.

Frank said it is unlikely that if the bank fails to cover its loan at the auction, the city will be liable for its share of the loan guarantee, $600,000, given the other collateral available.

"I'm confident that it will not be the full amount, and I'm hopeful that it won't be a significant amount," Frank said.

'Sad turn of events'
In any event, said Frank, 40, who remembers going to the Senator as a child to watch movies, the proposed auction is "a sad turn of events."

"Mr. Kiefaber has worked tirelessly over the years to buck the trend toward multiscreen theaters," he said. "And, largely to the credit of Mr. Kiefaber, the Senator is an institution and an anchor in that community. It's a critical piece of real estate on York Road. It was always a treat to see a movie on the big screen at the Senator, and it still is."

nick.madigan@baltsun.com


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Bob Maar
(Maar stands for Maartini)


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From: New York City & Newport, RI
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 - posted 02-07-2007 08:42 AM      Profile for Bob Maar   Author's Homepage   Email Bob Maar   Send New Private Message       Edit/Delete Post 
Steve, Sorry to read the bad news. A lifetime ago (1962) when I was working in Baltimore at the Town Cinerama Theatre I use to love to visit the Senator Theatre. Hopefully, another theatre chain will purchase this house and continue to employ Tom Kiefaber, so the theatre continues.

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Bobby Henderson
"Ask me about Trajan."

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From: Lawton, OK, USA
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 - posted 02-07-2007 09:08 AM      Profile for Bobby Henderson   Email Bobby Henderson   Send New Private Message       Edit/Delete Post 
If the Senator is to remain in operation whoever ends up operating it will need to think outside of the box when it comes to the business model. One idea that comes to mind is having the place function as a movie museum of sorts.

One of the worst things that could happen would be some big chain buying out the theater just for its name and then gutting the insides to convert in into yet another unremarkable multiplex. The Senator needs to remain operating as a high end single screen palace. There are too few left in this nation.

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Kenneth Wuepper
Phenomenal Film Handler

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From: Saginaw, MI, USA
Registered: Feb 2002


 - posted 02-07-2007 01:53 PM      Profile for Kenneth Wuepper   Email Kenneth Wuepper   Send New Private Message       Edit/Delete Post 
Does Bill still work there as head of projection? He came to Sginaw many times to run films in our booth for the Great Lakes Cinephile Society festivals. A wonderful gentleman and a true perfectionist.
KEN

[ 02-07-2007, 09:12 PM: Message edited by: Kenneth Wuepper ]

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Steve Guttag
We forgot the crackers Gromit!!!

Posts: 12814
From: Annapolis, MD
Registered: Dec 1999


 - posted 02-07-2007 05:07 PM      Profile for Steve Guttag   Email Steve Guttag   Send New Private Message       Edit/Delete Post 
Yes, Bill is still there.

Steve

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Steve Guttag
We forgot the crackers Gromit!!!

Posts: 12814
From: Annapolis, MD
Registered: Dec 1999


 - posted 02-17-2007 10:12 AM      Profile for Steve Guttag   Email Steve Guttag   Send New Private Message       Edit/Delete Post 
In case those have not visited the Senator site. It is www.senator.com

There you will find they are soliciting donations via paypal or checks. They seem to keep it pretty current as to how much money they have raised (just over $62K as of when I posted this).

Steve

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Bill Enos
Film God

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From: Richmond, Virginia, USA
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 - posted 02-17-2007 07:06 PM      Profile for Bill Enos   Email Bill Enos   Send New Private Message       Edit/Delete Post 
Unless Mr. Kiefaber changes the operation to reduce expenses, and increases attendance to the point where the he can make the mortgage payments this is just a temporary bail out and of dubious long term value. Maybe he can create a non profit to do a real fund raiser and buy the theatre from him and pay off the bank. Of course to do this he would need to be out of the non profit and probably the theatre operation to avoid the appearance of impropriety.

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Steve Guttag
We forgot the crackers Gromit!!!

Posts: 12814
From: Annapolis, MD
Registered: Dec 1999


 - posted 02-17-2007 09:58 PM      Profile for Steve Guttag   Email Steve Guttag   Send New Private Message       Edit/Delete Post 
Bill,

Personally, I agree (temporary) though I dontated anyway. What the Senator needs despareately is more screens. It needs to be at least a 3-plex to have the best chance at keeping the big theatre filled and profitable.

I know he has looked into non-profit and other avenues but I suspect there is a control thing with him. It is his theatre and he doesn't want to loose that.

BTW...the bank note due to avoid foreclosure has raised to $109K rather than $93K...I wonder what that is all about (probably something dumb like don't forget...the $93K brings you current for your back monies...you have to pay this month's too!).

I'm a bit impressed at the money raised in such a short time. They have topped $73K!

