Movie Multiplexes Prefer to Cozy Up to Retail

Hope springs eternal. In today’s market-driven economy, for commercial development to sprout and flourish it takes much stronger fertilizer.

For years, residents of the blue-collar northeast San Fernando Valley have stewed about the lack of easy access to a variety of modern amenities that residents of other areas take for granted--shopping malls, major restaurants, movie theaters.

Now comes word that the tiny city of San Fernando has secured a “letter of intent” from an unnamed theater chain to build an 18-screen megaplex somewhere in the downtown area.

It’s not a signed contract, it’s not a done deal, but it’s something. And in a community--and a region--that hasn’t had much of anything to brag about, it’s definitely better than nothing.

Things have changed since “Forever Amber” premiered at a San Fernando theater in 1947, to a drumbeat of religious protests over its supposedly scandalous screenplay. No premiere would be possible today.

“In the city of San Fernando there are no screens,” lamented John Ornelas, San Fernando’s city administrator, who used contacts accumulated during 20 years of economic development to help initiate the potential deal. “It’s been that way for 20 years.”

About the proposed facility, he said “We’re talking state-of-the-art, stadium seating. We wanted . . . a state-of-the-art facility that the other well-off communities have.”

That sentiment--”we want nice things too”-- may be at the emotional heart of the matter when nor’easters bemoan their region’s dearth of development. And that’s understandable. It’s hard to look across the fence, or across the freeway, and see bright lights and music when you have none.

But there’s more at stake here than a mere pleasantry. A theater, especially today’s mondo-complexes, can be the kind of economic engine that helps breathe new life into a community with flagging financial fortunes by helping satellite businesses--restaurants and coffee shops--take root.

Richard Long, manager of the Spoons restaurant in Burbank, saw a definite increase in his business when the AMC chain opened a sixplex nearby. Now, patrons from nearby movie theaters account for fully 20% of his business.

So we should all join San Fernando in hoping that this is a keeper. We should send good karma, invoke the beneficence of the universe and, above all, if it comes to pass, we should support it.

Wishes and hopes are nice. Patrons are better.

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In some respects the trend in the movie industry today toward ever more luxurious and expensive theaters works against the northeast Valley and other areas with screen deficits.

Chan Wood, executive vice president of the Los Angeles-based Pacific Theatres chain, said it can cost $25 million or more to build a fully equipped megaplex today.

Given the cost, said Wood, “you can’t put them up every couple of miles or you’d be on top of each other.”

With that kind of cash outlay, more theater developers are focusing on high-income areas. Movie screens in the Valley, for example, form a kind of lopsided doughnut, clustering in areas like Burbank, Granada Hills and Encino. But in the stretch from Sylmar to Sun Valley, there’s nary a screen. A similar blank space stretches across the Valley floor, west of the 405, leaving out areas like Reseda.

Land mass is said to be partly to blame.

These days in the movie business, size does matter. It took nearly 30 acres to accommodate Pacific’s Winnetka 20--land the company already owned as a drive-in.

“You have to build where space is available,” said Phil Zacheretti, a spokesman for the nation’s largest theater chain, Regal Cinemas, which boasts 3,580 screens in 400 locations.

“We still build a few 10- and 12-screen [theaters] in some of the more rural markets, but our average screen size is between 16 and 18. We’re building some as high as 30.”

In many communities, especially those in the heart of the city, the land to accommodate those developments is not available or is too costly to buy up tract by tract.

Theater developers also are drawn by existing retail development. Nothing helps sprout movie screens like the “ca-ching, ca-ching” of cash registers ringing nearby.

“The No. 1 factor is population base,” said Zacheretti, whose chain is planning to add more than 80 screens in Southern California this year, none of them in the Valley.

“You build where the people are. Then, you look at retail [sales] and you build where the people will be coming, in the heavily trafficked retail area. We all feed off of each other.”

Beyond that, Angelenos are a mobile lot, who think nothing of trekking cross-town to see “At First Sight.”

“The people in the central zone [of the Valley] are going to the megaplexes where all the excitement is,” noted Wood, whose Winnetka 20 ranks as the largest theater complex in the Valley and draws patrons from throughout the area. “They’re going east, west, north or south.”

Typical of these traveling theatergoers is Ricardo Campbell, a 10-year resident of Reseda, who said he has to go outside his community for all kinds of entertainment activities, including films.

“I go to Northridge, or Sherman Oaks or Tarzana and every now and then I’ll go to Universal,” said Campbell, who takes in at least three flicks a month.

“The drive doesn’t bother me. If I want to see a movie I just go to where they are.”

With so many theater patrons ready to roll, the hue and cry for neighborhood theaters is considerably reduced.

The downside to that, said the Rev. Zedar Broadus, president of the San Fernando Valley branch of the NAACP, is that when entertainment seekers leave the community, they take their wallets with them.

“While you’re waiting for the movie, you’re buying a sandwich, or a doughnut, or maybe even a dress,” said Broadus. “Quite a bit of money leaves when people leave the community for entertainment.”

Not that proximity to a theater, even a top-grossing one, guarantees a retailer success. Restaurants at Pacific’s Winnetka 20 are routinely empty during the day, and workers at two eateries acknowledged that things can be pretty slow.

Still, cinemas and nearby shops often form a lucrative, symbiotic relationship, the kind San Fernando officials hope will develop in their town.

Broadus remembers when “promises were made” to build a theater in the northeast Valley to replace a drive-in that was torn down to accommodate the Reagan Freeway.

“I don’t know why it was never built,” he said. “But it was never built.”

Broadus thinks that 60% of the reason for the lack of entertainment in that part of the Valley is “stereotypical perceptions.” Communities in the area had some of the lowest per capita incomes--less than $9,000 a year--and highest rates of public assistance--up to 12%--in the Valley, according to 1990 census figures.

But the area is also heavily Latino, 83% in San Fernando alone. Surveys show that Latinos are the fastest-growing group of moviegoers, increasing their admissions by 22% in 1997 over 1996, and accounting for more than 15% of admissions.

And the area is young--median age 26--and youth is a key audience targeted by movie makers.

So there is potential.

And there is a precedent. The same description now applied to portions of the Valley applied as well to the Baldwin Hills area before Magic Johnson opened a theater there that became one of the top-grossing venues in the country.

In opening a 16-screen complex in Panorama City, the Mann Theatres group already has taken a chance on an area that other major chains had ignored. Will gross revenues there match expectations?

If they don’t, that will make it that much harder for the San Fernandos of the world to catch the eye of the next megaplex builder.

“A lot of marketing has to go on to get them [theater chains] to take a second look at our area,” said San Fernando’s Ornelas, “to look beyond the little square box that they make their decisions on.”

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MEGAPLEX BOOM: Increasingly cushy theaters are forcing the older ones to rethink competitive strategies. B6