Local theaters stress service, tailor to local audiences
Charlie Murray (left) and Cory Jacobson co-own Farmington Hills-based Phoenix Theatres, a $9 million business with 27 screens in Detroit, Farmington Hills and Monroe. In marketing materials, Phoenix emphasizes its local ownership, Jacobson said.
Photo: Rio Scafone
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Phoenix Theatres co-owner Cory Jacobson enjoys his freedom to experiment and his closeness to the community as a Michigan movie theater owner.
“The lack of bureaucracy means you can make quicker decisions. You can react to customers and employees,” said Jacobson, 45, who with partner Charlie Murray, 32, and silent investors, bought his first movie theater, the Bel-Air Centre in Detroit, from movie theater giant Regal Entertainment Group, based in Knoxville, Tenn., seven years ago.
Community members embraced Phoenix particularly because it was the only first-run movie theater in Detroit at the time, Jacobson said.
“It really became a part of the community,” he said, explaining that the theater continues to host events such as Coats for Kids with WJLB 97.9 FM, a coat drive for poor Southeast Michigan children in November; a Boo Bash Halloween party with state Sen. Buzz Thomas every October; and Scoop TV, a program that allows children to exhibit their own locally filmed TV commercials every August.
The Phoenix theaters also occasionally show locally produced, independent films.
In the early 2000s, big national chains were closing smaller facilities like the 10-screen Bel-Air to focus on fewer, larger complexes, Jacobson said.
Many, including United Artists, Carmike Cinemas and Loews Cineplex Entertainment, went through bankruptcy reorganizations at the time. That created an opportunity for smaller operators to get into the market.
Today Phoenix is a $9 million business with 27 screens in Detroit, Farmington Hills and Monroe. All three theater locations used to be part of major national chains.
Locally owned theaters, including Phoenix, make up about one-half of the movie theater market in metro Detroit.
Uptown Entertainment, an Ilitch Holdings Inc. company formed in 2001, has owned the Palladium 12 and the Birmingham 8 Theater since it entered the scene.
The Palladium, which Uptown built in 2001, shares a building with Buca di Beppo, Chen Chow Brasserie and Arhaus Furniture.
The Birmingham 8 was built as a one-screen theater in 1927 and rebuilt and restored as a multiplex showing first-run movies in 1996.
Last summer, Uptown purchased the Ren Cen 4 Theatre, previously named Riverfront 4, in the Renaissance Center in Detroit.
The bigger players, MJR Theatres Inc. in Oak Park, which expects to gross $50 million this year, and Emagine Entertainment Inc. in Troy, a $20 million chain, have been growing since entering the market in the 1980s.
The locally owned theaters represent 214 screens at 16 locations in the Detroit area.
The national chains, with 202 screens at 14 locations, include Regal, AMC Entertainment Inc., based in Kansas City, Mo.; National Amusements Inc., in Dedham, Mass.; and Landmark Theatre Corp., of Los Angeles.
By patronizing locally owned movie theaters, moviegoers can support the Michigan economy, said Lisa Diggs, founder of Buy Michigan Now, a Web site designed to promoting Michigan business.
“A lot of times, people don’t know what they can do,” Diggs said. “This is our version of ‘Yes, we can.’ ”
They may not have billion-dollar businesses behind them, but locally owned movie theaters offer more in many ways, according to owners.
“The moviegoers of Michigan are fortunate the vast majority of screens in Michigan are Michigan-owned,” said Paul Glantz, 51, founder and chairman of Emagine, which has 36 screens at two locations in Novi and Canton Township, and plans to expand next year to Woodhaven.
Hands-on entrepreneurs beat anonymous bureaucracies any day, Glantz said. “The pride of ownership shows.”
“We offer better customer service because I’m a hands-on owner,” agreed Mike Mihalich, 61, of founder and owner of MJR, the largest local chain with 116 screens at seven locations. “Our theaters are cleaner, better maintained and have better customer service.”
Surveys in the lobby give information that helps Phoenix book films suited to the tastes of customers in each of its three locations, said Jacobson. For instance, they met the Farmington demand for “The Secret Life of Bees” by showing the film in several theaters at once.
Phoenix advertises its theaters as “your community theater,” he said.
