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El Cerrito's failing Movie Theater

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  • petr_loubal
    (See last paragraphs for relevance to School District issues) Closer to home than AIG, El Cerritans should consider our local project we cannot afford to let
    Message 1 of 1 , Mar 22, 2009
      (See last paragraphs for relevance to School District issues)

      Closer to home than AIG, El Cerritans should consider our local "project we cannot afford to let fail," the Speakeasy Movie Theater. The analogy is fair. Per capita subsidy costs are comparable while obvious differences lead to interesting comparisons.

      At over $7 million dollars, the Redevelopment costs add up to $700 per El Cerrito household, about half of what each US household paid for AIG's $180 billion bailout . But AIG's $180 million "executive bonuses" which sparked most of the anger, is just 60 cents per capita. Much less than what the theater owes per capita in El Cerrito. Unpaid, the lease of $10,000/month for some 18 months, i.e. $180,000, a two-year old mechanic's lien with hefty annual interest penalties and two County tax liens, adding up to maybe $ 145,000 more. These debts are likely to revert to the Redevelopment Agency, costing each El Cerrito household many times more than is "our share" of AIG management's payoff.

      These similarities seem to fail when we consider reward amounts. The remuneration of an AIG executive was in millions dollars, many times more than that of anyone involved in promoting the Cerrito Theater. For this, AIG provided the insurance cover which let millions of Americans at least temporarily achieve the dream of owning nice homes, with flat screen TV sets in every room, a new car for each adult family member.

      Compare this with the Theater. The City announced it has completed "the audit," after a year of delays and foot-dragging. What has been found out? Have the owners been trying to save both their theaters while scrambling to feed their family? Did they realize that their expectations are not going to be met, and were they attempting to recoup an initial investment? Back in October 2007 they reported they did not expect early profits, but were optimistic about the future. The numbers they presented indicated losses of some $25,000 per month. But it was unclear where the money went. Was this a plea for help? Was money from the Cerrito being diverted to the parent theater in Oakland? No reaction at the time by either the Redevelopment Agency, which did nothing (at least openly), nor the "Friends of the Theater" whose web-site claims they will function "as a watchdog."

      The rewards? A nice venue for some theater-goers and hopefully an OK living for theater owners and employees. Decent but not excessive monthly paychecks for employees while they puffed up their résumé and progressed towards retirement. Little money but much prestige for Council/Board members. No money but achievement of ideals and goals for theater supporters. Not much wealth, but appropriate for public enterprise. These parallels may demonstrate why Capitalism clobbered Socialism. The former, when it functions, seems to work so much better for most people. The latter produces pathetically less for everyone, but at least skips the upper echelon's lavishness, so infuriating in our current downturn. The AIG ("All Is Gone") lesson we should all now ponder.

      What next? Having just announced the closure of their Parkway Theater in Oakland, the owners are unlikely to come up with any money. Else, why let the penalties accumulate? They probably hope to renegotiate the lease with our City. Their strongest argument is that the Theater has become a Landmark the City cannot afford to loose. A faithful following of movie theater enthusiasts can be expected to come out in force. They were successful in getting the Council/Agency to ante up ever larger amounts of public subsidy. They shot down anyone asking that public funds be matched with money raised towards a non-profit Theater operation. They created an illusion of overwhelming public interest, supposedly guaranteeing economic success. Equally effective was their promoting an essentially sole-source project, very hard to convert into some other economically feasible option.

      Still, our fiscal mess makes the public much more aware. The Cerrito Theater's default started well before the current economic slowdown. Supporters will argue the theater is just going though a bad patch, bound to improve. Obviously untrue. Much larger movie theaters in Berkeley are now adding a comparable food and drink service. The competition is likely to become tougher. El Cerrito's evermore subsidized theater will not sit well with the Oakland neighborhood which lost its venue, nor with close-by Albany theaters which presumably pay market-rate rents. Rather than being a testament to "How public involvement saved a historical landmark and brought culture and night-life to a barren area", the Cerrito Theater is well on its way to become a sad example of what happens under Redevelopment's "false economy." Siphoning off scarce resources. Pitting neighboring communities against each other.

      This time around, the Council/Agency would be well advised to not try and cook up a deal behind closed doors. Determine and publicize all relevant revenue and cost numbers, patronage counts, projections. Give the public a chance to suggest and then consider alternative options. There could well be possibilities, other than either "pulling the plug," or "paying what it takes."

      To many El Cerritans, much more important than the theater, is doing right by public schools. The School District claims it is short by just over $2 million to keep the Portola kids on the bottom half of the pad rather than moving them temporarily to the new High School. The mounting theater costs, beyond the initial $7 million subsidy (if fully accounted for), another $8 million recently committed to speculative land acquisition, must be viewed in this context.

      Redevelopment, like any entity, will do all it can to keep alive. We're bound to hear a lot about needing to restructure AIG. Locally, we should think about the future of Redevelopment, based on its many failures and few achievements to date.
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