It would seem to me that if they put up the fund raiser about once a month or so...they would have that pesky bank note paid off in no time [Wink]

Steve

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Bill Enos
Film God

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From: Richmond, Virginia, USA
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 - posted 02-17-2007 10:45 PM      Profile for Bill Enos   Email Bill Enos   Send New Private Message       Edit/Delete Post 
People will chuck in a few bucks to help him stay open a couple times but they won't and shouldn't do it if he can't resolve the problem and continues to look for handouts for his private business. Sounds like he's screwed himself. Perhaps after the eventual foreclosure a non profit will materialize to buy the Senator from the bank.

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Anslem Rayburn
Master Film Handler

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From: Yuma, AZ, USA
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 - posted 02-18-2007 04:48 AM      Profile for Anslem Rayburn   Email Anslem Rayburn   Send New Private Message       Edit/Delete Post 
I have to ask... What happens to all the money donated if they don't reach their goal?

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Stephen Furley
Film God

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From: Coulsdon, Croydon, England
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 - posted 02-18-2007 05:20 AM      Profile for Stephen Furley   Email Stephen Furley   Send New Private Message       Edit/Delete Post 
quote:
BTW...the bank note due to avoid foreclosure has raised to $109K rather than $93K...I wonder what that is all about (probably something dumb like don't forget...the $93K brings you current for your back monies...you have to pay this month's too!).

$16k per month, does that sound about right; it does seem possible, given that the total due was $93k. They stand a good chance of raising the $93k by Wednesday, given the progress so far, but I doubt they will make the $109k.

We don't know the full facts, but there are indications that the aim of the bank is to get him out, rather than just to recover the money due. They have given him only the legal minimum of notice, have given no indication they would consider granting an extension, despite the indications that given an extra week or two he could clear the arrears, and could probably pay off at least 75% of them by Wednesday. If the extra $16k is the payment due for this month then it will be only slightly overdue, but they are insisting that this is also paid by Wednesday. There was a statement somewhere, but I can't find it at the moment, I think it was by a lawyer for the bank or something; which said something like: He's a nice guy, but they feel that there should be a change of ownership. The Theatre claims that they have recently resolved the problem which was preventing them from showing many of the films they wanted to in the past; I'm somewhat doubtful about this, in my experience you do better by showing films which are not available elsewhere nearby, rather than trying to compete with another local theatre for the audience for the same film, unless it's a very popular film, which could bring in good box office for both theatres. Direct competition for the same film tends to result in neither ther theatre getting a good audience for it.

If the bank seriously wanted the loan repaid then they would probably accept the payment of most of the arrears now, offer a short extension for the remainder, and give the theatre a chance to show that they are able to make future payments as they fall due, and possibly negotiate a re-scheduling of the remainder of the loan to reduce monthly payments somewhat, though obviously at greater overall cost, and thereby bringing in extra money to the bank. This seems like a pretty strong indication that the real aim of the bank is now to get him out, and they will put whatever obstacles they can in his way to prevent the loan from being repaid in time, and will continue to do so in future, should he succeed in reaching the Wednesday deadline. Of course, we haven't heard the bank's side of the story; maybe they were prepared to help, but the guy wanted to use a scare story to get people to donate; we don't know.

quote: Steve
What the Senator needs despareately is more screens. It needs to be at least a 3-plex to have the best chance at keeping the big theatre filled and profitable.
Why do you say they need extra screens; there are plenty of successful independent single-screen cinemas in London? There are also some which are struggling, but could almost certainly do better, if they had better programming. Many manage to obtain additional income other than from box office and bar receipts, etc. Also, where's he going to find the money to build, equip and staff extra screens at the moment? He'd have to borrow it, which, in the present circumstances would be difficult, and even if he managed it, expensive. A new owner might be able to put together a business plan which involved building extra screens, but if the present owner does manage to keep the theatre then I think he will need to make a success of the current operation before he would be able to even consider adding extra screens. Has he tried putting on special events, getting private hire work, letting the place out for use as a film/TV location, raising ticket prices somewhat, but then giving a discount to people who book tickets for several films at the same time?

If there was a bit more time I'd send a donation, but I've had a bad month, my bank account is overdrawn by a few pounds, and I don't get paid until Friday; if he can get an extension for a few days, they I will send something.

What he should have done is to try to resolve the problems earlier; he's probably left it too late now. If he should manage to meet the Wednesday deadline, then he must address the real problem, or he will find himself in the same position again.

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Steve Guttag
We forgot the crackers Gromit!!!

Posts: 12814
From: Annapolis, MD
Registered: Dec 1999


 - posted 02-18-2007 07:04 AM      Profile for Steve Guttag   Email Steve Guttag   Send New Private Message       Edit/Delete Post 
I think he will make his $109K by the due date. I don't think people will donate a few times...not like this. It might be possible to have a fund raiser(s) but people will grow tired of throwing money into the bottomless pit.

