Art of Survival at the Art House

Jim Dee is squatting in the back of a True Value hardware store, surveying a stack of 79-cents-a-foot rolls of clear vinyl tubing. “I’d like 3 feet of that,” he says to the store manager. “In fact, why don’t you make it 4.”

It’s just hours before the big Friday night movie crowd arrives at the Palm Theater here, and the owner of the town’s only art-house theater is busy fixing a leak in the hose of his popcorn concession’s canola oil machine. The Palm is a true mom-and-pop movie enterprise. Dee’s wife, Patty, served as the contractor when the theater was renovated in 1988. His eldest daughter, 16-year-old Nicole, now works part time at the concession stand. And when the popcorn machine’s on the fritz, it’s Dee who makes a run to the hardware store.

The Palm may be 225 miles away from the glamour capital of Hollywood, where lunchtime chat focuses on opening-weekend grosses, but the art-house theater is on another front line of filmgoing: It’s a place where people flock to see good movies. When the theater is swamped, its 49-year-old owner takes tickets himself, steering patrons to one of the Palm’s three screens; the biggest theater seats 135 people, the smallest 50.

“ ‘Crouching Tiger’ is in Screening Room 1,” Dee tells a giddy young couple who look as if they are out on a first date. “It’s the first door on your right, and it’s very full in there.”

Dee is a little giddy himself these days. “Crouching Tiger, Hidden Dragon,” now in its 13th week, has been the Palm’s biggest hit in years, having broken all sorts of house records. When Dee shows me around his home one afternoon, he says he and his wife are hoping to finally add on to their bedroom, calling it “the room ‘Crouching Tiger’ built.”

“Billy Elliot,” which played at the Palm from November through early March, was also a huge success. The burst of good fortune didn’t come a minute too soon. Last year was horrific for the Palm. In fact, until business began to pick up just before Thanksgiving, the year “was really a write-off,” says Dee. “There were times when we only had 10 people in each theater.”

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In fact, the last few years have been a bruising ordeal for theater owners, big and small. A string of large chains, including United Artists Theatres, Edwards Cinemas, Carmike Cinemas and Loews Cineplex, have all filed for bankruptcy. Silver Cinemas, the parent company of Landmark Theatres, the leading chain devoted to art-house films, filed for bankruptcy last May. Most of the larger chains hit the skids after a late-’90s building binge created a glut of theaters with costly leases.

The Palm, a modest theater located in the old Chinatown section of San Luis Obispo, has a different problem. Throughout most of the 1990s, business was booming in the independent film world, fueled by groundbreaking pictures such as “Reservoir Dogs,” “Clerks,” “The Usual Suspects” and “The Full Monty.” Fifty years ago, stars were born at Schwab’s Pharmacy. In the 1990s, the gold rush was at the Sundance Film Festival, which became a hipster mecca for new filmmakers.

But now the indie boom, like the dot-com bubble, has gone bust. Film purchases at this year’s Sundance festival slowed to a trickle. The few films that were snapped up went for discount prices--and for good reason. Indie films that grossed $4 million or $5 million a few years ago are lucky today to make $750,000 at the box office.

Sundance is at one end of the indie food chain; the Palm is at the other. And so I was eager to spend a day with Dee to see what impact this indie-film recession was having on someone whose livelihood depended on a steady source of commercially viable films. It’s instantly obvious that Dee is in the film business out of love, not for money. His theater’s projection booths are adorned with posters of his favorite foreign films. And he sounds positively ecstatic recounting that Tina, his 13-year-old daughter, not only recently made it through Bergman’s “The Seventh Seal,” but also, as Dee boasts: “She said she really liked it!”

Dee has been in the art-house business for more than two decades. He ran a nearby 160-seat theater in the 1980s before converting an abandoned employment development office into the Palm. He bought the building in 1991 and created a three-screen theater in 1993. Dee is a minor celebrity; when we walk across town to have lunch, people stop to say hello and ask what movies are coming to the theater.

