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This topic comprises 4 pages: 1 2 3 4
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Author
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Topic: Senator Theatre heading for foreclosure
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Steve Guttag
We forgot the crackers Gromit!!!
Posts: 12814
From: Annapolis, MD
Registered: Dec 1999
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posted 02-07-2007 08:18 AM
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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Stephen Furley
Film God
Posts: 3059
From: Coulsdon, Croydon, England
Registered: May 2002
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posted 02-18-2007 05:20 AM
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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Frank Angel
Film God
Posts: 5305
From: Brooklyn NY USA
Registered: Dec 1999
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posted 02-18-2007 08:24 AM
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.
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