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The Cinemark Towson and XD theater is part of the Towson Square development. (The Daily Record/Maximilian Franz)

Despite risks, movie theaters attractive propositions

Mobiliario highback rockers, NEC digital projectors and stadium seating are some of the features moviegoers will be able to experience at the new Sun Valley 6 theaters.

The 18,000 square-foot, six-screen multiplex with 752 seats celebrates its opening on Friday, and is a key element in the $4 million-plus remodeling of the Sun Valley Shopping Center in Glen Burnie, which is owned Crown Realty Development.

Despite doubts about the future of the movie exhibition business, developers and owners of mixed-use and retail centers still view movie theaters as assets.

“There are several reasons why I thought [the theater] would be a very good adjunct to the center, and it fits with the fact that the center was 35 to 40 years young — it needed a shot in the arm, so to speak,” said Leonard Attman, general partner at Crown Realty.

Various developments throughout the area have included cinemas in their plans despite looming uncertainty about the future of the movie exhibition business. This summer, the Cinemark Towson and XD theater opened as part of the Towson Square development. Cobb Theatres announced it would open a CinéBistro at the Rotunda in Hampden. When the historic Senator Theatre reopened in 2013 as multiscreen exhibition house, it was viewed as a boon for the Belvedere Square market located directly across York Road.

Although these theaters have vastly different concepts — Sun Valley 6 will show “second run” features at reduced ticket prices while CinéBistro will offer a dinner-and-a-movie concept — they have at least one thing in common: they’re trying to make going to the movies an experience that can’t be replicated at home.

For years, analysts have predicted the fall of the movie-theater business at the hands of various technological culprits ranging from home video rental to Netflix and other online options. Last year’s theatrical statistics report from the Motion Picture Association of America Inc. didn’t provide much comfort.

Admissions in the U.S. and Canada in 2013 were down by 20 million from 2012. That decline of about 1 percent is in line with what the business has experienced in recent years. Those numbers were bolstered by regular moviegoers — about 11 percent of the population — who purchased 50 percent of movie tickets. Box office receipts in the U.S. and Canada totaled $10.9 billion last year, which is up 3 percent from five years ago, but much of that bump in box office can be attributed to an increase in ticket prices.

There were some positive signs, though, such as the fact that 68 percent of the population of the U.S. and Canada attended at least one movie last year. That wide appeal to a broad swath of the public is a large part of why theaters remain attractive propositions.

Thomas H. Maddux, principal at KLNBretail, said because theaters still draw crowds they will remain enticing pieces of a larger puzzle for retail and mixed-use developers.

“They drive traffic, certainly for restaurants, and for any other shopping environment. It’s not seven days a week, all day, necessarily — it probably has peak times on weekends and in the evening — but they draw traffic,” Maddux said.

Chris Bell, senior vice president of development at Hekemian & Co., which is redeveloping the Rotunda, agreed that having a cinema as part of that project was important for two reasons: first, because the Rotunda has included a movie theater for years, but also because it helps create an atmosphere of a gathering spot for the community.

“When you have food an entertainment, they are really key elements to putting together a place where people want to go and hang out,” Bell said.

That’s not to say there aren’t some risks. Often, a developer or owner of a project has to make generous concessions to help keep overhead low so a theater can turn a profit. Building space for a theater presents its own risk because it’s so specialized that if the cinema goes out of business, it can be a nightmare to reconfigure the space for another tenant.

But as long as theaters continue to draw crowds, developers, property managers and owners will be willing to take a chance on the industry.

“If you try to look at the pessimistic side of things,” Attman said, “we’re never going to be able to progress.”

About Adam Bednar

Adam Bednar covers real estate and development for The Daily Record.