Dee does his part to promote awareness. He appears every Friday on a local radio station, talking about films with his pal Bob Whiteford, a fanatical movie buff who runs Insomniac Video, a video store where films are organized in such categories as Juvenile Delinquents, Vampires and Alternative Lifestyles, the latter featuring such movies as “Victor/Victoria” and “Sunday, Bloody Sunday.” Dee also hosts a Sunday night world-music show on the local National Public Radio affiliate and a Sunday morning Beatles show on a third local station.

But in the competitive world of film exhibition, he’s a small fish in a little pond. San Luis Obispo has a theater glut of its own. As recently as 1990, Dee’s only competition was the Edwards Theatres chain, which had seven screens in town. But in the early 1990s, SoCal Cinemas came and built a theater with seven more screens.

“There I was, suddenly going up against 14 screens,” says Dee. “And to fill up their seventh screen, they started taking movies I would normally play and I was left out in the cold.”

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Dee has one thing going for him--he can guarantee film distributors that he’ll play their movies longer than the theater chains. But the chains say: With one phone call, you can book 50 prints of your film at their theaters across the country. So Dee has lost access to many commercial indie releases. Fox Searchlight gave “The Full Monty” and “Waking Ned Devine” to his competitors; likewise with Miramax’s “Shakespeare in Love” and “Chocolat.” (Local exhibitors have exclusive engagements that prohibit rival theaters from showing the same films.)

Once Dee starts playing a film, the distributor can’t pull it, but he says that up until opening weekend, anything goes. “The Monday before we were going to open ‘Shakespeare in Love,’ Miramax called and said, ‘Sorry, we’ve given it to Edwards,’ basically because they knew they had a hit and Edwards had theaters with more seats.

“I was already showing trailers for ‘The Blair Witch Project’ when it opened big in New York and Los Angeles. Artisan called the next day and said, ‘Sorry, but it’s a bigger picture than we thought.’ In the business I’m in, I realize I’m often going to play second fiddle.”

Being the little guy on the block, Dee relies on strong community ties to stimulate business. He lets Cal Poly’s film classes use the Palm, because the college doesn’t have a 35-millimeter film projector. Dee has also tried to build a loyal clientele by keeping prices down. His competitors charge $7.50; he charges $6, except on Monday, when all seats are $4. Dee’s concession prices are also significantly lower than at rival theaters. Popcorn goes for $1 to $3; soft drinks range from $1.25 to $2.25. (Imagine getting a deal like that in Century City!)

Dee keeps tabs on promising new films by corresponding with other art-house owners as well as reading various trade publications. He’s also a regular at the Toronto Film Festival; he booked “Pollock” after seeing it at last year’s festival. He is convinced that Sundance is no longer a reliable barometer for art-house success; he booked “Girlfight” after the film got raves at the 2000 Sundance festival, but the movie flopped at the Palm.

Although his personal tastes run toward films like “Pi” and “Run Lola Run,” Dee is no cinema snob. When Miramax offered him “Scream,” he grabbed it. “Personally I didn’t like it at all, but it was a phenomenal hit, and I played it for three months because ultimately my job is to put butts in the seats.”

The slump of 2000 spooked Dee, who worried that the DVD boom was killing his business. But the success of “Billy Elliot” and “Crouching Tiger” persuaded him that if he can book the right films, his audience will patronize them. “We aren’t a fancy theater,” he says. “We don’t have rocking-chair seats or stadium-style seating, but on the other hand, when you come to our theater you don’t have to sit through dogs like ‘Godzilla’ or ‘Wild Wild West.’ I’m never going to get rich doing this, but I get to do what I love--show good movies.”

The Palm, like a lot of small businesses, survives on word of mouth. That’s why Dee often hangs around, taking tickets, just to hear what his patrons say when they leave. “When they say they really loved a movie and can’t wait to tell their friends about it, that’s when I say, ‘I’m keeping that movie for another week.’ ”

Right now, business is on an upswing. On a recent Friday night, Dee drove up to the theater just in time to see a line of about 30 people stretched out from the ticket window. “Hey, look at that,” he said excitedly. “We’ve got a crowd!”

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“The Big Picture” runs every Tuesday in Calendar. If you have ideas, comments or criticism, e-mail them to patrick.goldstein@latimes.com.