Sundance Cinemas, which open to the public on Aug. 31, mark the first entry into the L.A. market for the exhibition arm of the Sundance Institute
One of Los Angeles' longest-running and best-known arthouse theaters is reopening after a nine-month hiatus, with Robert Redford's Sundance Group taking over the old Laemmle Sunset 5 location in West Hollywood.
The Sundance Cinemas, which open to the public on Aug. 31 after four days of previews, mark the first entry into the Los Angeles market for the exhibition arm of the Sundance Group, which now owns multiplexes in five U.S. cities with plans for more.
It is also the latest example in a trend that has led to theaters like the Arclight and the Landmark in Los Angeles: higher prices, more luxurious settings and upscale amenities.
In this case, the Sundance five-plex will have fewer seats than the theater did under Laemmle, with significantly higher prices and a decided emphasis on beer, wine and screenings for audiences over 21.
And it's not the only long-running local multiplex on the verge of reopening as a luxury venue.
IPic – a company known for plush settings, bar and restaurant service and prices that can be double the cost of normal tickets – also is taking over the old Avco theater on Wilshire Boulevard in Westwood, The new Avco (artist's rendering below) is scheduled to open in early 2013.
IPic already operates Pasadena's One Colorado multiplex, another former Laemmle house, where they charge up to $29 per person in admission prices and amenity fees.
The Sundance Cinemas won't hit iPic's ticket prices — they'll be about half that expensive — but they do continue a trend that began in Los Angeles with the 10-year-old Arclight, which has been successful with higher ticket prices and reserved seats for all performances.
"I think that theaters featuring enhanced food and bar service and other options may have an opportunity for revenue growth that are not present in a traditional movie theater environment," said Greg Laemmle, president of the 75-year-old company that ran the Sunset 5 for nearly 20 years before pulling out last year.
"If Sundance is able to do it in that space, it's good for people who like that kind of experience and good for distributors who have access to those screens again."
Paul Richardson, the president and CEO of Sundance Cinemas, said he was anxious to take over the location as soon as he learned that Laemmle might be leaving.
"We'd been looking for sites in Los Angeles since 2006, and this was the first hot opportunity that came along," Richardson told TheWrap this week. "I've lived in Los Angeles since 1982, and it was one of my favorite theaters because of the programming."
Laemmle opened the Sunset 5 in August 1992 in the then-new, three-story complex on the location of the former Schwab's Drugstore at Sunset and Crescent Heights. For nearly 20 years, it was the dominant theater east of Beverly Hills showing independent and foreign films and documentaries.
"It was a terrific location, but a heavily competitive zone," said Laemmle, whose theater outlasted its early competition — Beverly Center and Beverly Connection — but faced tough going when the Arclight opened further east on Sunset.
"We were at a place where occupancy costs and rent were higher than they should have been relative to revenue," he told TheWrap. "You need to get your rent in line or bring your revenues up, and we were unable to come to terms with the landlord over an extension."
With its admission and concession prices on the low end, he said, Laemmle did not have many options for increasing its revenues. After Laemmle decided not to continue in the location, Richardson said he and Sundance were "very dubious but enthusiastic" about the prospect of taking over the Sunset 5.
The company — which Richardson calls "a small but sparkling entity in the Sundance Group" — is intent on growing. In recent years, Sundance Cinemas has opened theaters in four cities San Francisco, Seattle, Houston and Madison, Wis.
A multiplex in Westchester, N.Y., is due to open in 2013, and Sundance's executive VP of marketing, Nancy Gribler, said additional cities are in the works but cannot yet be announced.
Initial discussions with the center, Richardson said, were inconclusive. "Movie theaters are the lowest rent payers," he said. "So the landlord wasn't sure if he wanted to continue to support a space that didn't pay the same rent as every other tenant in the center."
Once Richardson's "best arguments" persuaded the landlord to keep the movie theater in place, he also had to sell the business side of his own company on the idea that Sundance could succeed where Laemmle had pulled the plug.