“We want people to know we’re a Michigan-based business. We live in the community. We talk to customers in the lobby. We’re very close to our customer base.”
At the Palladium 12 in Birmingham, Uptown responds to customer interest with special events like a sold-out “Curious George” breakfast, book and movie party, and a “High School Musical 3” event with teen video games “Dance Dance Revolution” and “Guitar Hero,” or dinner and a movie, said Barb Zanetti, senior director of business operations for Uptown.
By the end of the year, catering services will be available at the Ren Cen 4, which Uptown is renovating while keeping the theater open. Next summer, movies will be shown on the rooftop overlooking the Detroit River.
The locally owned theaters don’t skimp on high-tech equipment.
Emagine became the first theater chain in the nation to convert all its screens to high-definition digital imagery in January 2006. Nationally, just 12 percent of screens use digital projection, according to the National Association of Theatre Owners in Washington, D.C.
MJR also eliminated 35 mm film a year ago.
Uptown is working with Cinema Buying Group, a purchasing program for small and independent theaters, to convert its theaters to digital projection within the next few years. They’re excited for the potential to show alternative content, like sports events, opera and music concerts, said Zanetti.
Phoenix is waiting until kinks are worked out and prices drop to hop on the digital projection bandwagon, but its theaters have digital sound, Jacobson said.
Despite tough economic times, local owners are investing in 3-D technology. At least 10 major 3-D pictures will be released next year, according to the theater association.
“3-D is a wonderful, wonderful innovation,” Jacobson said. “It will create a new, exciting reason to go to the movies.”
By late 2009, Phoenix plans to put 3-D equipment, at a cost of $300,000, in one theater at each of its three locations. MJR will jump from one to three 3-D theaters at each of its seven sites in November. Last spring, Emagine went from one to three 3-D theaters at its Novi and Canton Township venues.
Free from corporate bureaucracies, local theater owners say they feel free to experiment with concessions and services.
Uptown offers Ilitch-owned Little Caesar’s Pizza, Starbucks coffee and Häagen-Dazs ice cream. At the Palladium 12, the high-backed seats have Tempur-Pedic cushions.
Emagine sells alcoholic beverages. And its luxury auditorium, 5th Avenue, at the Novi location, has high-backed, leather rocking chairs, tables between every two chairs, and an usher stationed in the theater on weekends.
Phoenix has self-serve drinks — cutting waiting time by 30 percent — candy racks in front of the concession stand and one line for tickets and concessions.
Construction is under way for Emagine’s $10 million expansion to Woodhaven next year, and negotiations are ongoing for a northern Oakland County location.
However, local theaters do feel the impact of the national financial crisis.
Plans for a $12 million Emagine Bloomfield with 11 screens on the Pontiac-Bloomfield Township border are on hold after funding difficulties caused Developers Diversified Realty in Beachwood, Ohio, to suspend plans to build Bloomfield Park shopping center.
But Glantz is confident the project will resume. Emagine Bloomfield will offer luxury amenities like the 5th Avenue theater in Novi, but with slightly higher ticket prices.
Phoenix also has postponed plans to build a Stony Creek movie house in Shelby Township, originally set to open next spring. It’s designed to complement a new shopping center, but the retail developer has been unable to secure financing, Jacobson said.
“Until the economy gets back on its feet, that project is several years away at this point,” he said.
But while others are looking to expand in Michigan, MJR’s Mihalich believes the state has become unfriendly to business.
His taxes have doubled from $400,000 to $800,000, he said. Mihalich doesn’t have any concrete expansion plans now, but won’t rule out opportunities outside Michigan.
Generally, the movie industry has fared well despite the down economy. Domestic box office receipts continued to grow in 2007, increasing 5.4 percent to $9.63 billion, according to the Motion Picture Association in Washington, D.C. Even in bad times, people continue to go to the movies, the local theater proprietors agreed. It’s still one of the least expensive forms of entertainment away from home.
This year, MJR’s revenue is down about 3 percent from last year, Mihalich said.
Revenue is a little down at Phoenix, too. Revenue dropped 4 percent in Farmington and 8 percent or 9 percent in Detroit, but it is up 4 percent in Monroe, Jacobson said.
At Emagine, revenue is up about 4 percent over last year.