Struggling movie theaters see state grants as right ticket
Local movie theater owners across the state who have spent a tense year watching their revenue drop to nearly zero hope new legislation offers financial relief.
A bill introduced March 16 by state Rep. Rob Nosse, a Portland Democrat, would fund state grants for movie theaters hard-hit by the COVID-19 pandemic shutdown. House Bill 3376 provides the Oregon Business Development Department $8.7 million to create a grant program for indoor movie theaters. Grants could be $50,000 per movie theater, plus $10,000 for each screen, if theaters have more than two screens.
A handful of theater owners told the House Committee on Economic Recovery and Prosperity Thursday morning, March 25, that the legislation would be a financial lifeline. After an hour of testimony, Chairman Rep. John Lively delayed a committee discussion of the bill to April 6, saying HB 3376 "starts the conversation" but still needed clarification about grant limits and which theaters would be eligible for state funds.
"We've heard you," said Lively, a Lane County Democrat. "You have a legitimate question and concern. This bill starts that conversation. What we hope to do between now and early April is identify what the best path would be to try to address the issue, whether through amendments to this legislation or some other process."
Members of the Pacific Northwest Theatre Owners Association approached Nosse in the past few months about providing some state financial help. A handful of other states and cities have provided similar grant programs to theater owners.
Nosse's bill could give grants to all theaters in the state, including large chains like Cinemark and Regal. Nosse said the bill could be amended to "just focus on theaters that are small and primarily locally owned."
Will state grants be enough to keep some struggling local theaters afloat? Absolutely, says Tom Ranieri, owner of Portland's Cinema 21. "Basically it was a wipe-out year," he said. "Getting that money, if it comes, we feel like it would be a lifeline for us. It could help stop the flow of red ink and hopefully let us make it to the other side of this."
Drew Kaza, owner of Sisters Movie House in Central Oregon, sees hope in the legislation. He doesn't like the look of small theaters' future in the state without financial assistance.
"We're on the brink of dying," Kaza said. "If we don't want to see movie theaters become extinct in this state, we need to do something to help them."
Even if state grants are provided, both Ranieri and Kaza said the next few months could be a wild ride for independent theater owners because of limited first-run film releases and competition from streaming services.
"I really think we're going to have a rough patch between April and September since nobody knows what's going on," Ranieri said. "We're going to take baby steps to return to some sort of normalcy."
Fees stay the same
It's been more than a year since Gov. Kate Brown signed executive orders 20-08 and 20-12 as part of COVID-19 safety measures. The orders effectively shut down indoor movie theaters, live theaters, restaurants, bars, pubs, gyms, barber shops and similar businesses. Some restaurants and pubs were able stay afloat by offering takeout food but no indoor dining.
Movie theaters, especially small independent theaters, weren't so lucky. Unless they could sell popcorn, candy and soft drinks through the front doors, they weren't operating.
It didn't sit well with many theater owners as they watched nearby restaurants and pubs reopen with limited indoor seating.
"My business wasn't allowed to operate even when restaurants and other businesses were," said Jeff Martin, owner of Tigard's Joy Cinema. "The Joy Cinema was, in fact, the only business on our stretch of (Highway) 99W that was ordered to not operate by the state through the entire course of the lockdown. Yet my fees to the state, city and county have remained the same as always."
Newberg's 350-seat Cameo Theatre wasn't able to show movies, but owner Brian Francis sold concessions on weekends to make a little money. Francis also operated the 99W Drive-in Theater with about 50% capacity, which helped keep his company's head above water.
That little bit of revenue won't be enough for his two theaters to survive, Francis said. "We would be very much in favor of this bill," he said. "For example, our downtown indoor Art Deco Cameo Theatre, through all of the periodic openings and closures, managed to attract about 3,400 paid admissions in 2020, which was down a shocking 14,050 admissions over 2019."
Other theater owners tell a similar story. Kaza's four-screen, 315-seat Sisters Movie House, which includes a small café, has seen its revenue drop about 93% in the past year. Ranieri's Cinema 21, which expanded seven years ago to three screens and about 600 seats, was able to host private showings through part of 2020, but that ended in mid-November and didn't bring in enough revenue to keep the doors open. He hopes to continue private screenings through March and reopen to the public in late April, in time for the summer movie season and the Oscars.
Bruce Humphrey, whose Destiny Entertainment Corp. owns theaters in The Dalles and Hermiston, said his revenue for most of 2020 dropped 90% compared with 2019. The theaters' drive-up popcorn sales were their only source of revenue for months.
William McElderry of Skylight Entertainment Inc., owner of the Hood River Cinemas, said his revenue dropped about 97% last year. "All our theater employees are gone," McElderry said in testimony submitted for the committee hearing. "We have no guarantee that 'normal operations' will return anytime soon. The goalpost has moved so many times that we really have no clear picture when, or even if, we can open and cover costs, let alone make a profit."
Several independent theaters turned to crowd funding to stay in business. Florence's City Lights Cinemas raised more than $70,000 through a GoFundMe campaign to keep its doors open. Salem Cinema also raised about $40,000 of a $66,000 GoFundMe effort. Studio One in Southeast Portland has raised about $40,000 of its $125,000 goal.
A GoFundMe campaign also raised $12,000 in May 2020 to help laid-off Portland-area theater workers.
Need some relief
Independent theater owners threw their support behind HB 3376. More than 130 people, most of them theater owners or employees, submitted testimony in favor of the measure prior to the March 25 hearing.
Act V Theaters owner Robert H. Perkins III of Beaverton, which operates the Cornelius Cinemas and owned the now-shuttered Forest Theater in Forest Grove, said the legislation would be important to keep the small businesses open.
"My company is pretty much at the breaking point," Perkins said. "But I am determined to see this crisis through.
"HB 3376 is vital to the success of my company, and probably to all Oregon movie theater companies."
Leah Tillotson, co-owner of St. Helens' Columbia Theater and the Mt. Hood Theater in Gresham, said support of HB 3376 should reflect the public's support for local, independent theaters.
"The people of Oregon have always supported these historic one-screen theaters," she said. "We will need help if we are going to make it. Oregon would not be the same place without these unique and valuable theaters."
Joy Cinema's Martin said adopting HB 3376 was "only one step toward bringing independent cinemas back to life."
"Cinemas are businesses that add color and life and promote commerce in our cities and neighborhoods," he said. "A cinema that's open and thriving does a huge amount of good for a community."
Ranieri was hopeful that "legislators would come through for us."
"When it's just week to week of the same thing, it's a weight bearing down on you," he said. "We've been staring this in the face just about one year now. We need some relief."
Federal funds for some
HB 3376's possible grants aren't the only source of funds that local theater owners could tap. Federal and state programs adopted last year offered millions in funds for small businesses like indoor movie theaters. The $349 billion Paycheck Protection Plan included in the March 2020 Coronavirus Aid, Relief and Economic Security Act, provided funds to keep small-business employees on the payroll. In mid-July 2020, Oregon lawmakers allocated $50 million of the federal funds to theater venues and other cultural groups. Indoor movie theaters weren't included in the program.
Ranieri and Kaza said the PPP funds didn't offer much help to independent movie theaters because they usually don't big payrolls. "Unlike restaurants, we don't have a high number of employees," Kaza said. "But we still have fixed costs."
In the amended federal CARES Act, adopted in early March, independent indoor movie theaters could be in line for part of the $16.25 billion Shuttered Venue Operators Grant program. Applications for the program should be available beginning April 8 through the U.S. Small Business Administration. Indoor movie theaters forced to close during the pandemic could be eligible for grants of up to 45% of their gross 2019 revenue through the program.
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