Fade to Black
As movie theaters shut their doors, realtors scramble to fill the empty spaces
In an industry that boasts stadium seating and surround sound, it is no surprise that the Waikiki 3 movie theater on Kalakaua Avenue has called it quits. The Waikiki 3 was vintage. It boasted faux trees, a cloud motif and a pipe organ from the 1930s. However, its nostalgic charm did little for competition. Consolidated Amusement closed the theater last November, along with sisters Waikiki 1 and 2 on Seaside Avenue. There simply was not enough business to fill the combined 2,100 seats on most nights. Eight months later, Consolidated closed its 420-seat IMAX facility, the last-standing movie theater in Waikiki. “There are currently no plans to close any more,” assures Amy Wood, director of marketing for Pacific Theatres, parent of Consolidated, which operates 109 screens in Hawaii, including 16 brand-new screens at the Ward megaplex in Honolulu.
The Enchanted Lake theaters in Kailua also shut their doors for good in July. The theater’s operator, Wallace Theatres Corp., already had two theaters in Kailua, the two-screen Kailua Cinemas and the four-screen Keolu Center Cinemas. Kailua was over-screened, says Scott Wallace, chairman of Wallace Theatres Corp. II. The Kaneohe and Kailua neighborhoods also are home to the Aikahi, Koolau and Windward 10 theaters, operated by Consolidated and Signature Theaters. “It’s a death battle,” he says.
Hawaii is home to 213 screens, or one screen per 6,000 residents. That’s more than the theater industry’s rule of thumb, which is one screen for every 10,000 people. Hawaii is not the only state reeling from the nationwide growth in theaters. Last year, there were 35,280 screens in the United States, a 22 percent jump from 1995, according to the National Association for Theater Owners. Meanwhile, the number of theaters fell from 7,744 to 6,050, testament to the industry’s multi-screen movement.
Multiplexes (movie theaters with eight to 15 screens), comprise 24 percent of the U.S. industry, while single-screen theaters and miniplexes (two to seven screens) make up 28 percent and 40 percent, respectively. Only 8 percent of theaters nationwide are megaplexes, with 16 or more screens, according to MPA Worldwide Market Research.
Local executives would not speculate about the closure of future theaters in the Islands, but they do agree on one thing: the next theater to say good-bye will not boast stadium-style seating, multiscreens and surround sound – trends that have swept the industry since the 1990s. “Hawaii is in the middle of a replacement cycle on movie theaters,” says Tim Wood, president of Wallace Theatres Corp. II. “We’ve all gone to wider screens and digital sound.” Oregon-based Wallace came to Hawaii in 1992, and also operates three theaters on the Big Island, three on Maui and one on Molokai.
The Waikiki and Kailua theaters may have shut their doors for good, but new doors have opened for local realtors, who hope to fill the empty spots with tenants. The average sale for movie theaters is between $75 and $100 per square foot. The average sale for retailers, on the other hand, is $300 per square foot. “Theaters are like hotels and they’re based on occupancy,” says Steve Sofos, president and chief executive officer of Sofos Realty Corp. “Whether it’s full or empty, you’re still paying those overhead costs. In other words, it’s not cost-effective.”
Sofos handles the lease for the former Enchanted Lake theater. A movie theater was not the most effective use of that space, he says. “Most of the tenants that go into shopping centers have become service-oriented tenants. That’s why you see a lot of real estate, insurance companies, banks and credit unions going into shopping centers,” he adds. He was close to finalizing a lease agreement on the 10,000-square-foot space at the time of this writing in September.
Colliers Monroe Friedlander Inc. manages the lease for the now-defunct Waikiki 1 and 2 theaters. The building’s 26,000-square-foot interior, boasting 50-foot ceilings, has been demolished. Its exterior remains untouched. The rent fee: $3 per square foot.
Mark Bratton, vice president of Colliers, hopes to sign a lease agreement for the former Waikiki 3 building before the end of this year. “Most of the retailers we’re looking for will have experience with Japanese and can switch their product mix when that market comes back,” he says. The real estate company also is renovating Duke’s Lane, which is the cart-filled alley adjacent to the theater and between Kuhio and Kalakaua avenues. “Waikiki is the busiest pedestrian location in the state,” Bratton says. “There are 30,000 people who walk by this property every day.”
Unfortunately for the theater companies, many chose to walk right past their doors.