"I had to really argue hard with our financial partners, because this is a risky venture for us that doesn't meet the normal criteria we look for," admitted Richardson.
"It's an expensive deal, and we have an uphill climb here."
Sundance spent what Gribler said was around $2 million to upgrade and refurbish the complex. The five theaters were converted to stadium seating, with larger, more comfortable seats, and small tabletops every two seats.
The renovations reduced the total capacity of the five theaters from 1,000 to between 600 and 700.
The new theaters will also have a slightly expanded lobby, with an upstairs lounge fashioned from the old theater manager's office.
During a walk-through for press last week, the theater was still a work-in-progress, with areas like the expanded lobby (pictured at left) and the box office still requiring considerable work.
The complex will also be adult-oriented: In addition to typical movie-theater snacks, the "Sundance Bar Bar" will be both a snack bar and a beer-and-wine bar, with alcoholic beverages served and permitted in all theaters beginning around 4 p.m.
To allow the serving of alcohol, the cinemas will become 21-and-over beginning around 4 each day, meaning children and teens will only be allowed at the first two matinee screenings daily.
The bar service is one way that Sundance thinks it can make money from the space. "I believe the new physical plan is a real asset for us, and amenities like beer and wine are going to be attractive to our customers," said Richardson. "Those are good, high-profit items for us."
With a sliding scale of "amenity fees" adding between $1 and $3 to almost 90 percent of Sundance Cinemas showings, adult prices will range between $11 (the first matinee Monday through Thursday only) and $15, depending on the time and day of the showing.
By contrast, the Landmark multiplex in West L.A. charges between $9.50 and $12.50 for its reserved-seat screenings with a similar programming philosophy.
The Arclight charges adult prices that range from $13.75 to $16, with a $1 discount for members buying tickets online.
Prices at the NoHo 7, a North Hollywood multiplex that Laemmle opened late last year (pictured at right), are similar to what they were at the old Sunset 5, starting at $8 and topping out at $11.
Bookings will typically be indie fare, most of it from major distributors. The first week will show "Chicken With Plums," a French film based on the graphic novel by Marjane Satrapi; the award-winning Sony Classics music documentary "Searching for Sugar Man"; Magnolia's Orlando Bloom/Riley Keough drama "The Good Doctor"; and the Frank Langella vehicle "Robot and Frank."
Richardson said that the theater's connection to the Sundance Institute will also give it programming opportunities that may not have been available to Laemmle.
Before the theaters open to the public on Aug. 31, Sundance will have four nights of special events. Monday, Aug. 27 will be the official opening party, with guests invited to see one of five movies that won't be revealed until that night. Tuesday and Wednesday will host benefits for Outfest and Heal the Bay, respectively, while Thursday will be a private afternoon-and-evening event for film distributors.
Next year should bring another gala opening event across town, as the iPic makeover of the Avco will test whether a theater nestled next to the UCLA campus can find customers willing to pay the highest prices in town for plush recliners, free pillows and blankets, and custom cocktails and food served at the push of a button.
The aim, said a statement from the Florida-based company's chief executive, Hamid Hashemi, is to "transform … the moviegoing experience into the ultimate night out."
The iPic renovation, which will turn the four-screen Avco into a six-screen luxury multiplex (artist's rendering at right), is due to be unveiled in early 2013.
Before then, will Sundance Cinemas find steady business with its own, slightly lower-scale version of movie-theater luxury? Robert Redford's outfit is banking on it, and even the company that used to have the space is hoping it happens.
"It's a tricky thing, finding the right tenants to occupy that space," said Greg Laemmle. "My hat is off to the landlord for keeping it as a movie theater, and I'm happy to see that it's an art-film operator. I hope they can make it work."
Sundance's Richardson hopes so, too. "I'm walking into this with my eyes open," he said. "This is a challenge, and we realize the difficulties. Ask me a year from now, and I'll know a lot more."
CORRECTION: The original version of this story said that Sundance Cinemas were a part of the Sundance Institute. They are a branch of the Sundance Group.
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