I think all agree that the business needs to operate and support itself right now and not talk about how if this or that changes, we will be doing okay. I still cliam that his only way to make the Senator viable from a business stand point, is to add screens like was planned years ago. If he had the Ambassador and the Blue Mouse (they even named the additions) they would be doing much better.

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Frank Angel
Film God

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From: Brooklyn NY USA
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 - posted 02-18-2007 08:24 AM      Profile for Frank Angel   Author's Homepage   Email Frank Angel   Send New Private Message       Edit/Delete Post 
In a theatre like this, there could be ways to add screens and not necessarily touch the main theatre. At the Loew's Kings here in Brooklyn, one of the proposals looked into the possibility of utilizing the basement, which was big enough to house a full-sized basketball court, to add three additional screens. It was very do-able. There was a small storage area that would be converted into a 80 seat theatre as well.

Also the idea of thinking outside the box is key -- he needs to market the uniqueness of the theatre -- its remarkable archetecture. He needs to be proactive in offering it as a venue for things like movie shoots which are very lucrative -- The Loew's had commercials shot on its stage, some TV shoots in the theatre proper as well. The idea of a movie museum can be very workable (and lucrative) concept, especially if it is done in conjunction with the local tourist board.

With an auditorium of that cap, it could easily be rented as a space for things like corporate meeting, church services. We have the Police and Fire departments both renting our theatre for their ceramonies, graduations and even their induction process which lasts for three days, three times a year. The publicity along that these create what with the mayor and borough president attending and being key-note speakers is priceless.

And then there are high school graduations -- we rent out theatre for more than 60 graduations every summer. Having a large capacity hall that is probably bigger than most local school auditoria makes it a much coveted venue -- we have schools fighting to get dates in our theatre every June. We run them like a assembly line starting at 8am and stacking 3 or 4 a day, back-to-back.

What about bus-and-truck performances? I don't know if they have a proscenium stage at the Senator, but if there is a stage, there is very little in the way of in-house production costs involved with booking in tourist-trap live shows. We do it all the time (we are not proud of it, but it keeps our doors open -- never under-estimate the drawing power of schmaltz). The company comes in with pretty much everything that is needed to mount a show, save the electical hookup; if it is marketed correctly and depending on the local demographics there, that could be a way to generate big chunks of income. Two a year might be all that is needed to make a big dent in mortage payments.

We have a tie-in with a group called Hospital Audiences -- they basically four-wall the place and bus in their patients for an afternoon "out." We also have MovieTime -- a deal we make with schools where they bus in there school kids during the morning and we run kiddie fair. Get someone to volunteer to create "Study Guides" and you've created a "educational event" that schools eat up. You would be surprised how teachers scrabble to get this on their roster -- they fight to get the schools to approve because, hey, it's a day out of the classroom for them.

And the list goes on; you just need to start being crative about what can be done in this venue.

It seems that Tom Kiefaber's heart is in the right place, but he's stuck in a business model that just isn't working. It is always tempting to do what you've always done, but the reality is that the economics change and you can't run a single screen as if it were 1960. You can't run your theatre like it was run when you were a kid, as romantic as that might seem to be, and so it seems that's what he's been trying to do. He hasn't made adjustments to the changes in the economics of his business. And those changes don't mean just doing what the successful guys do, i.e., multiplexing and thus distroying the one advantage his theatre has over the other multitude of multiplexes -- its aesthetic uniqueness and character -- commodities that he needs to exploit. It means he's got to look past how this theatre was operated when he was a kid; you can't go back there. But you can go forward and incorporate new business concepts that will allow that single screen to continue to run film as a single screen and as the unique theatre that is its soul. But he has to get proactive, possibly bring in one or two other people who can market and promote his beloved theatre.

Then again he can just put in a digital projector and that will fix everything. [evil]

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Bill Enos
Film God

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From: Richmond, Virginia, USA
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 - posted 02-18-2007 10:39 PM      Profile for Bill Enos   Email Bill Enos   Send New Private Message       Edit/Delete Post 
The exclusive art/old film format obviously isn't working well enough to support a barn that size. The real difficulty is determining what else and how much he can do without pissing off the present audience, or is that audience large enough to be concerned about? Even after the foreclosure and auction sale he'll likely still be liable for the difference if the auction doesn't bring enough to satisfy the note. Don't blame the bank for his lack of business accumen, this is purely business, sentimentality can't change it.

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Steve Guttag
We forgot the crackers Gromit!!!

Posts: 12814
From: Annapolis, MD
Registered: Dec 1999


 - posted 02-19-2007 07:46 AM      Profile for Steve Guttag   Email Steve Guttag   Send New Private Message       Edit/Delete Post 
Bill, as of this morning he has topped $85K...based on his money/day...he will probably make the $109K by the deadline. If it had stayed at $93K, he would have for sure made it.

Steve

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